how to start a small operation and how much money or capital?

[bowtie]

like everyone here i enjoy making maple syrup and have been bitten by the "bug". my question is what is realistic amount of capital to start a legitimate small scale operation. i am not thinking about r/o's or tubing, i think there is a market for syrup produced using buckets and "old fashioned" ways, so long as you market it correctely. before anybody takes offense i am not saying it is better just that there is growng trend for tradioanlly small-scale traditionally produced products be them maple syrup, fruits,vegatables even wood products. i am thinking that in 3-4 years i would like to have between 750-1000 buckets. i know about the basics. not trying to re-invent the wheel but want to try my hand at this. have any of you had experience getting small business loans to "start" up your operation, what type of hurdles did you encounter. i realize there is at least a 4-5 year payback period for any small business, but also feel that maple is a fairly stable environment for a small business, so long as you make a quality product.iwill have 300 ish buckets out this year, so i really do not need a lot right know but want to plan ahead. i know there will some naysayers out there but would really like input from you guys, i have read the posts on the capital needed for "large operations" (hundreds of thousands with land and the sort), but this is not what i am interested i. the way i see it, if i were to spend 25-30 thousand on trying my hand at it am really any further behind than buying a new truck which will be pratically worthless in 7-8 yrs!!

[nymapleguy607]

I think it comes down to how crafty you are at setting up your operation. If you go and get everything from a maple dealer you could easily spend $10-12K on things that could be done for less. I give you credit for wanting to use buckets but unless your doing some type of agritourism, tubing and vacuum are really the way to go. You could still keep buckets for some old fashioned feel but they don't add much to the bottom line. What's in the bottle will bring people back.

[shane hickey]

When i first started i was 25 years old i knew how big i to be
An operation that i wanted and had a plan on paper. I had
A estimate what would everything cost on paper also the
Woods that i were going to lease with the land owners number
And went to greenstone farm credit and barrowed 50000
I showed them what i should make i also showed them
That i had it all sold if i could get the loan and i was approved
In a week. I didnt make much money the first year but i did get
Everything paid off in that year. Since then i try to grow as
Much as possible and upgrade to new and better equipment.
just make sure you have a master plan. Before you talk to the bank.
Also a steady clientele for the syrup.

[spud]

Bowtie,

I have seen right here on Trader used buckets for $3.50 each with spout and cover. I have seen 3x10 rigs for as little as $4000.00 There are 7 inch filter presses for under $1000.00 You might be able to set up a 750 tap operation with buckets for $10,000 if you buy used. You may not need to go to the bank.

Spud

[Spanielslovesappin]

So i am going through the expansion process to go from 100 to 1000 Gal. per year, for me it will happen in stages. You need clear goals and you need to break it up into realistic chunks. Once you have a plan Farm Credit East (Batavia) is your best/only bet for any needed financing. The fact that you are already making syrup pretty much means that borrowing money comes down to your credit/fiscal situation. 5 years ago i to was anti-tubing and Vac... But if your to the point where you are spending a new truck on maple i think you need to recognize the long term costs of short term savings. i.e. sap=$ and the labor/fuel/equipment to handle 1000 buckets coupled with the reduction in sap per tap associated with buckets vs. vac tube kind of ruled out buckets on large scale.

As for the old fashioned vs. High tech Syrup I in my heart of hearts know that syrup made with buckets/no RO/wood evap. is far superior to the high tech version. That said economics dictates i become more efficient to reach my fiscal goals. We hosted a large brunch over the weekend and un-benounced to me my wife set up a blind taste test pitting VT syrup made by a 30K+ tap operation with tubing, high Brix RO, Steamaway/oil fired Evap against NY syrup made by a 1K tap operation with buckets and a wood evap. It was not my syrup and both were good quality grade A medium amber. we were all presented identical Belgan waffles cut in half. The Syrup was presented in identical containers warmed for the same amount of time. My wife instructed us to apply jug A syrup to the left hand side 1/2 waffle and the jug B to the right hand. After all 7 of us had consumed a full 1/4 waffle of each syrup we all had picked a clear winner though no one had yet revealed there choice. Further every one agreed that both syrups were tasty and good!

4 people picked NY 3 Picked VT... I picked the high tech VT syrup! Even though i hate the thought of the technology for me this proved that you can make good syrup more efficantly and has soothed my raw nerve on the subject!

Try your own test out, its fun!

