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How to Do Vending Machine Business in Malaysia (My Experience)
Table of Contents
This article records my own personal experience in doing vending machine business in Malaysia, as a way to earn extra income. If all goes well, I will enjoy ~200% returns by the end of the fifth year.
But I’m getting ahead of myself. Let’s start from the beginning. This article covers the following sections:
Part 1 – Learning how the vending machine business works
Part 2 – learning how to start vending machine business in malaysia, part 3 – vending machine price in malaysia, part 4 – is vending machine a profitable business, part 5 – my bad experience with the vending machine supplier company.
- Part 6 – Guaranteed Rental Return vending machine package
Part 7 – How much can you earn from vending machine business
In September 2020, I was happily browsing through the Home & Living Fair Expo at Mid Valley when I chanced upon the vending machine supplier’s booth. I have no idea what they were doing there, but I, too, have heard about the high income potential from doing the vending machine business in Malaysia.
So I inquired. A nice sales lady immediately assisted me.
She told me about the company, which specialises in manufacturing and supplying vending machines all over Malaysia, and the various types of vending machines they offer, including:
- Snacks vending machine (available in multiple configurations. The most high-tech one got touch screen and e-wallet payment option)
- Hot food vending machine
- Drinks vending machine
- Mystery box vending machine
- Custom vending machine
- Cashless vending machine
- Coffee vending machine
The vending machine price ranges from around RM8000 to over RM20,000 each, excluding financing (if available).
My sales rep, who claimed she runs 2 vending machines herself, said they have been a profitable venture for her (to be fair, of course she would say that), and it is easy for individuals to start a vending machine business in Malaysia (that too).
If I want to start, all I have to do is:
- Choose (and pay for) a vending machine package
- Pick a location I want (locations are provided)
- Collect the sales profit every month
She showed me a list of 100 or so ‘hot’ locations with ‘ready’ customers, all approved and waiting for vending machines to be installed. Locations vary; some are at public places, some at offices/factories, some at residential areas.
She explained the benefits of starting vending machine business through the company, as they provide many types of assistance, including:
- Finding suitable locations and negotiating rental with the property management
- Delivery of the machine
- Providing a variety of vending machine-friendly items
- Stocking the items
- Refilling the items
- Processing the payments
- Handling repairs
Note: some services are included in the price, some comes with extra charge
As for the vending machine price , the company designed 3 types of business packages:
- Buy package – Buy a smart vending machine for RM20,000 in upfront capital + monthly cost of approx RM200-400 for location rental, possible Internet cost and refilling service (optional)
- Rent-to-own package – Put RM6000 downpayment for a smart vending machine + monthly cost of approx RM600-1000 for location rental, possible Internet cost and refilling service (optional)
- Guaranteed Rental Scheme package – more details on this in Part 6
Her sales pitch was very good and it’s obvious she is an experienced salesperson. The projected returns sound great (“most people break even by the second year, after that what you earn is pure profit”).
The salesperson made it sound like vending machine business is the easiest thing in the world to profit from. But of course I have to do my research.
What I found out: It has potential, yes, but like all businesses, it’s not as ‘easy’ or ‘passive’ as the sales agent suggested.
Based on my research, I would be lucky if I broke even within 1.5-2 years; it really depends on the location. If you happen to pick a bad location, then you may not turn any profit at all! The risk of losing money is always there, because this is a business.
When I asked on social media, some people replied with their own experiences.
- Some made great profit (they got great locations, sourced own machines, etc).
- Some make a loss (horrible location, etc).
- Some bought/sold their vending machines from other buyers/sellers, bypassing companies like these altogether. You can find vending machines listed on Mudah.my .
- Some said they, too, have also heard and tempted by over-optimistic sales projection by agents.
I found out that there is also a type of vending machine scam in Singapore!
Just saw your experience with vending machine biz and I recall a recent saga in SG : https://t.co/FPzE5cCxny — Kevin | Turtle Investor (@turtle_investor) April 1, 2021
Despite that, I still wanted in. I checked and am satisfied with the legitimacy of the vending machine company. But mainly I was curious about the vending machine business. I figured, at the very least, I can write about it (you’re reading this).
Initially, back in September 2020, I picked the Rent-to-Own package and paid RM6,000 to the vending machine supplier company (later, I switched to the Guaranteed Rental Return package – more info in Part 6). However, my personal experience with this package was not great.
First, I was told that all the locations shown to me during the expo were no longer available, they ‘ran out’ despite me paying the downpayment to book them. In short: they have pulled the classic overpromise and underdeliver tactic.
I was told to wait for new locations. Because it was the peak pandemic period and stay-home orders were given and everything, I (stupidly) accommodated and waited.
Finally, around January 2021, (a good 3 months after), a new sales agent contacted me. He introduced himself and told me he would contact me after they found new locations.
Around the same period, I received a letter via email, informing me of the delay of the vending machine (as if I didn’t notice). They blamed Covid-19 and offered a free month of rental as an apology. So I waited some more.
In March 2021, after about 6 months since I signed the contract, my sales agent finally contacted me with a location.
A location. One . That was a far cry from the list of ~100 over locations shown to me during the first sales pitch. I knew that location matters, so I asked as much details about the location as possible. After some prodding, I was given one more (just one more) possible location, which isn’t as good.
Was I annoyed? Yes. I wanted choice, and now it seems like I have to take whatever location is available. I had wanted to visit some locations before making my decision, to see the foot traffic and type of possible customers and safety of the location.
There were other things displeased me. I was told to attend a vending machine maintenance class, so I can learn basic troubleshooting of the machine in case it malfunctions. I was never told this, or if it was, only in passing.
I was also told to create a new company for the purpose of registering for e-wallet functionality. Reader, I signed the paperwork 6 months ago and was told everything was okay. Suddenly I was told to do additional work. How’d you feel?
Part 6 – Guaranteed Rental Return vending machine business package
After complaining to my agent, he informed me of a NEW package that is better suited for me: the Guaranteed Rental Return package. Essentially, this is a vending machine rental scheme – I basically rent vending machine instead of profit from item sales.
