Buying a vending machine business

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Buying a vending machine business

So you are thinking of buying a vending machine business. Well, at Snack Savvy Vending we don’t sell vending machines or vending machine businesses but we do enjoy running a Melbourne based vending machine business so we can share some of our experience with you.

Firstly, our experience has shown us that the vending industry is not, as is often declared, a ‘very low effort, very high $ return business’. As with many businesses, it is a challenging environment but success can be earned. Here are some questions for you to answer when you are considering buying a vending machine business.

  1. What is the sales history for the business? Try to ensure you can review the sales for each season, ideally from audited accounts. If the business is new, try to establish as accurately (and with as much evidence) as possible what your likely sales will be. This may be difficult but is very important.
  2. What are the costs associated with running a vending machine business? So once you have a feel for your anticipated sales levels you must consider your costs. Ensure you include costs such as: vending business insurance, the costs of running a vehicle (van or truck), the cost of the goods sold, the cost of finance (if required), the cost of any rental / commission required by a venue and the depreciation expected on the vending machines each year. Ideally you would prepare a full Profit and Loss forecast for the business, even if you are only considering buying a few vending machines. After estimating all the sales and costs, subtract the latter from the former to arrive at a net profit (excluding your wage and any staff you may employ). You can review business start up literature and find business templates from the Business Victoria website. You can calculate your return on your invested dollars and decide if it is acceptable for you.
  3. How much of your time will the business take up? Include time for restocking the vending machines, traveling to the machines, loading and unloading your vehicle, calculating and placing orders and receiving deliveries (or collecting). If you will be finding your own venues for the vending machines, this will also take up your time (and money). Including what you learned from point 2 above, you should be able to determine your anticipated wage (and pay rate) and decide if it is acceptable for you.
  4. Will you enjoy running the business?
  5. Are you passionate about providing a good service and high quality product?
  6. If you are buying an established business, ensure it has been delivering a good service to its customers.  If you are buying a ‘route’ with sited machines and are paying a premium accordingly, ensure that the vending business has existing and transferable agreements with the venues.

In short, run your numbers and be sure you know what you are getting into. Good luck!

Please note the above is provided for information only and is not a substitute for professional advice. No reliance should be made by any user on the material. Also note that Snack Savvy Vending does not provide consulting services to vending businesses so please do not contact us for advice.

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