Hypothetically if was to borrow money?

[Mitchhorne8]

Let's say I was to buy 50aces with 8000 to 10000 taps and no equipment or building. Say 250,000$ how long would it take to pay back? Maybe there are too many holes in my question, but someone may sell the lot and it's got me thinking.

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[n8hutch]

I would plan on 5 years. If you payed 250k for the land and spent 250k to set it up. If you sold Bulk and could sell your syrup.

[eagle lake sugar]

50 acres with 10,000 taps? That would be 200 per acre which is extremely dense.

[Chicopee Sap Shack]

With 50 acres you will be in the 4-5000 range if you have 80-100 per acre. Remember the standard says 8" min stems


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[Mitchhorne8]

Yeah. It was a very rough estimate. Seemed too good to true

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[Chicopee Sap Shack]

Say you can be at the max per tap yield around .5 gal of syrup per tap that would be 5.5 lbs per tap giving you 27500 lbs total. At $2.20 per lbs you would make $60500 for the year. That's before expenses though. If you could retail all of your syrup that number doubles. So with out expenses you would pay the loan back in a little over four years. So call it closer to 8 years


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[wiam]

I would not count on .5 gpt for loan repayment.

[wdchuck]

I'm with William- Optimism is nice, but producing less than projections wont make your banker very happy. I'd urge you to use conservative estimates when budgeting.

[PerryFamily]

I'm not so sure I'd borrow any money if you were relying on the bulk market for a return.

[Brian Ryther]

4.5 years.

[K.I. Joe]

I am with Perry family on this one. The price of bulk seems to be on the downward trend not upward and all indicators look like this will continue for some time

[Tweegs]

Property taxes, taxes on income, loan interest, insurance, hired help, utilities, upkeep and maintenance, consumables and fuel costs are going to extend that payoff date.
And not many would forego putting a little in their pocket, especially after working that hard.

With our little setup, half of our sales go back into the business to cover expenses (we’re wood fired).
If you kept 10% of your profit, you’re looking at 40% (not counting unforeseen expenditures) of your gross income that could be applied to a loan.

Pick 5 one acre plots on the property. Count the number of tapable trees on each lot. Average that number for a rough idea of total taps. Calculate 0.25 gallons of syrup per tap to account for seasonal variability. Now run your payoff numbers again, keeping in mind that with property loans, the bulk of the interest is paid in the first few years.

[milligkl]

In terms of your sales mix, I think it's important to consider that you're likely not going to be selling a significant number of gallons retail (just think, selling 50 gallons retail would be 800 selling 800 bottles that are 8 ounces. That's about 67 per month, you'll need to be in a lot of retail stores/farmers markets just to achieve that). Selling to other channels in bulk (ie breweries, restaurants) you'll be able to move more in terms of quantity and at a higher price than selling it just straight bulk (although you'll have more expenses involved with distribution, and holding/storage costs)

[BreezyHill]

You need a spread sheet and list all of your fixed expenses like the mortgage payment, taxes, and all the equipment you need to produce bulk and sell a limited amount of retail your first 3 seasons.

RO is a must to optimize time and energies.

Don't forget to include the interest that you will be getting charged.

Production: I would suggest to look at .3 gallons per tap. This will give you extra revenue on a good season and on a poor season you will be ok; unless you get a low snow winter and a dry end of winter. Then you will be in the .22 range.

If you have a dense bush you can always tag trees that need to be removed and tap them double and milk them for all they are worth prior to thinning. The other option is to have a forester look at what needs thinning and work with a logger that understands sugar production and wont harm the production trees. Good Luck on finding that logger they are few and far between.

Look at all your expenses and calculate from the Spread sheet (if) how long to pay of the new endeavor. You must keep your sights set on the goal and invest wisely if you want to make a profit and pay down the loan to save interest.

Remember that you need to calculate paying yourself if you want a banker to look at seriously. The addition of seasonal help is a key to getting a banker to realize your seriousness.

[mainebackswoodssyrup]

You'll need a full blown business plan and 10-20% down yourself if you plan on getting financing through a bank or even a regional loan source. We were looking at $100,000 loan and that is what we were told. A good business plan covers a lot of things, including 3-5 years in the future. It's worth the time and effort even if you are using your own money so you have a guideline for whether or not you hit your goals. When you add it all up, some of the numbers thrown around on here are too good to be true. For our plan, we figured what we needed for a minimum number of taps to break even or a little better then added 500-1000 each year until we maxed out. We found that 3500 taps was the minimum startup needed with the equipment to handle our max of 7000. We had it planned for 5 years out until we hit max production, just another thought on one way to do it. Of course, then things changed and we went another direction working at a different operation that we hope to own some day and are still currently doing that. But it was good practice and we will make a new plan if we do go through with buying an operation or setting up our own. Proper prior planning prevents piss poor performance! There are several resources out there for small businesses that will help with this work and review/critique your plan.

[BreezyHill]

Agreed.
Business plan is the way to go. The issue is that you have so many variables in what the price of bulk will do and what production will be that a BP's sales and production goals will need to be an average of the trend of the past 3 years to make sense of what will happen.

The other factor is if we get the right person into public offices there is a chance that the maple industry will see some price structure change. There is talk of tht in the beef end due to the influx of boxed beef from South American point of origin. There is little to no restrictions on many products that are banned in the US for beef producers and the VFD changes that are coming to affect as of 1-1-2017 will have a potential impact on milk and beef production on many farms in our 15 county feed delivery area. These products are readily used in SA with no change in sight.

I fully support the VFD program in the US but it is for the health of the people that it is being implemented but non US point of origin foods will still run the risk of residue of these products.

Thus there is the potential of increased demand for US products as the public becomes informed of the lengths that US producers go to insure food safety. That is as long as producers are following sanitary protocols and documenting these acts in their facilities. All it takes is one facility on the news with non stainless steel utensils or a poorly cleaned facility to damage the reputation of the industry.

So I would suggest visiting better business site and work on a business plan or if you know the items needed then just do a Spread Sheet(SS) with the data and go from there. You may find that due to the cost of equipment and the potential return at current futures that it may be an exercise in business modeling and not want to invest at this time. In the feed industry the up front amount is 25%. It is not like the auto loans where you just sign your name and drive away.

Good Luck!

Feel free to ask questions about what you will need for a BP. Send PM if I don't respond quick enough. Still recovering from a TBI from an auto accident.

[mainebackswoodssyrup]

Here is the list of table of contents from our business plan:

Executive Summary

Background and History

Business Organization

Business Goals and Objectives

Business Licenses and Permits

Description of Products

Location and Leasing

Operational and Manufacturing Plan

Market Description/Assessment

Competition Assessment

Marketing Strategies/E-Commerce

Growth Program

Financial Projections
Income Statement
Cash Flow Analysis
Balance Sheet
Financial Ratios

Initial Investment Funding

Contingency Plans

Appendices
Addressing Landowner Concerns
Research Article