[jmayerl]

It took me 4 years to get to the size you are talking about. This year we will be in the 1000-1400 bucket range. As far as equipment goes, i invest about $1500 of my own money during each of those years and 100% of the profit from sales. I have established a few accounts and steady customers without even doing any farm markets. Set a plan and a budget and stick to it. Buy things as you need them and make what you can. Rome wasnt built in one day and neither will my maple empire, but my plan will be to grow to be a fulltime business in the next 10 years. I never saw a point in borrowing money and paying interest unless you REALLY need it(house,car) thats it. With were we are at for size this year i think there is going to be money for an RO and finally cashing in some profit.

Hope this helps.

[bowtie]

ok so i have done some figuring, and it looks like this, evap $8000-$10,000,tanks $1200, 400 used buckets/taps $2000,transfer pump $500, cordless drills (2) $400, ss bulk containers (4) $750,signs $300??, these were the 1-time costs. now here is what i figured for seasonal costs based on 6 week season ,packaging (ie bottles,caps,labels $500,fuel costs(vehicles) $400 misc,(hydrometers,grading kits), $100,cleaning supplies $150,filters $100, wood cost(if i had to buy)$400-500,electric bill $100.
this is figuring 500 bucket operation making 125 gallons a year at average sale of $36.25 gallon(50% bulk at 27.50 gallon/50% retail at 45 gallon). the only thing i would purchase new is evap.30"x8'/steam hood and pre-heater. i have 1-500 gallon ss holding tank,and 1-210 gallon collection tank, around 400 buckets/taps but feel i would need more storage and collection tanks (cage tanks), better transfer pump,2 cordless drills. the numbers are not as solid as i thought for the first 5yrs.
i have a 2x4 flat pan evap with blower that i can 13-15gph with dry wood, so i will definately need a bigger more efficient one i think 70 ghp is about right.
what am i missing? what could be cut?:confused:

[adk1]

Interestign how everyone formulates their own long range plan but do not plan really for the up front like I did. IT took me 2 years of planning up front before I pulled the trigger. haha. For me, this will reamin a hobby for at least another 10 years. I just opened up an Ice Cream Shop last summer. That will be my retirement plan and maple syrup will suppliment that.

[happy thoughts]

ok so i have done some figuring, and it looks like this, evap $8000-$10,000,tanks $1200, 400 used buckets/taps $2000,transfer pump $500, cordless drills (2) $400, ss bulk containers (4) $750,signs $300??, these were the 1-time costs. now here is what i figured for seasonal costs based on 6 week season ,packaging (ie bottles,caps,labels $500,fuel costs(vehicles) $400 misc,(hydrometers,grading kits), $100,cleaning supplies $150,filters $100, wood cost(if i had to buy)$400-500,electric bill $100.
this is figuring 500 bucket operation making 125 gallons a year at average sale of $36.25 gallon(50% bulk at 27.50 gallon/50% retail at 45 gallon). the only thing i would purchase new is evap.30"x8'/steam hood and pre-heater. i have 1-500 gallon ss holding tank,and 1-210 gallon collection tank, around 400 buckets/taps but feel i would need more storage and collection tanks (cage tanks), better transfer pump,2 cordless drills. the numbers are not as solid as i thought for the first 5yrs.
i have a 2x4 flat pan evap with blower that i can 13-15gph with dry wood, so i will definately need a bigger more efficient one i think 70 ghp is about right.
what am i missing? what could be cut?:confused:

I don't know what NY state requires... or will in the future.... in regard to licensing/inspection but one thing I don't see in your plan is the cost of the facility in which you plan to produce and package your syrup. Do you have a sugarshack and if you do would it pass inspection, or would you need to upgrade it to meet state regs.

In PA the regs were upgraded a few years ago to be more in line with the FDA food safety modernization act that has everyone so confused these days. To the best of my knowledge, the PA regs no longer make allowances for small sugar operations. You used to be able to sell under a certain amount and be exempt. Now, if I produce and sell one jug I'm under the same laws as a giant producer with licensing, inspection, certifications etc. You might want to have an idea where NY state regs will go especially in light of the newest FDA act. The regs in PA made me rethink wanting to sell commercially as a small operation start up.

[spencer11]

I kinda planed out my future plans...in class during school, but I figured you could set up a 3000 tap operation for around 60-70k, not sure how big you may want to go but this is the cost I figured out for me

[GeneralStark]

Since I started transitioning from hobby to business two years ago I have been primarily focusing on the sales side of my business so that in the future I will be able to expand production using the business revenue. I too was contemplating an all bucket system of about 500 taps, but when I started looking at the numbers my perspective changed completely to where I am now slowly installing a state of the art vacuum tubing system. When you compare production potential and factor in variable weather, vacuum and tubing is the way to go for a startup. I will be up to about 400 taps this year and will probably max out at 600-750 in 2-3 years.