How it works is:
- Pay RM22,000 in upfront capital , get the machine within 31 days
- Receive monthly rental payment for 3 years – RM300 per month in Year 1; RM350 per month in Year 2; RM400 per month in Year 3 (Totaling RM12,600)
After the 3 years, I have 3 options:
- (1) Take the vending machine for own business,
- (2) Renew and continue earning rental payment of RM400 per month for 2 more years (RM400 x 24 = RM9,600), or
- (3) Sell the vending machine back to the company for RM22,000 (my upfront capital)
It sounds good. The contract is better than the rent-to-own scheme, too (I read the cancellation penalty for that one – it is ridiculous). And he’s right, this is a better package for me compared to ownership. I wanted minimal work for the next five years.
Why I took the vending machine rental package
Under the vending machine rental model, I don’t have to worry about opening a new company, stocking the vending machine, maintaining the vending machine, and more. I will simply receive income every month, no other action necessary .
So while it will give me less profit potential, but it will also give me more peace of mind. Easy decision to make.
My contract came into effect in April 2021. As of writing time (July 2023), the plan is still going well – I received RM300 per month in Year 1 and RM350 per month in Year 2. Now in Year 3, I am receiving RM400 vending machine rental income per month.
If you’re interested in the same plan, leave your contact details in the comments section (or you can DM me on my social media) and I’ll pass your contact to my agent. You’ll also get RM1,000 discount (RM21,000 instead of RM22,000)
Note: Nothing is risk-free in business. I will be so happy if this business works out, but I will also not depend on it. You’ll be advised to use the same approach as well – don’t use life savings or emergency funds for this.
Note 2: The plan is subject to change at any time. Refer to the agent and your contract
So, if you ask me, how much can you earn from vending machine business, my answer is – it depends. You could earn RM300-400 per month like I do from the Guaranteed Rental Return plan, or you can earn RM0-four figures a month if you do vending machine business in Malaysia yourself.
From this whole experience and what I have learned, here’s what I would do if I were to do vending machine business myself:
How to do vending machine business yourself
To do vending machine business yourself, you need:
- a location, AND
- capital (ie upfront money), AND
- time to refill the machines, AND
- technical capability to fix the machines (or know who to call if/when it breaks)
Here is the oversimplified steps if you want to do vending machine business yourself:
Step 1: buy the vending machines directly from whichever vending machine supplier with the best price (you can even buy vending machines on Shopee ) or better yet, from previous owners (look for vending machine for sale at Mudah.my, etc).
Step 2: draft an agreement (or simply buy the agreement template on Shopee ) between you and the owner of the location, stating their agreement to rent the space for you to place the vending machine
Step 3: Place the vending machine, collect money and restock as necessary (buy drinks and snacks wholesale; buy premix instant powder if you have vending machine selling hot drinks, etc)
However, if you’re unsure how to do this all yourself, then you can go through a company , like I did.
Going through company is probably the safest way to do it, they have the expertise. Be very sceptical of profit projection though – so far I am happy with the vending machine package I picked, but I need to remember that every business carries risk.
That is my experience in doing vending machine Malaysia business so far. If you are interested in it, what else do you want to know? If you have experience, how is your vending machine business doing and what did you wish you knew when you first started?
Let me know in the comments!
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Hi Suraya, I have a similar experience. Me and my friend bought a vending machine together for RM57k. The sales agent was very convincing, saying how she has more than 10 machines, and how her daughter is helping to manage her machines. We were also told how fat the profit margin is.
Before purchasing the machines, we were told that there are a lot of great locations available, such as at popular hospitals. After paying for the machine, it took 3 months to arrive, and we were given bad location options to operate it. After much complaining to the company, we managed to get a decent location outside a shop in a busy street.
Our machine requires a lot of maintenance, for example refilling cocoa, tea, soya powders, creamers and sugar. We also have to regularly refilling the water tank inside the machine. If we are late for refilling and the water runs out, the ice-making machine will malfunction.
After paying for the ingredients (powders, sugar) and rental, we hardly make a profit, let alone thinking of breaking even. There were also instances of vandalism or customers throwing their cups/pouring their drinks into our machine
The worst thing is, the company removed the computer inside the vending machine which helps to regulate the mixture of powders in the correct proportion. As a result, we cannot alter the taste or change to other types of beverages. It was a brilliant way for the company to keep making money from us via “regular maintenance”. Besides, we are also not able to sell the machine as no buyer would like to have a machine without the computer inside.
This is really an experience where I finally realise the wisdom of “do not invest in things that you do not understand”.
Thank you so much WC for your experience sharing, highly appreciated! That machine was RM57k?? I’m so surprised, I thought even the top range one is RM30k.
Unfortunately, I have heard about vandalism being main issue in vending machine business in Malaysia. It’s sad that we’re not as civic minded as Japan 🙁
Hi I actually have a question about the Guaranteed Rental Return. It says after the first three years of earning rental you have three options being
(1) Take the vending machine for own business, (2) Renew and continue earning rental payment of RM400 per month for 2 more years (RM400 x 24 = RM9,600), or (3) Sell the vending machine back to the company for RM22,000 (your upfront capital)
Assuming i take the second option and earn rental for two more years, what happens after the two years. Do i get to then sell it to the company for my capital? Do i get to take the vending machine for my own business? Do i get to renew again and start earning rental for another two years? What happens?
My contacts says: After take second option, can sell back for rm22k or take it for myself. No mention for renewal
Note: I can only refer back to my own contract. Not sure how the new contracts are structured, you’ll have to refer to agent for that
Any machine business is profitable but it really depends on location and exposure of the machines.
I invested a lot in toy claw machines early last year, but sadly wrong timing as the pandemic hit and ended up paying a lot for empty rent due to mco.
Early this year, I cannot tahan and decided to just bail out, let the rent deposit burn and brought home all the machines.
Currently thinking of whether to open new shop (need capital for renovation) or to just sell off my machines.
Either way, good thing these machines and toys have *no* expiry date, still can afford to think masak2 on my next move haha
Thanks Lloyd for your experience sharing! Yes it really depends on foot traffic. In the vending machine communities, I can see people berebit for good locations..
Hope you’ll be able to find use for your machines in the future. I have a soft spot for them, reminds me of Japan
I was thinking about vending machine business and I came across your article which was an eye opener, proving it is not an easy ride. But I will like to know based on your experience:
A) How profitable is the vending machine business?. I am actually asking on return of investment (ROI). B) As you have said, you have a done a market research on what people are keen on buying in a vending machine. Mind sharing some info please? C) Based on your experience, for a rookie . Which one would you suggest, Going through a company or buying an own machine and getting a location by themselves ?. D) Do we need to register a company under SSM, to start this business ?. Sorry I am clueless regarding this.
