Can you start a vending machine business on a dime? Doubtful. But, I’m glad you asked. The truth is, of the 5 million businesses started in 2022, almost 70% of them required startup funding of some type. So, let’s talk about ways in which you can prepare your business concepts to get funding secured and start up your own vending machine business.
The first step to any successful business is to create a roadmap. This is the plan that will cement your ideas into place and add the other segments of the business that will support it. Although it will take some time to write each portion of the plan, there’s good news ahead: you will be able to present your final document to lenders, investors, banks and other financial institutions for startup or growth phase funding. This is pretty exciting, especially because you’ll receive more than a dime in funding. So, let’s get started.
First, start building the roadmap, aka business plan. Use this plan that will instruct you in the fundamentals of how to get into the vending machine business. Inside the plan you’ll find the following segments:
- Mission statement and objectives for the business
- Assessment of potential customers: demographic profile
- Analysis of your competitors
- Financial plan and forecast
- Operational plan
- Marketing strategies
Let’s take a brief look at each to define and further explain specifics.
1. Mission statement and objectives for the business.
Preparing your mission statement is similar to stating “why” you’ve decided to start a vending machine business. It contains the objectives you have for the business and milestones you may want to reach, such as “building the business to 10 machines within 3 years,” or other types of benchmarks you have in mind.
2. Assessment of potential customers; demographic profile.
It is crucial to know what your potential customers, or target audience, are looking for in terms of food items, toiletries, office supplies or medicines. To work toward understanding the audience as a whole, create a demographic profile of their likes and dislikes, as well as any needs or wants they may have. This is a cursory search, but it will provide general information.
3. Analysis of your competitors.
In the same way, you’ll examine the businesses of other vending machine owners near the areas where you anticipate locating your vending machines. What kinds of products are stocked? Do the machines appear to be fully stocked or partially empty? What is the pricing offered to customers? These questions will set the stage for your business in competition with others, as you’ll want to overcome any threats to your own business.
4. Financial plan and forecast.
You can prepare a complete financial plan and forecast, or ask someone who is adept at bookkeeping or accounting to complete this section on your behalf. This section is critical to the lender or investor who will examine your business, with the income and expense reports, financial assets, and balance statements included; you’ll want to ensure it is properly prepared.
5. Operational plan.
If you are the sole employee of your own business, you’ll prepare a plan that includes how you will oversee and run this business. Doing so will enable others to note the coordination of services and maintenance you’ll offer and the efforts described in restocking inventory and other business processes. This is a day-to-day look at your business and investors and lenders will want to review it.
6. Marketing Strategies.
Although most observers look at vending machines and wonder what marketing plans could possibly fit, there are some ways you can maximize the presence of the vending machines you own. Here are a few ideas to get the wheels turning:
- Choose a relevant location for your vending machines near a high-traffic area. Create signage informing consumers where your machines are and what they contain.
- Use your vending machine website to indicate the locations of the vending machines. Stock some with specialty items, such as trading cards, so collectors can “chase” the merchandise from one machine to another.
- Use continuous improvements to your vending machines as a way of marketing your concern for their well-being. Ensure machines are spotless and well-stocked at all times. Pull food items that have expired from the machines.
- Stay on top of the latest food trends because those who follow such trends will be on the hunt for their favorites. If protein bars are the hot trend, stock them in more than one slot to ensure a steady supply for consumers.
Although starting your vending machine business on a dime may be unrealistic, using your business plan to present your startup to lenders and investors isn’t. Completing the roadmap of your business will pave the way to the launch and growth of your own vending machine business.