Vending machines are becoming quite popular in our lives. From metro stations to office areas, having a vending machine for sodas or packets of chips is something every youngster looks for in today’s world.
If you have a business venture in mind, having a vending machine is very promising. Did you know, this industry is currently worth 42 billion US-dollar? Yes, you read it right. This industry is growing steeply since 2012.
This business seems pretty tempting for entrepreneurs isn’t it? You must be wondering, how to start a vending machine business on your own? But, before you do so, let’s focus on “why”.
Why Start A Vending Machine Business?
We already know the worth of this business in modern society.
Let’s now get a broad idea of the reasons behind investing in a vending machine business-
✔️ Low cost for startups:
Anyone who thought of opening a business in this sector must have thought of, how much does it cost to start a vending machine business?
The answer is not much.
True, the initial investment amount is comparatively lower than other business opportunities.
All you need to invest in when you start is just a vending machine. You can start with one and slowly expand depending on your profit earnings.
Apart from the machine, there will be no need of renting any office space, a simple basement or garage corner will do the work.
You don’t even need too many types of equipment. It’s just one machine and supply van.
If you are a family person, this is the ideal business opportunity for you. This is a highly flexible business.
Anyone can do this with little training. All you need to do is understand the basic dynamics of a business.
Get assistance from your family members for stocking, purchasing, maintaining bank accounts, finance management, and similar items.
Like mentioned before, with low investment and flexibility in business comes scalability. You needn’t invest in many machines; you will get the opportunity to expand slowly.
✔️ Every Transaction is based on cash:
How great would it be to have a business where you don’t have to settle an account at the end of a day!
Vending business machine business offers that. No account here is ever receivable. Isn’t it great! Every transaction is cash-based.
You either get the loan from a bank or credit card company or collect cash directly from the vending machine.
The operational process is a simple post-installment period. All you need to do is maintain stock of items, keep track of the machine stock, refill whenever the machine is empty, and finally collect your cash from the vending machine.
Overall, the above reasons make it clear why you should have this as your business option while starting up.
How to Start A Vending Machine Business?
If you are convinced on why you should get into vending machine business, it leads to the next and probably the most important question- how to start a vending machine business?
Well, there are 3 possible ways that you can think of while to start this business:
1. Getting the franchise of a vending machine.
2. Buying ownership of a vending machine business that already exists in the market.
3. Starting a vending machine business on its own.
Now that you know your options, you can choose one that suits you.
If you want to start from scratch, there are 12 major steps involved in the procedure-
1. Choose a product you are willing to sell through your vending machine.
2. Determine the features of the vending machine you require based on functionality, interactiveness, lighting, dispensing combination, software of the machine, etc.
3. Choose a platform to lease or buy the vending machine.
4. Select the location for installing the vending machine.
5. Determine the name of your business.
6. Decide on the type of entity for your business.
7. Get your business registered with proper legal documentation under the correct Governmental body.
8. Obtain your Employer Identification Number.
9. Establish a business or current-type bank account.
10. Obtain all necessary permits and licenses for the business.
11. Sign the business contracts with the property or office managers or owners of the place where you wish to put your vending machine.
12. Take responsibility for your business and ensure all activities comply with the standard of business by tracking them.
A Step-by-Step Guide To Opening Your Own Vending Machine Business
Open vending machine in this mammoth industry, all by yourself, is a quite big responsibility. You might be wondering how to take it forward. Let’s make your life a little easier.
In this article, you will get a complete step-by-step guide to get this done on your own.
Step 1: Homework
Before you invest in any business, doing good homework is very essential. By homework, we mean thorough research of the market.
This will help you with your business planning. Based on the prospect of the business in your area, you can-
➦ Start your business from scratch.
➦ Get ownership of a vending machine that already exists.
➦ Get a vending machine franchisee.
Step 2: Choose the location of the machine and complete all legal formalities
The location of your vending machine will decide the fate of the business. You need to choose the location wisely. The research and planning help here. Try and find a place where the demand for these machines is high.
The product you sell will also help in determining the place. You can’t set up a vending machine that dispenses potato crackers right outside a hospital.
You need to research on the below points to select a good location-
➦ Vandalism and theft in an area.
➦ Rental of the space.
➦ Commission earning from the area.
Regardless of the area you choose, remember to sign all legal contracts with the owner of the property or space.
An ideal contract should specify-
➦ Products sold and type of machine used
➦ Contract validity
➦ Clauses related to termination on circumstances of unprofitability and breach of terms.
➦ Both party rights on the number of vending machines
Step 3: Lease or purchase the required equipment
To start afresh in this business, you need a fully functioning machine. What product you sell determines what type of machine you require. 1 machine typically has a cost of around $3000 $5000. The options you have are-
- ➦ Bulk-snacking machine
- ➦ Mechanically-operated machines
- ➦ Electronically-operated machines
If you want to reduce the investment capital, you can also choose to buy a used vending machine. Many online suppliers might offer you good deals.
If you are getting a new machine, always remember to check the repairing options and the machine warranty.
Step 4: Choose the correct product for profit maximization
When you select a location, you can find out the product demands there. Providing your customers with their requisite products is bound to increase the profit. Common products sold through a vending machine are-
➦ Snack item
➦ Hot and cold beverages
➦ Personal hygiene products
Also choosing a nearby product source is a good way to reduce the amount you spend on transportation. Naturally, your profit increases here.
Step 5: Maintenance and serving customers.
A successful vending machine can be attained by providing good customer care. How can you do so? simple, ensure the machine is always working efficiently.
To get that dine, regular site visit and maintenance is important.
Vending Machine Business Simple and Profitable
By now it is quite apparent that vending machine business is highly profitable. The demand for these machines is ever increasing. If you have done good research on the market, you are sure to be successful.
Stick to the simple steps and make wise decisions regarding machine purchase and product selection. Starting the vending machine business is just like other business opportunities.