Thank you for sharing.
Very happy to come across your sharing on Vending machine business. I also keen to know what’s your reply on Kavilan’s questions. Mind if I have a bite of the information. >.<
Many thanks for sharing.
(A) Profitability depends on many factors. I took the guaranteed rental returns scheme, which assured me ~200% return in 5 years. You can get better profits (and expose yourself to more risk) via operating your own machine(s). See Part 7 – Vending machine Malaysia: is this business worth doing?
(B) See Part 1-3
(C) See part 7
(D) Unless you took the same package I did, then yes. generally speaking it’s practical to open a company if you have business, even side or small business. You can do sole prop (the cheapest option), and if when you grow the biz, you can upgrade to llp or sdn bhd
All the best
Hye Suraiya. Your story was mind opener but I still have some doubts on the vending machine business and I hope you can share me your experience on the vending machine business. My questions are, which do you advice for a rookie, getting a vending machine by themselves and sourcing for a location or going through a company?. Second, how long did you take to cover back your initial investment (Return of investment)?. Lastly, could you give us a glimpse in what we should look at before purchasing a vending machine?.
Your help will be much appreciated. Thank you
Im trying to get into the vending machine. Could you give some advise?
What would you like to know Dennis?
Hi Suraya, can you please share the agent contact? 2nd question. as for now, may i know if you are able to find company that help to manage your vending machine instead? it’s more like profit sharing concept.
Sent an email to you, check your mailbox.
As for company to manage your vending machine – I dont know. Can try ask the agent (again, check email), perhaps they offer the service.
Good evening Suraya,
I’m interested to get into the vending machine business and did a lot of research but most of the info are for foreigner(USA, Japan, Taiwan) rarely to see article about Malaysia.
As a fresh graduate I don’t really understand about the law in Malaysia. Hence, I got few question atm, hope you can help me 😀 Do I need to register a company under any government department? Is it really necessary to have a company even I only own a vending machine? Or I can register afterward when the business grown bigger?
Your help will be much appreciated!
Btw hope to see some update about your vending machine business in the future. Wish you have a great day! 🙂
Its great that you are interested in this business. Tbh your questions are outside my area of expertise, so you’ll have to find others to give better advice.
What I do know though, is it’s always practical to open a company if you have business, even side or small business. You can do sole prop (the cheapest option), and if when you grow the biz, you can upgrade to llp or sdn bhd
all the best!
Company tat overpromise n under delivery is already an alarm,might want to reconsider giving them more money n subscribe to another package all together? Any black and white or document to secure your investment?
Yeah this was classic sunk cost fallacy move. I paid RM6k, didn’t want to go through the hassle of ‘wasting’ the time (and additional time for refund, if possible, didn’t ask), so went for the other package.
On the plus side, the legal and contract side is all good
Interesting read, however i’m not sure how you come up with 216% return.. if you make 12.6k+9.6k over 5 years that’s a return of 4.44k per year. So the yield is 4.44k/22k = 20.5% per year and overall 100% over the 5 year plan you suggest. That’s very decent return but nothing like 216%. Where did I get it wrong.. can you explain ?
Great guestion. I edited from a precise 216% to ~200% returns in 5 years. The number is taken from their proposal document, given to interested investors
How has the returns been since September 2021?
Consistent and received as per schedule (as of March 2022)
just want to find out how you get 200% in 5 years?
you paid 22k. your total return after 5 years is 22.2k. your profit after 5 years is rm200. thats a 5 year ROI. isnt it 100% in 5 years?
any income after 5 years is your profit.
hope im mistaken
Hi Jeremy, the cost of the machine itself is refunded and taken into consideration. Hope that helps
Hi Suraya, That’s a very important information which you did not share on amount of RM22k, that is returned after 5 years. Is there no depreciation calculation on the VM/assets?
I am curious to know if anyone has ever couped such amount after the 5 years. This was brought to you after the first option failed with location suggestion (could be also as a marketing gimmick).
If your contract started April 2021, it would technically end in March 2026. How do you secure the repayment of VM in 2026? Curious to know and would love to speak to your agent for more clarification.
I read my contract carefully – no depreciation cost in 5 years
I don’t know how the actually repayment will be made in 5 years. Guess I’ll find out in 2026. Have a feeling they might sweet talk me into renewing. Either way, I have the legal B&W
I am interested, although of course I will do my research. Maybe you could pass me your agent’s number?
Hai Suraya, such a motivating and mind-opener story on vending machine business. Can I have your agent’s contact number as I plan to start my vending machine business in the future? By the way, wish you all the best for your business.
done sent 🙂
Hi, thanks for sharing this! I’d like to ask, is it up to you to chose what to sell in the vending machine? Is there a specific standard or rules in what can/cannot sell vis vending machine? Thanks
If you take your own machine (not the rental package), you can pick yourself what you want to sell, yes 🙂 I’m sure there are guidelines in terms of what cannot sell (for example, firearms) but my agent did mention consultation will be given based, on sales data, so that’s cool
Hi Suraya, I am interested in the vending machine business. Could you please send me the agent’s contact. Thank you.
Hi. May i know how much monthly profit the company offered to you?
Ive found one company that offer 65% profit, while 35% will goes to company.
I’m a big fan of vending machine myself, its always a pleasure buying things from it. I was thinking of doing this, mind to share the name of the company you are with?
Also, what are your thoughts on alcoholic drinks is it legal to do in malaysia?
Check your email 🙂
Re – selling alcoholic drinks in vending machine in Malaysia. You know, I have no idea. Here’s hoping someone who knows can reply and answer
Selling alcohol beverages requires licence. The seller must follow strict guideline on how to sell it. Among the requirement is not to sell to anyone less than 18 years old and only to non Muslim. Hence i think the selling alcohol beverages via vending machine would be most likely prohibited.
That makes sense, thanks Farid
Thanks for your sharing on the vending machine business, glad that i read your article when browsing through internet for information. Can you share me your agent contact? I would like to know more in detail.
Wish everyone is safe during this pandemic, have a nice day.
