turning a bonsai hobby into a business

[William N. Valavanis]

I have been very lucky and have operated a successful bonsai business for over 40 years, and it's very, very difficult, but looks very easy from the outside. Every day when I get out of bed I'm "at work" until I climb back into bed in the evening (really very early the next day). Bonsai is my life and passion, and unlike most of the other people with bonsai businesses, if I should fail, I would still do bonsai and if I should win the lottery, I would not change too much of my activities.

Since my wife Diane and I have been married for 23 years we have only taken two "family vacations" with no bonsai activities (but did manage to visit a couple of nurseries and do a demo). We have, however traveled around the country shopping for bonsai as a family and attended countless bonsai conventions.

Many people have asked if my two sons, Nicholas and Chris, who have grown up in the bonsai community and have helped me since birth, if they will take over after me. People find it difficult to understand that I am NOT encouraging them to do bonsai for their profession.

I want my two sons to get a job where they are happy, make lots of money so they can take care of my wife and me when we get old (if we get that far). Both of them know bonsai, have given short demos, helped teach, sell and set up displays and appreciate the art, but it's not for them. I don't think anything should be forced on youngsters. They are both happy now at SUNY Maritime College studying Marine Engineering and Maritime Transportation.

Yes, it's possible to earn a modest living with ONLY bonsai (not combined with gardening or a nursery, not being retired or married to a wealthy spouse or having other income), but it's a lot of work (?) and in my opinion well worth the personal life sacrifices.

Good luck to everyone who wants to try, but don't give up your day job yet.

By the way when I was young (last century), my high school counselor and family friends told me not to do bonsai for a living, because it's such a specialized field and I would not succeed. Well, I did go to college and have two horticulture degrees to fall back on, but also bonsai apprenticed in Japan (Kyuzo Murata and Kakutaro Komuro in Omiya Bonsai Village) and had a 30 year study relationship with Yuji Yoshimura.

Perhaps it's a good thing for the bonsai community I did not take my counselor's recommendation...

Bill

 

[Bill S]

"Perhaps it's a good thing for the bonsai community I did not take my counselor's recommendation...

Bill"

I'll second that motion Bill. Thanks

 

[cbobgo]

Thanks Bill for your input.

But as I said, I am not looking to make a living at bonsai, I don't actually expect to even break even without some creative accounting. It's really only for the tax benefit that I've been looking into this.

- bob

 

[Vance Wood]

I have been very lucky and have operated a successful bonsai business for over 40 years, and it's very, very difficult, but looks very easy from the outside. Every day when I get out of bed I'm "at work" until I climb back into bed in the evening (really very early the next day). Bonsai is my life and passion, and unlike most of the other people with bonsai businesses, if I should fail, I would still do bonsai and if I should win the lottery, I would not change too much of my activities.

Since my wife Diane and I have been married for 23 years we have only taken two "family vacations" with no bonsai activities (but did manage to visit a couple of nurseries and do a demo). We have, however traveled around the country shopping for bonsai as a family and attended countless bonsai conventions.

Many people have asked if my two sons, Nicholas and Chris, who have grown up in the bonsai community and have helped me since birth, if they will take over after me. People find it difficult to understand that I am NOT encouraging them to do bonsai for their profession.

I want my two sons to get a job where they are happy, make lots of money so they can take care of my wife and me when we get old (if we get that far). Both of them know bonsai, have given short demos, helped teach, sell and set up displays and appreciate the art, but it's not for them. I don't think anything should be forced on youngsters. They are both happy now at SUNY Maritime College studying Marine Engineering and Maritime Transportation.

Yes, it's possible to earn a modest living with ONLY bonsai (not combined with gardening or a nursery, not being retired or married to a wealthy spouse or having other income), but it's a lot of work (?) and in my opinion well worth the personal life sacrifices.

Good luck to everyone who wants to try, but don't give up your day job yet.

By the way when I was young (last century), my high school counselor and family friends told me not to do bonsai for a living, because it's such a specialized field and I would not succeed. Well, I did go to college and have two horticulture degrees to fall back on, but also bonsai apprenticed in Japan (Kyuzo Murata and Kakutaro Komuro in Omiya Bonsai Village) and had a 30 year study relationship with Yuji Yoshimura.

Perhaps it's a good thing for the bonsai community I did not take my counselor's recommendation...