In terms of sales, I would suggest being sure that you can sell the syrup you will produce at the price you anticipate. There is a great deal of expansion in the industry and despite last season's lackluster performance, there is alot of syrup out there. Also, consider value added products as you can yield higher $/gallon. This has been my focus since the beginning as many other folks in my area sell syrup, but unique, high quality maple products are in greater demand. Selling wholesale is certainly an option, but to do it effectively you need many, many taps and it will be difficult to do with buckets, especially if you have a season like last and can only make a pint or less/tap.

[bowtie]

thanks for the suggestions and advice. i currently have my evap in a 24'x24' garage that is used for that and some storage, i will be adding a "shack" in the future but honestely will not calculate that into the cost because i was going to build one regardless of whether i try to get bigger or not. i have started checking into regs, but with some of the "operations" i have seen i do not think that will be problem for me. i get the deal on tubing and vac but until i buy another area of land i will stick with buckets and take what nature gives me. i am really only trying to recoup some of my costs and make a little extra to start(5 yrs) and see where it goes from there. if i were trying to make a living at it i know i would have to be large and have produce other maple products, besides that is why i keep my wife around so she can make a living for me!!:lol: as for the upfront costs to me it does not matter if you are going to get it now or in 3-5 years you still "need" it and if getting it at the start makes it easier to accomplish your goals it actaully saves you in the long run.
i would really like to see the numbers on expansion to see if this is a short-term thing or actual growth. as for prices i think my retail price is less than most but you have to develop a customer base to start. from what i have seen bulk prices are what they are take it or leave it and a few of the local large producers are buying as much as they can, if this changes it would really throw a wrench into the works but for now it seems stable. hey 15k-20k is alot of money but like i mentioned alot of people throw more than that away every 4-5 yrs for vehicles, if it turned sour i can still enjoy making sryup and sell it to friends and locally in small quantities, it beats the hell out of doing most other things.
again thanks for the past and future advice.

[Tweegs]

If you’re looking at a 3 to 5 year plan, you could always use a tax advantage to leverage cash for your expansion.

Before I go into this though, let me first state that you really should consult with an accountant prior to setting anything I suggest in motion. In fact, you want to talk to an accountant prior to doing anything.

Here is what I’m talking about regarding the taxes:

Of course, everything purchased essential to running the farm or business is tax deductable. You have two options for the write off on capital equipment: You can amortize (depreciate) the item over several years or you can take a full amount on a 179 deduction, even if it is financed.

Say you need a tractor. If the timing is right and the manufacturer is hungry enough, it’s not hard to find financing for 0 (or little) down at 0% interest.

You can write the tractor off on the taxes taking the full 179 deduction…caveat here…Just because you spent 20 grand on a tractor does not mean you will get 20 grand back on your taxes. 20 grand will come off your income, lowering your tax liability, you may get something like 6 grand back.

Use the 6 grand, plus any sale money, plus any wiggle room in your household budget to purchase your next piece of equipment that you can write off the following year, again taking advantage of the 179 to leverage the cash for future purchases.

In the end, you’ve got enough equipment to get to growing, financed at 0% interest. And a tractor loan, I would think, is far easier to get than a small business loan, not to mention having to pay interest on that loan.

If everything goes south and a tornado rips out every maple you have, you may be out a tractor, but you own everything else free and clear. Start buying sap and keep rolling.

All that said, let me reiterate, DO NOT proceed down this path without the advice of tax professional. It may not be right for your situation and may hurt, rather than help your long term goals.

I’m only putting it out here as an option to talk to a professional about.

[red maples]

you can also look into grants as well this will save you some money. Also if you would like to finance if you go through the usda (although there is red tap of course) you can get loans for as little as 1%. just a thought. although with the farm bill extention don't know how much time money will be around so better get it while you can.

[unc23win]

Well I will say this you make a very good point about the truck/vehicle. As for myself I have a truck Ford Super Duty to be exact my main reason for having it is to haul a horse trailer. I pay about $8,000 a year in payments next year it will be paid for and it currently has 39,000 miles on it. I have already decided I am going make sure all the warranties are good and keep it as I have a beater car for my daily driver. The thought of having $8000 extra a year to grow my maple operation is becoming more of a reality each month as I make the last 13 payments. I also have a LOT of room for growing with quite a few acres of woods with the majority being maple and it just might be that the maple operation buys the next truck. I have seen a few people do it near by.

In your case as to using buckets as Spud said he has seen buckets with taps and covers for $3.50 there was a thing on here last week on how much it cost per tap on tubing and most people were in $4-$6 range. So you would be $1 a tap less. Use that money to get an RO maybe as it will save you fuel costs whether it be wood or oil. A lot of people are finding out that it pays to have a bigger RO and a smaller evaporator.