Done, check your email 🙂
Dear Suraya, curious, what happens after year 5? do you still get to sell the machine back to them for rm22k?
Yes, that’s the idea. You can sell it back OR continue getting the rental income
Interesting read. I wonder what’s the logic behind the company buying back the machine from you after 5 years? When you rent the machine, they will offer the same machine to someone who wants to sell things with vending machine but without any commitment to the VM? That’s how the company make money- VM rental from you, food from another client, 5 years later they buy it back and the cycle repeats? Sorry I’m just trying to get into how the VM company is benefitting from this. Meaning to say, the VM you rented could be a second hand VM, right?
Apologize for many question. I am also interested in the agent’s contact number. Thank you so much :)))
I have a feeling they might try to convince me to continue another 5 years, before offering to another customer. Lower cost of customer acquisition and all. Of course, in order to do this, they have to make sure I have a good experience overall and so far, the payments have been coming in as promised.
Re: how they make money – for each location, the sales can be over RM1-3k, maybe even more, but of course comes with a lot of work, research and luck.
Re: agent – check your email 🙂
Thanks for sharing experience. I get a new knowledge while research about vending machine business. Mind to share your agent contact number? I want to know in details. 🙂
Wow this is a very good read! As a salaryman, I’m keen to investment opportunities that requires minimal effort
Could you please share the contact detail of the company/agent as I’m interested as what you have ventured into?
Best regards Zafran
Hi, Ms. Suraya.
I learnt a lot from your sharing and grateful for that. Can you please share your agent information to me? Thank you so much. Wishing you all the best 😀
Thank you for your experience and this is what I am looking for before investing in it.
Like you say, no such business is risk free and profit-guaranteed, or else many people would have been rich and less poorer.
The reason I look into vending machine business is because it does not need manpower (which I hate dealing with people especially comes to work ). Less human error and basic cash in and cash out concept. However, location selection is the utmost important. I read some one actually put the machine at Masjid and complaining it was not earning any profit. Like it’s such a no brainer location.
If I were to start this business, I would survey the desired locations prior to engaging with the contractors. Do not rely on those salesperson who keep telling you about the hot spots. Mostly are all occupied and highly competitive since those hot spots are scarvaged by most vending machine companies.
Tbh, their payment plan is very confusing based on what you wrote here. I would rather own the machine independently than contractually bonded to them, so that I can bring the machine to whichever spot I deem fit for the machine to run.
I am thinking to own a simple beverages vending machine. Somehow I gotta survey along and get to know the mechanism of a vending machine. I want to buy from supplier instead with company.
I would say vending machine business is a steady source of income but don’t expect high ROI. You can rely on it as a main source of income if you have 2 or more machines in the running.
Thanks Izach for your commentary, looks like you have put a lot of thought into it 🙂 All the best in your ventures!
Hi, I plan to put a vending machine in my homestay. I want to make something different. My target is the customer who checked in at my homestay as normally they were families with kids and teenagers. What do you think. And from your experience which type of vending machine suitable for my plan?
Just take this as an opinion ya – for vending machines, foot traffic aka exposure to lots of people, preferably hundreds or thousands on a daily basis is best to make the investment in machine worth it. If you can get the machine for cheap, and if the location is far from other amenities, perhaps
Thanks for sharing this insightful article. A long time ago, I invested in a water vending machine business. It was a case of overpromising and underdelivering. I should have done more research before I dived in and burned RM18K but…we learn don’t we?
I’m interested in snacks, ice vending machines in the future.
Thanks again for sharing your experience!
Thanks Vernon for sharing your experience. Overpromising and underdelivering is common, not just in vending machines, but also in all sales sector. Like you said, all we can do is learn from it.
All the best in yoiur future ventures!
I read with interest the emails here. I am in the vending machine biz, self-installed and OEM Corporate sales (in the pipeline) and maintaining them. No, I am not selling my services here but to share with you what does the biz involved. The good parts of the biz, is that its 24/7 and cost less on rental of space, and is movable if not selling well. The other factors are; 1) Vending machines are aplenty as its the new concept of convenience but you need a good location aka buying traffic and not any busy area. You need to know the proximity of your peers (other similar biz including small outlets. 2) yr products must be unique; don’t sell what others are already offering. Drinks/Snacks/Toys? Who is yr consumer? 3) Cashless or Cash? The former is popular nowadays but you need to register with the provider for the service, and that comes with some costs. The latter attracts vandalism and it’s expensive to repair or replace the parts. 4) Machine Maintenance; this is a mechanical/electrical construct. It need proper maintenance. That comes from the vendor. What is your assurance and at what cost? 5) Guaranteed Return? No comments.
Thanks for sharing your experience here Jimmy. Lots of business strategy questions there
Hi Suraya, I know this article is like 1 year old, but it is still a fantastic read! Also, do you mind sharing your agent’s contact detail with me as I would like to learn more about the whole vending machine business. Many thanks in advance and All the best in your future endeavors!
Done sent email 🙂
Seems interesting… How long you have been in this?
Hi Suraya, Great read, thank you for sharing! This Guaranteed Rental Return seems interesting (although the main risk probably is risk of default by the company). Would be very keen to read the documentation/contracts and find the structure of how the funds are kept, I would think holding the capital in a trust would mitigate a lot of the risk. Could you pls share your agent’s contact details, pls?
Emailed you 🙂
hi suraya, how are you doing 🙂 i found your great sharing whilst doing some research regarding this business. could please share your agent’s contact details please. thank you in advanve!
Hi Suraya, I’m interested in exploring more into this VM business. Possible to share your supplier contact number with me?
Sent email 🙂
Hi Suraya, Thank you for sharing, very good insight!
In my humble opinion, it’s like you lend them Rm22k then they pay you back Rm300 per month. They’ll get all the profit from net profit above Rm300. Sounds like you just helped them to reduce their risk.
Please send me the agent’s contact as well I would like to know more about their business plan. =)
Exactly. And they help me to reduce my risk (and work related to vending machine business) as well
Sent you email 🙂
A word of thought.
