Week 4 Part B

 

BUSINESS BACKGROUND:

The business name is going to be called “wehavebees.com” which is in the business of making and selling queen bees and nuc hives for hobby and commercial beekeepers. Our goal is to provide high-quality bees to those in need for both cold and warm-weather beekeepers.

                For the business, it’s going to be a fictional business at this time and is only going to be created for this class. I don’t own a business currently although I do use social media platforms. I’ve been using Instagram for about 6 years and have 300 followers, YouTube I have multiple channels and have used it for 5 years and have 200 followers. Additionally, I’ve been using Twitch for about 2 years, but my following is pretty low at around 20 followers.

TARGET BUSINESS MARKET:

Target Market Analysis for Live Bee Purchasing:

                Our primary market is queen bee production, Glen County in California is the queen bee capital in North America. Olivarez Honey Bees produces 200,000 queen honey bees every year and they cannot supply all orders requested and sell-out every year. The market demand for queen bees cannot be met and more production is necessary to meet the demand for commercial and hobby American beekeepers. Annually, about 25-35 percent of bee colonies do not make it through the winter and need to be re-established which requires queen bees and nuc colonies. Based on analysis of losses at 30%, 1.2 million bee colonies need to be re-established annually. Many beekeepers, including commercial beekeepers, have operations that focus on pollination and their business model includes purchasing queens over breeding and producing queens themselves as it is not the focus of their business. There is new technology to monitor hives, in limited use, but if it becomes widely used, there is the potential to increase the market demand further for queens. Producers that can deliver within 3 days after receiving an order will rise to the top of the market for beekeepers.

                Risks to the market include bee disease that impacts your ability to produce quality queens, decrease in demand for almond grove pollination in California which provides the main income for commercial pollinators and queen demand, or an automation change in how queens are produced for the industry. Since the market has been consistent for 20+ years, we feel the risk is low if strong queens with good genetics are produced.

Source Information:

                Primary source information includes research on companies providing queen bees to the beekeeping industry, total number of US Colonies, and local news articles related to rearing queen bees. Based on information provided by statista, there are approximately 2.7 million bee colonies in the United States. The general loss of colonies in the United States, according to beeinformed.org, averages 27% for the last 14 years with commercial beekeepers losing 39% of their colonies in 2022. Based on loses alone, the demand for quality queens is outstanding and those who have cost-effective production operations can do well in this industry.

Projections:

                During the first year, we will complete a limited run, make sure our technology is working as expected, customers are happy with the queen product produced, and provide good business reviews. Upon the first year completing, we will look to scale the business, while controlling operational costs, spend marketing dollars, and also look to retain 75% of customers for return orders.

 

Production Year	Production Quantity	Average Price	Gross Sales
Year 1	250	29.00	7,250.00
Year 2	1000	31.00	31,000.00
Year 3	2500	32.00	80,000.00
Year 4	5000	33.00	165,000.00
Year 5	7500	35.00	262,500.00
Year 6	10000	36.00	360,000.00

 

Marketing Analysis and Conclusion:

                Based on marketing and competitor analysis, the primary way to drive sales is having a website that supports online ordering, with delivery dates, that is optimized for Search Engine results. Additionally, we will use Social Media to promote the product, including blog articles to increase our changes of being found, we can use bots to write the blogs quickly. To support the community, we will also produce video’s support on social media so customers can learn about us, how to install queens, and the quality of product we produce. With new technology for managing colonies coming to market, we may want to have a vendor agreement with Beehero to provide queens with an automatic order notification when they discover a queen has died in a colony. With this technology being used, there is a strong opportunity to save the colony as soon as the technology detects a queen has died if one is re-established. We may be able to work with them to receive an order immediately and increase value to the market or have an exclusive deal.

                In conclusion, the market is strong for queen bees and the demand far exceeds the supply. It is a labor intensive business and you need qualified staff to product queen bees with operational costs managed. With a well-managed business, gross profit margins should be 60 percent and by year 4, all capital equipment should be nearly paid-off. As a start-up business, we should be 100% profitable by year 5 with capital costs paid, provided the market demand does not change.