Bill

You do make the point without actually saying it: You have to have the passion for it, ear removing passion, the kind of passion that does not listen to the nay-sayers. I have been running a little side business jumping through all the bureaucratic and legal hoops for years so I know how difficult it is to do it on my level. I can only imagine what level of commitment it takes to do it from your point of view. All that being said there is another issue that enters into the equation that few consider: What do you do when your passion evolves into an every-day, bust your butt, can't afford time for anything else, job? It is at this point where the measure of your passion is fired in the furnace of reality. Many do not get beyond this point and are left with a declining inventory and the conundrum of what to do with it.

 

[rockm]

"It's really only for the tax benefit that I've been looking into this."

I'd probably guess that bonsai as a tax dodge is even less successful than bonsai as a business

 

[grouper52]

I am not looking to make a living at bonsai, I don't actually expect to even break even without some creative accounting. It's really only for the tax benefit that I've been looking into this.

- bob

'Nough said.

 

[grizzlywon]

I have heard the "90% of all business fail" quote for a long time and think it is sad. And even more sad is the fact that in CA it has got to be higher than 90% and will only get worse as our political climate continues to become even more hostile towards small business. Its almost like Washington wants all business's to fail or get bailed out and then owe the Gov something or practically be owned by the Gov. (kind of like GM? Anybody else a little suspicious of the timley attack on Toyota?) I wonder why all that is?

Sorry for the political rant. Just another reason to do your hobby and sell what you can to help others get into Bonsai and to help offset your costs.

I am currently unemployed and selling whatever I can to help pay the bills. And unfortunately, it hasn't been much!

 

[cbobgo]

"It's really only for the tax benefit that I've been looking into this."

I'd probably guess that bonsai as a tax dodge is even less successful than bonsai as a business

I'm not so sure about that.

I'm at a phase in my bonsai development where I need to start working with better material, and I am more confident in my ability to keep it alive. So I'm planning on buying a fair number of high quality collected trees and pre-bonsai over the next 5 years or so.

So let's say I plan on spending $10,000 over the next 5 years on trees. Add in about $2000 for quality pots to go with the trees. $1000 for soil, fertilizer, water bill etc. $1000 for a few nice stands and scrolls. $1000 for tools (gotta get an ichiban! ) and other misc stuff for a nice round number comes out to $15000 over a 5 year period.

If instead of spreading that out over 5 years, I buy it all in 2 years, as a business expense, and deduct it on my taxes, it ends up only costing me aprox $9 - 10,000 because of the decrease in my taxes (if I'm understanding things right, and I'm no accountant so maybe I'm not.)

So I've saved $5000 over a 2 year period. I then sell a couple of my older semi-crappy trees at club meetings and so on for the next 3 years, thus showing a profit for 3 out of the 5 years, meeting the criteria for business instead of hobby.

So as long as the costs of starting and running the business are less than that $5000 in tax savings, I've come out ahead. Right?

- bob

 

[Smoke]

I'm not so sure about that.

I'm at a phase in my bonsai development where I need to start working with better material, and I am more confident in my ability to keep it alive. So I'm planning on buying a fair number of high quality collected trees and pre-bonsai over the next 5 years or so.

So let's say I plan on spending $10,000 over the next 5 years on trees. Add in about $2000 for quality pots to go with the trees. $1000 for soil, fertilizer, water bill etc. $1000 for a few nice stands and scrolls. $1000 for tools (gotta get an ichiban! ) and other misc stuff for a nice round number comes out to $15000 over a 5 year period.

If instead of spreading that out over 5 years, I buy it all in 2 years, as a business expense, and deduct it on my taxes, it ends up only costing me aprox $9 - 10,000 because of the decrease in my taxes (if I'm understanding things right, and I'm no accountant so maybe I'm not.)

So I've saved $5000 over a 2 year period. I then sell a couple of my older semi-crappy trees at club meetings and so on for the next 3 years, thus showing a profit for 3 out of the 5 years, meeting the criteria for business instead of hobby.

So as long as the costs of starting and running the business are less than that $5000 in tax savings, I've come out ahead. Right?

- bob

Yikes! Holy Crap!

 

[cbobgo]

Yikes! Holy Crap!

What about that is Yikes inducing? Are you surprised at how much I'm willing to spend? That's only $3000 a year over 5 years.

I'm ready to step it up a notch. I want to have some good trees to work on and enjoy before I'm an old man. A few ponderosas from Oregon bonsai, a few collected Junipers from our Southern California friends, some cedars from Jim Gremel, a few big Shimpaku and elms and maples from Brent. All Pre-bonsai, un-worked on trees (except for getting them into pot culture which they do well and deserve to be compensated for.)

I've seen the trees at REBS and BIB shows. That's the kind of trees I want to have, and that's the level of work I think I will be able to do. So I have to put some money down. They did not start with $10 trees from home depot.