If the rental income is RM300, and it takes approximately around 6 years to get full ROI
What if the vending company closes down in the mid way.. say 3rd year?
that’s a risk that you take. this is a business after all
Er.. extending from 3 years to 5 years, the CAGR or compounded returns pa is about 0.34%pa VS taking the buyback of RM22,000 on the end of 3rd year or beginning of 4th year, the CAGR or compounded returns pa is about 20%pa BUT how sure are we the company will be around to honor the contract and/or honor the contract “properly” is another Q. Just thinking ya, unsure. BOTH are assuming maintenance & whatnot covered. https://docs.google.com/spreadsheets/d/15rFfxb9pqrPOvRwOIf_wR6Gy1RongNXE6sgYnhS6QZ8/edit?usp=sharing
Have U reached the 5th year or sold back yet?
Thanks for the commentary 🙂 I have not reached 5th year or sold back yet
Assalamualaikum Suraya Really appreciate your experience. I m interested in this business too… Just one question, if we want to install the vending machine somewhere, we just have to ask the owner of the building / place for example, right? Is there any specific law for this business? TQ a lot…
As I understand it, you just need permission from the owner of the property. Others with experience can chip in
Hi Suraya, it is a nice writing and thanks for sharing this. I’m interested to do something for a side income but I m totally no idea of the paper work, I got the idea of buy the machine on my own and setup location on my own, but maybe you could share some input or advice ?
Refer to section #7 – is vending machine business is worth doing (both DIY or through company)
Finding good locations to put the vending machine is always the hard part
Please DM details. Thank you.
Hi Suraya, May I know are your three year period ended? So what your decision on that? continue or sell it?
Currently I’m in year 2, almost going on 3. Haven’t ended. So far so good, payments coming in as per schedule. If this continues I’ll probably continue
Hi, how’s the promised return ?So far so good?
As of June 2023, so far so good yes
For part 6, After 5 years, it means you basically taking back what you have given but in the 6th, 7th or years, are you still able to collect the 400 per month?
The contract did not specify what happens beyond 5 years so Idk. Perhaps they might offer that option when the time comes
Hi Suraya, Really appreciate and thanks a lot for your sharing. It’s very useful as it’s hard to find such info at the internet. May I ask which area are they covering? May I please have the agent contact too? Very much appreciated 🙂
Hi Suraya. For renewal after 3 years for the another 2 years (400/month), do you have to pay anything for the renewal?
Hi Sharul, in my contract, no charges for renewal. Refer to the agent in case got updated T&C
Hi Suraya, came across this article from your tweet. Would like to know more abt the package that you took, care to share your contact’s info? Aside to that, the location of the rented machines will be decided by the company as well?
Contacted you for agent info, he will explain the latest package
Yes, the location of rented machines are decided by company as well
Do you have any idea what accounting software being used for the vending machine business?
I don’t know, its not run by me. Prefer that way tbh
Hi Suraya. I’m deeply interested with this kind of business. I’m a degree student and planning on investing for Vending Machines. Mind if I ask, does the company that you are currently in contract with offers rental vending machine, instead of paying a sum of RM21k? And also, mind sharing the agent’s contact number or website? Thanks in advance.
Contacted you for agent info, he will explain the latest package as well as all available offering
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Vending Machine Business in Malaysia: What you should know!
Vending Machine Business Malaysia
Types of vending machines, costs of a vending machine business in malaysia, potential profits of a vending machine business in malaysia, how to estimate the profits of a vending machine business, be cautious of vending machine business scams.
Are you intrigued by the idea of owning a vending machine business in Malaysia ? With its convenience and potential for passive income, this industry has captured the interest of many entrepreneurs.
In this article, I will share with you different types of vending machines, crucial considerations before making a purchase, estimated costs, potential profits, and more. Whether you’re a seasoned business owner or a newcomer, this article will provide valuable insights into starting a vending machine business in Malaysia.
The vending machine industry has evolved to cater to diverse consumer demands. In Malaysia, you’ll find an array of vending machines tailored to specific products. Here are some popular types:
- Snack and Beverage Vending Machines : These machines offer an assortment of snacks, candies, and beverages, making them suitable for offices, schools, and public spaces.
- Combo Vending Machines : Combining snacks, drinks, and sometimes even fresh food items, combo vending machines provide greater variety in a single unit . They are commonly found in high-traffic areas such as shopping malls and transit stations. This type of machine might be more expensive as the machinery is more complex . For example you will need a cooling system if you want to offer fresh food!
- Coffee Vending Machines : Designed for coffee enthusiasts, these machines serve freshly brewed coffee, making them ideal for offices, hotels, and public areas with a demand for quality coffee on-the-go.
- Ice Cream Vending Machines : Found in recreational spaces, parks, and shopping malls, ice cream vending machines offer a wide selection of frozen treats to satisfy customers’ sweet cravings.
- Personal Protective Equipment (PPE) Vending Machines : With the recent emphasis on health and safety, PPE vending machines have gained popularity. They dispense items such as masks, gloves, and sanitizers, providing convenience in public spaces.
Before starting your vending machine business, it’s essential to estimate the costs involved. Here’s a breakdown of the key expenses to consider:
- Initial Investment: The cost of vending machines can vary depending on their type, size, and features. On average, expect to invest between RM 5,000 to RM 20,000 per machine . Consider your budget and the potential return on investment when deciding how many machines to purchase initially.
- Inventory Expenses : Stocking your vending machines requires an investment in inventory. Take into account the variety and quantity of products you plan to offer. Consider partnering with wholesalers or distributors to obtain competitive pricing and favorable terms.
- Machine Maintenance : Regular maintenance is crucial to keep your vending machines in optimal working condition. Set aside a budget for routine servicing, repairs, and parts replacement. If you’re not comfortable performing maintenance yourself, consider outsourcing to a professional vending machine maintenance company.
- Location Costs: Depending on the location, you may need to pay fees or commissions to place your vending machines in certain establishments or properties. Evaluate the potential foot traffic and revenue generation of each location to determine if the associated costs are justified. Commissions can vary between 5% to 20% of your sales or between RM 200 to RM 1000 in case it is a rental agreement.
Profitability can vary based on factors such as machine placement, product selection, and market conditions. Do not trust the sales representative . Let me provide some sample numbers for illustrative purposes and how to make better estimation:
- Sales Volume: The number of sales your vending machines generate directly impacts your profitability. For instance, if your machines average 50 sales per day with an average transaction value of RM 5, you could potentially generate daily revenue of RM 250 per machine. It is very difficult to estimate the volume of a vending machine as it can be completely different from one city/item to another but I will give you the best way to estimate your sales volume below.