[The Sweet Spot]

My wife and I bought all of our equipment 5 years ago, from an retired woman who's husband had passed. She told us he would keep 20 gals a year just for himself. Tapped trees till he was 82. We bought a 3x11 evap., a nice bottler, two very nice stainless tanks, tons of tubing, and quite a bit more. It was all well taken care of. I bought a small sawmill, and had 5 cords delivered at a time to build our sugarshack. We might have $7,000.00 in out of pockets, but oddles of man and woman hours. I plan to tap 1000 trees this year. Wish me luck!!! See ya at the MMSA tomarrow
Peace Troy

[maple flats]

Going back to the price "if you bought it all from Leader, or any traditional maple dealer", an evaoporator to keep up with 1000 buckets without an RO would cost you more than $12,000 by itself. You need to buy used. Keep your eye on every source you can come up with. Most of my equipment was used. I only have a filter press and now a new set of pans I bought new. My tanks, canner, finisher, and the 3 evaporators I've used as I grew from one size to the next were used. Buy just after the season up until late summer, you will get much better prices. Estate sales and retired producers or widowed producers will get the best prices. In general, smaller evaporators are in the higher price range and bigger ones go fairly cheap. This is because as big ones are retired, RO use allows a big evaporator to be replaced by a much smaller one. I'll have 1300-1500 taps this year and a 3x8 would not be big enough without the RO and the available time I have to boil.
A 4x12 is usually cheaper than a 3x8. In fact you might pay the same for a 4x12 as you would for a 2x6 in the used market. Watch for problems with youd. Learn what to look for in each category of equipment you are looking at. Look for leaks in pans, cracks in casts. An old arch can look new with new sides. Watch for lead soldered pans. If you do get lead pans, do not clean the solder to shinny. If you collect sap in old lead soldered buckets, same thing, don't clean the solder to a shine and don't let sap set more than 24 hrs in the bucket even with very light flow and a freeze.

[lastwoodsman]

If you’re looking at a 3 to 5 year plan, you could always use a tax advantage to leverage cash for your expansion.

Before I go into this though, let me first state that you really should consult with an accountant prior to setting anything I suggest in motion. In fact, you want to talk to an accountant prior to doing anything.

Here is what I’m talking about regarding the taxes:

Of course, everything purchased essential to running the farm or business is tax deductable. You have two options for the write off on capital equipment: You can amortize (depreciate) the item over several years or you can take a full amount on a 179 deduction, even if it is financed.

Say you need a tractor. If the timing is right and the manufacturer is hungry enough, it’s not hard to find financing for 0 (or little) down at 0% interest.

You can write the tractor off on the taxes taking the full 179 deduction…caveat here…Just because you spent 20 grand on a tractor does not mean you will get 20 grand back on your taxes. 20 grand will come off your income, lowering your tax liability, you may get something like 6 grand back.

Use the 6 grand, plus any sale money, plus any wiggle room in your household budget to purchase your next piece of equipment that you can write off the following year, again taking advantage of the 179 to leverage the cash for future purchases.

In the end, you’ve got enough equipment to get to growing, financed at 0% interest. And a tractor loan, I would think, is far easier to get than a small business loan, not to mention having to pay interest on that loan.

If everything goes south and a tornado rips out every maple you have, you may be out a tractor, but you own everything else free and clear. Start buying sap and keep rolling.

All that said, let me reiterate, DO NOT proceed down this path without the advice of tax professional. It may not be right for your situation and may hurt, rather than help your long term goals.

I’m only putting it out here as an option to talk to a professional about.


A lot of good advice here and tweegs is right on.. Not to repeat what everyone has already said I will give you this view point which makes it easier to get into it or spend the cash. I figure a good walleye boat and trailer can now run you around 20,000 to 30,000 grand completely outfitted. Two new snowmobiles and a trailer 20,000 without to much trouble. With that in mind they are worth squat in a few yrs and as with all my hobbies over a lifetime none made money just ate it.
At least with this you will begin to see income even if small at first and setting up a LLC will allow you to take advantage of tax breaks. Head to legal Zoom.com and read about LLC's. In my mind it is a win win deal. It is the first hobby giving me some return and as I learn I can grow. I would not have bought a new tractor without this enterprise and I see it already on my tax return. Now it makes sense to slowly buy other maple machines as I grow such as a RO, cream machine, etc.
Enjoy the road you are on!!
Woodsman
More than that I love the syrup industry and the folks in it. We seem all to be cut from the same cloth.

[Starting Small]

Bowtie-Any updates as to the progression of your business? Thanks,
-Dave