- bob

 

[Vance Wood]

So you are saying that you plan on spending $3,000 a year for five years. If you plan on deducting that expense and you plan to show a profit at some point, you will have to make at least $3,000 dollars a year using that same material you plan on using for your own benefit.

 

[cbobgo]

So you are saying that you plan on spending $3,000 a year for five years. If you plan on deducting that expense and you plan to show a profit at some point, you will have to make at least $3,000 dollars a year using that same material you plan on using for your own benefit.

No, if you read my post before last, you see I plan to stack the expenses at the front end over the first 2 years. Start up expenses to deduct from my taxes, as mentioned. Then little to no purchases for the next 3 years with a few sales, thus "profit" for those years. Over the whole time period I obviously spend more than I earn - but I'm going to spend that money anyway whether or not I have a business. So I might as well try to get whatever benefit out of it that I can.

- bob

 

[Victrinia Ensor]

Bob-o...

It all sounds crazy to me... but hey... what's the worst thing that could happen... you close down the business... but you bought some really awesome trees in the process... just don't put out more money than you can afford to lose. It's a better bet than gambling.

And never... ever... put up your home or something silly as the collateral. If you have 15,000 burning a hole in your pocket... have a good time.

Have you read the Small Business Admin's site? They have a LOT of helpful information about how small businesses work - so its at least a jumping off point. If you are prepared for the paperwork and the game... then there's nothing stopping you. It might not be how you want to spend you time... but if you are cool with it... knock yourself out. Just make sure you are willing and able to take it on yourself... if you have a wife... don't expect her to do it, or you may end up without one.

It's the willingness to do a thing, which makes almost anything possible.

Kindest regards,

Flagrant Dream Chaser aka. V

 

[Victrinia Ensor]

Oh... and one other thing... I have a dear dear friend who owns a small home bonsai business... and he buys trees... enjoys them and sells them... he does it as a way to fund his habit. If you wanted to pm me some contact info... I could ask him to contact you. He's been in bonsai for decades and is a very reliable person since he is a retired tax/business professional. He advises me on all my taxes and potential business things.

His name is Charlie Anderson... he is a member of a bunch of clubs and orgs all along the west coast, including Rebs... and one of those people everyone in the PNW knows and trusts.

V

 

[cbobgo]

thanks vic I sent you a PM

- bob

 

[Smoke]

What about that is Yikes inducing? Are you surprised at how much I'm willing to spend? That's only $3000 a year over 5 years.

I'm ready to step it up a notch. I want to have some good trees to work on and enjoy before I'm an old man. A few ponderosas from Oregon bonsai, a few collected Junipers from our Southern California friends, some cedars from Jim Gremel, a few big Shimpaku and elms and maples from Brent. All Pre-bonsai, un-worked on trees (except for getting them into pot culture which they do well and deserve to be compensated for.)

I've seen the trees at REBS and BIB shows. That's the kind of trees I want to have, and that's the level of work I think I will be able to do. So I have to put some money down. They did not start with $10 trees from home depot.

- bob

No the yikes was for the ignorance of business tax laws.

As far as buying all the trees, I concur 100%. Just don't buy them and try to deduct them as a business expense. You been getting tax advice from Goldman Sachs?

 

[Victrinia Ensor]

You been getting tax advice from Goldman Sachs?

That was funny...

V

 

[rockm]

I find this plan shaky at best and woefully shortsighted.

What you're doing is frontloading LIVING THINGS, not stock options. You're loading yourself up with expensive trees with which you have no experience. No, collectors don't start with $4 trees, but they also mostly don't start with a bunch of $1,000 trees.

Most haven't amassed their collections in three years, but over time, learning the ropes in the process (and probably losing a few trees along the way).

Putting all your chips on red 13 in roulette in Atlantic City isn't all that smart, nor is putting all your money on startup company stock on Wall St.....The best businessmen see the long haul, not the short term gains.

 

[cbobgo]

Rockm I wouldn't say I have no experience. I've been doing bonsai for 10 years. I have spent the last 5 years working with Brent Walston as a part time apprentice. I have over 200 trees currently that are all very healthy. I'm not some newb with my first mallsai.

And I'm not putting ALL my money in a startup company in the hopes of making a ton off money off these trees. I have a full time job with a good salary. This $15000 is my discretionary money that I will be spending on bonsai regardless of whether or not I call it a business or a hobby.

- bob

 

[grouper52]

You been getting tax advice from Goldman Sachs?

Seems like, and taking ethics courses from Charlie Rangel, Chris Dodd and Tim Geithner.

I think my Respect-O-Meter must be unplugged or broke or something - damned thing just isn't registering at all today.