- Product Pricing : Determining competitive and attractive pricing is key to encouraging customer purchases. Suppose you have a snack vending machine with items priced at an average of RM 3 per item. With an average of 20 daily transactions, your daily revenue from this machine alone could reach RM 60.
- Operational Costs : Deducting operational expenses from your revenue helps calculate net profits. Consider expenses such as restocking, maintenance, and location fees. For example, if your monthly operational expenses amount to RM 500 per machine, your average daily costs would be approximately RM 16.60.
- Scalability : As you expand your vending machine business and increase the number of machines, profitability can multiply. For instance, with ten vending machines generating an average daily profit of RM 200 each, your total daily profit could reach RM 2,000. You then need to deduct the operational costs to get an idea of the net profit.
The best strategy to estimate your vending machine profit is to go out into the field! Find another vending machine in this area (maybe a few streets away), estimate the traffic (number of pedestrians passing in front of the machine) and number of sales over an hour. Dividing the number sales by the traffic, you will get a ratio of sales per person .
Now you can go to the location where you want to put your vending maching, estimate the traffic over one hour and multiply this traffic by number of sales per pedestrian you got in the nearby street. If you multiply it by the item price you plan to sale, you will get a very good estimation of the potential profits of your vending machine.
Let’s take an example:
Assuming that in a neighbouring street, you find that 500 people pass by a vending a machine and you observe 10 sales over an hour, it means that the ratio is 0.02 (10/500).
If you go back to your potential location and you find that 650 people are walking in the street and that you plan to sale snacs at RM 4. Then it means that you will have a potential earning of RM 52 (0.02*650*4) per hour.
To get the most accurate market estimation, you should reproduce this experiment at different time and location.
It’s important to exercise caution and be aware that scams can exist within the vending machine business industry. In 2021, multiple police reports have been filed against a Singaporean entrepreneur for scamming people in this industry. Stay vigilant and keep the following points in mind:
- Research thoroughly : Conduct proper research, read reviews, and verify the legitimacy of any vending machine business opportunity before making any commitments.
- Watch out for red flags: Be cautious of unrealistic promises, high-pressure sales tactics, exorbitant upfront fees, and lack of transparent communication.
- Seek professional advice: Consult with industry professionals or legal experts to gain insights and guidance when evaluating a vending machine business opportunity.
By staying informed, conducting due diligence, and trusting your instincts, you can mitigate the risk of falling victim to a vending machine business scam.
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8 Best Vending Machine Suppliers in Malaysia
5 min reading
Summary : Finding the right supplier is a first good step towards a successful vending machine business. Here, we prepared a list of suppliers for you so that you can save the hassle of researching yourself.
Starting a vending machine business sounds like a perfect side hustle. It’s because you don’t need much time and effort to start and maintain it. While it seems easy, research on your own before venturing into it is advisable.
If you’re in the stage of sourcing a supplier in Malaysia, below is a list for your reference. Alternatively, you can also enquire about suppliers from other countries which are not on the list. As such, you can have a better comparison before making a decision.
Best Vending Machine Suppliers in Malaysia
5. juz vending, 6. ar vending, 7. ts vending, 8. smart vending.
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Nuvend is a vending machine supplier specialised in food & beverage. As such, they offer complete vending solutions for hot, chilled and frozen food. They also claimed that they created the world’s first vending machine with blend-in-cup and self-cleaning technology. As an investor, you can choose to rent or buy the machines.
Types of machine: Fitgo Smoothies vending machine, EZ Mealbox vending machine, VendChef hotbox machine, VIPBOX sampling machine Website: Nuvend HQ address: No.25, Jalan TPP 5/6, Taman Perindustrian Puchong 5, 47100 Puchong, Selangor, Malaysia. Contact number: +6016-6672997 (call or Whatsapp) Email: [email protected] Operating hours: 9am – 6pm (Monday – Friday), Closed on Saturday & Sunday.
Vechnology is a local OEM producer for vending machines , which was founded in 2015. They are also the first e-wallet vending machine manufacturer in Malaysia. As a modern vending machine supplier, the concept of internet of things and software as a service are the integral part of their machines.
Types of machine: Cashless vending machine, customised vending machine, combo vending machine, industrial vending machine and test kit vending machine. Website : Vechnology HQ address: 100.3.049 (Level 3, Lot 049), Block J, Jaya One, 72A, Jalan Profesor Diraja Ungku Aziz, 46200 Petaling Jaya, Selangor. Contact number: 03-76817211 Email: – Operating hours: 10am – 6pm (Monday – Friday), Closed on Saturday & Sunday
Atlas has been in the vending machines business since 1980. They have offices based in different states in Malaysia except Perlis, Kedah and Negeri Sembilan. They also have been granted the Enterprise 50 award for three consecutive years (2008 – 2010). Instead of just offering vending machines, they also provide refill products needed for your machines, from ready meals to snacks and beverages.
Types of machine: Beans to cup vending machine, cans & bottle vending machine, combination shop vending machine, cup noodles vending machine, hot & cold beverages vending machine and table top vending machine. Website : Atlas HQ address: Unit L01, East Wing, Level 1, Quattro West, No. 4 Lorong Persiaran Barat, 46200 Petaling Jaya, Selangor Darul Ehsan Contact number: 03-74555330 Email: [email protected] Operating hours: 8:15am – 5:15pm (Monday – Friday), Closed on Saturday & Sunday.
Vendsmith was started in 2019 to provide customers with customised or specialised vending machines for hot and chilled food. Although started not long ago, they have decades of experience in tinsmith metal work before venturing into vending machines. Therefore, they can easily modify or produce the most suitable tray according to the customer’s requirements.
Types of machine: Snack & drink vending machine and Vendsmith coffee machine Website: Vendsmith HQ address: 33, Lorong IKS Juru 7, Taman Perindustrian Ringan Juru, 14100 Simpang Ampat, Seberang Perai, Penang, Malaysia. Contact number: +604-507 6261, +6016-4083838 (Whatsapp) Email: [email protected] Operating hours: 8am – 5pm (Monday – Friday), 8am – 12:30pm (Saturday) Closed on Sunday.
