Many entrepreneurs are interested in starting vending machine businesses. These businesses require a relatively small amount of capital, and many people are able to operate their businesses on a part time basis out of their homes. Vending businesses require relatively little maintenance, and they allow owners to work on nights and weekends.
However, there are many important things to consider before starting a vending business. People who are thinking about opening a vending machine enterprise can follow some basic steps to ensure that they start out on the right foot.
1. Do some research on the industry.
All entrepreneurs should understand an industry well before they decide to open their own business. People who are interested in starting a vending machine enterprise should begin by reading up on industry publications. They should also look into speaking with other people who run successful vending businesses. However, it may be best to try to contact people who operate in other places. Existing vending business owners will often not be open to discussing their business with potential competitors.
2. Prepare a great business plan.
Business plans are essential when entrepreneurs are starting any kind of business. They help keep business operations organized, and they are almost always required when business owners need outside funding. A business plan should include goals that owners want to meet as their business grows over time. In addition, it should include specific information about finances. People who want to start a vending machine business should get solid information about how much money they will need. They should take the cost of vending machine purchase or rental and supplies into consideration. In addition, they should determine how much working capital they will need to keep the business running. Business plans should also include information about marketing and strategies for business expansion. Vending business entrepreneurs can almost always find funding if they are able to present a well developed business plan.
3. Find some great locations for the vending machines.
There are many different places that are perfect for vending machine placement. Vending machine owners should understand that placement is the key to success in their business. Vending machines should be placed in areas that see a lot of traffic. Large companies, schools, offices, some types of restaurants, gyms, stores, laundry mats and movie theaters can all be great locations for vending machines. Shopping malls and strip malls can also be a great source of vending machine revenue. People who want to start a vending business may want to consider giving higher priority to locations that are near their homes. Gas costs can quickly eat into business profits when owners need to drive far distances to get to their machines. In addition, vending machines that are located close to owners’ homes take less time to drive to, and this increases profits relative to the time that owners put in.
4. Determine customer profiles.
Vending business owners need to figure out the type of people who pass by a particular vending location. For example, a vending machine that sells energy drinks might do very well at a university, but the same machine would sell far less if it were placed outside of an elementary school. Vending business owners should match the products that their machines provide to the needs of customers that walk by them. Entrepreneurs should visit a specific location at different times of the day over a period of several weeks. The information they gather about the people they see in the area can help them find the right products to make their business a success.
5. Talk to location owners.
After determining customer demographics, vending entrepreneurs should begin to speak to the people who own the places where they want to place their vending machines. It is often a very good idea to have a visual presentation that can be shown to location owners. This will show that entrepreneurs are serious about their operation. People who want to start a vending business should keep in mind that they will almost always have to pay location owners a fee. This fee reimburses the business owners for using their space. Some large companies do not charge fees when the vending machines supply things that their employees want. However, most other location owners will. Most location owners will want between 15 and 30 percent of profits in exchange for hosting a vending machine. Vending entrepreneurs should have business contracts prepared that they can send to location owners who agree to their terms.
6. Find suppliers.
All vending machine business owners will need to purchase or rent vending machines. People who are first starting in the vending business may find it more cost effective to go for used machines. While these may be cheaper to buy, business owners should be handy enough to be able to fix them. Vending machine manufacturers often provide phone support. In addition, vending entrepreneurs need to find merchandise to fill their machines. There are many different products available that can be dispensed by vending machines. Business owners can always get the best deals when they shop around and talk to multiple suppliers.
7. Place the vending machines.
A vending entrepreneur is ready to begin operations after they have found quality suppliers and signed contracts with location owners. However, vending machines sell goods, and these sales are almost always subject to sales tax. Business owners should contact the relevant local authorities to obtain the tax certificates they need to run their business legally.