Juz Vending is a one-stop vending machine supplier to sell, lease, operate and maintain automated vending machines. Their vending machines also support e-wallet payment. Apart from that, they also have a team of technicians to support you on maintenance or machine breakdown.
Types of machine: Cold drink vending machine, hot beverage vending machine, snack vending machine, combo vending machine and other non-food items vending machine Website : Juz Vending HQ address: Unit 12-10, Level 12, Q Sentral, 2A, Jalan Stesen Sentral 2, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia. Contact number: +603-2389 4905 Email: – Operating hours: 9am – 5:30pm (Monday – Friday), Closed on Saturday & Sunday.
AR Vending was founded in 1996 to supply vending machines in Malaysia. They supply a wide range of Nestle, F&N, Cola and other OEM products through their machines. Moreover, they also offer e-wallet payment solutions for their vending machines.
Types of machine: Beverage vending machine, snack vending machine, instant noodle vending machine and coffee vending machine. Website : AR Vending HQ address: No 31, Jalan Metro 1/1, Bandar Metro Puchong, 47160 Puchong, Selangor. Contact number: +60358829412 Email: [email protected], [email protected], [email protected] Operating hours: 9am – 6pm (Monday – Friday), 9am – 3pm (Saturday) Closed on Sunday.
TS Vending was established in 2006, specialising in fully managed vending and after sales service. Their latest brand vending machine was sourced from Japan. They claimed it has better energy efficiency, using 40% less energy than older machines. In addition, they provide machine related services like checking compressors, fixing coin acceptor problems, and etc.
Types of machine: Tetra pack vending machine, snack vending machine with 8 columns, snack vending machine with cabinet, can & bottle vending machine with label digital price, hot & cold vending machine, small hot & cold coffee vending machine. Website : TS Vending HQ address: 12 Jalan Kota Raja J27/J, Hicom Town Centre, 40400 Shah Alam Contact number: +6016 213 2669 (Call/ Whatsapp), +603 5103 1504 Email: [email protected] Operating hours: 9am – 5:30pm (Monday – Saturday), Closed on Sunday.
Smart Vending claimed to be the biggest vending machine supplier in Malaysia, Singapore & Brunei. They have offices at Johor, Selangor and Sarawak to serve their customers in those countries. Furthermore, they offer several smart ownership packages that cater for different customer needs.
Types of machine: Combo snack vending machine and Can & PET bottle vending machine Website : Smart Vending HQ address: 14 & 14A, Jalan Harmonium 35/2, Taman Desa Tebrau, 81100, Johor Contact number: 07-350 8937 Email: [email protected] Operating hours: 9am – 6pm (Monday – Friday), Closed on Saturday & Sunday.
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Vending Machine Business Plan
Vending machines are no longer used to dispose of snacks. From frozen foods to stationery items, you name it and there might be a vending machine selling that product.
And if you want a business that requires less time and is profitable, then a vending machine business might be your thing. It also allows you to get creative with products and packaging.
All you need is a product idea, a little bit of research, and a vending machine business plan to help you get started. Here we’ll give you an insight into the vending machine industry and a few tips to help you set up your business better.
Before you start writing your business plan for your Vending Machine Business, spend as much time as you can reading through some samples of Food, Beverage & Restaurant Business Plans templates .
Our sample Vending Machine Business Plan can help you with writing a well-rounded business plan for your business. It can act as a guide and prevent you from getting stuck in a certain section for too long.
The global vending machine industry stood at a market value of 30.30 billion dollars in 2018 and is expected to grow at a rapid pace in the coming years too.
Vending machines are super convenient and accessible. Hence, their popularity is increasing amongst the working class who always have less time on their hands and want to grab a quick snack or any other merchandise.
Also, as the vending machines require much less space compared to traditional convenience stores they are perfect for offices and other commercial settings. Also, the cashless ways of paying grow vending machines are bound to get more popular as they make such transactions easier.
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Things to Consider Before Writing a Vending Machine Business Plan
Pick your niche, select a good location, figure out good packaging and storage techniques, figure out security measures, chalking out your business plan.
With people returning to work post the COVID-19 pandemic and contactless services still being in vogue a vending machine business can be an exceptionally profitable one if done right.
Not just that vending machines are easy to use, but they come with a variety of product niches and help you avoid the hassle of showing product after product to customers, who’ll have every option displayed right in front of them with a vending machine.
And though refilling a vending machine and protecting it from theft and vandalism might seem like a boring job, a vending machine business is much more than that.
From vending machines that offer products ranging from granola bars to office supplies to the ones that take orders from apps through artificial intelligence, the vending machine business has gone through a massive change over the decades.
But, one more interesting fact is that there are over 5 million vending machines in the US alone, and if you want to last in such a competitive market you need a proper business plan. So, read on to find out how to write a vending machine business plan.
Why do You Need a Vending Machine Business Plan?
Before we discuss how to write a business plan , it is only fair to tell you about its advantages first. A vending machine business plan will help you decide your product niche, and the location where you can find your targeted customer, it helps you manage your finances, devise a marketing and pricing strategy, and run the operations of your business smoothly.
It also helps you design your brand image, decide on the scale of expansion and become more cost-effective as a business. Thus, a well-written business plan can serve a variety of purposes and help the different facets of your business is flourishing.
This brings us to the central topic of this blog, how to write a vending machine business plan.
How to Write a Vending Machine Business Plan?
Even though you can write a business plan from scratch yourself it is always a good idea to get a little expert help before you start writing one. You can either use a pre-designed template or an online business plan software.
For, writing a good plan always remember, that a plan should be clear, realistic, and customizable. It should not be a dead letter, but a living document that grows with the industry.
Here are a few sections that you can include in your business plan to make it a well-rounded one.
Vending Machine Business Plan Outline
This is the standard business plan outline which will cover all important sections that you should include in your business plan.
- Mission statement
- Vision Statement
- Customer Focus
- Success Factors
- Financial Summary
- 3 Year profit forecast
- Startup cost
- Products and services
- Market Analysis
- Industry Analysis
- Market Trends
- Working Community
- Residential Community
- SWOT Analysis
- Advertising Strategy
- Pricing Strategy
- Financial Plan
- Important Assumptions
- Brake-even Analysis
- Profit Yearly
- Gross Margin Yearly
- Projected Cash Flow
- Projected Balance Sheet
- Business Ratios
What to Include in a Vending Machine Business Plan?
Although your vending machine business plan would keep growing alongside your business there are certain key areas that you must include in your business plan.
1. Executive Summary
The executive summary section sums up your vision, business idea, and strategy. It consists of a summary of all the sections of your business. It is important to write a good executive summary, especially if you are expecting to get funded.
As a vending machine business, you should include your range of products and target audience, preferable locations, financial summary, and pricing strategy in your executive summary.
2. Company Summary
In this section you will summarise all that your company stands for:
- Your target audience, whether they are kids, students, working professionals, or tourists.
- Your niche, if it is beverages, packaged food, health food, stationery, or some other products.
- Your preferred location( select this as per your target audience)
All in all this section defines what your company is.
3. Competitive Analysis
In this section, you should include everything you can find about your direct and indirect competitors. You should note down points that are working for them, strategies that have led to their failure, and what makes you stand out from your competition. Apart from that, you should also see if you are standing out in a positive or negative light.
4. SWOT Analysis
SWOT (strength, weakness, opportunity, and threat) analysis is an analytical framework generally used to evaluate any business’ competitive position in the market.
While conducting a SWOT analysis , it is important to initially focus on the market’s threats and opportunities. This will allow you to gain a deeper understanding of how your business’s strengths and weaknesses relate to market opportunities and threats.
Here’s an example of a SWOT analysis prepared for a vending machine business using Upmetrics:
5. Financial Plan
A financial plan is essential for the success of a vending machine business plan. It helps you decide whether you need funding or not, which are the most viable options for being funded, how much should you spend initially, when your business is ready for an expansion, etc. Therefore, a financial plan is exceptionally helpful and should be included in your business plan.
Download a sample vending machine business plan
Need help writing your business plan from scratch? Here you go; download our free vending machine business plan pdf to start.
It’s a modern business plan template specifically designed for your vending machine business. Use the example business plan as a guide for writing your own.
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A business plan software like Upmetrics is the best way to draft your business plan. This incredible tool comes with step-by-step instructions, customizable templates, and 400+ sample business plans to help you get started.
So, whether starting a new vending machine business or planning to grow an existing one, Upmetrics is the tool you need to create a business plan.
So what are you waiting for? Start planning today!
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Frequently asked questions, what is the easiest way to write your vending machine business plan.
A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any vending machine business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .
How do I write a good market analysis in a vending machine business plan?
Market analysis is one of the key components of your business plan that requires deep research and a thorough understanding of your industry.
We can categorize the process of writing a good market analysis section into the following steps:
- Stating the objective of your market analysis—e.g., investor funding.
- Industry study—market size, growth potential, market trends, etc.
- Identifying target market—based on user behavior and demographics.
- Analyzing direct and indirect competitors.
- Calculating market share—understanding TAM, SAM, and SOM.
- Knowing regulations and restrictions
- Organizing data and writing the first draft.
Writing a marketing analysis section can be overwhelming, but using ChatGPT for market research can make things easier.
How detailed should the financial projections be in my vending machine business plan?
The level of detail of the financial projections of your vending machine business may vary considering various business aspects like direct and indirect competition, pricing, and operational efficiency. However, your financial projections must be comprehensive enough to demonstrate a complete view of your financial performance.
Generally, the statements included in a business plan offer financial projections for at least the first three or five years of business operations.
What's the importance of a marketing strategy in a vending machine business plan?
Marketing strategy is a key component of your vending machine business plan. Whether it is about achieving certain business goals or helping your investors understand your plan to maximize their return on investment—an impactful marketing strategy is the way to do it!
Here are a few pointers to help you understand the importance of having an impactful marketing strategy:
- It provides your business an edge over your competitors.
- It helps investors better understand your business and growth potential.
- It helps you develop products with the best profit potential.
- It helps you set accurate pricing for your products or services.
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Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more
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Vending Machine Business Plan Template
Written by Dave Lavinsky
Over the past 20+ years, we have helped over 3,000 entrepreneurs and business owners create business plans to start and grow their vending machine businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a vending machine business plan template step-by-step so you can create your plan today.
Download our Ultimate Vending Machine Business Plan Template here >
What Is a Business Plan?
A business plan provides a snapshot of your vending machine as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
Source of Funding for Vending Machines
With regards to funding, the main sources of funding for a vending machine business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
The second most common form of funding for a vending machine business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will not fund a vending machine business.
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Your business plan should include 10 sections as follows:
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of vending machine business you are operating and the status; for example, are you a startup, do you have a vending machine business that you would like to grow, or are you operating a chain of vending machine businesses.
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the vending machine industry. Discuss the type of vending machine business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
For example, you might operate one of the following types:
- Food and snacks : this type of vending machine business typically offers pre-packaged snacks such as chips, cookies, etc., as well as perishable products such as sandwiches, ice cream, and fruit
- Beverages : this type of vending machine can be for hot drinks (coffee, cocoa), or cold (soft drinks, water)
- Candy : this type of vending machine is stocked exclusively with candy and gum
- Other products : this could be healthy food options (granola, fruit, hummus, etc.), or consumer products such as electronics, movies, condoms, souvenirs, etc.
In addition to explaining the type of vending machine you operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new machine locations, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
In your industry analysis, you need to provide an overview of the vending machine business.
While this may seem unnecessary, it serves multiple purposes.
First, researching the vending machine industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards selling advertising on vending machines, it would be helpful to ensure your plan calls for varying ad types and sizes.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your vending machine business plan:
- How big is the vending machine business (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your vending machine. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
The following are examples of customer segments: hotels, office buildings, correctional facilities, etc.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of vending machine you operate. Clearly correctional facilities would want different pricing and product options, and would respond to different marketing promotions than office buildings.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve (both the end customers (who purchase items in your vending machines) and the decision-makers (who approve your desire to place a vending machine in their facility).
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
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Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other vending machines.
Indirect competitors are other options that customers have to purchase from you that aren’t direct competitors. This includes convenience stores, grocery stores, pharmacies and restaurants that offer quick food. You need to mention such competition to show you understand that not everyone who purchases convenience items uses a vending machine every day.
With regards to direct competition, you want to detail the other vending machine businesses with which you compete. Most likely, your direct competitors will be vending machines located very close to your location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What products do they offer?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide superior products?
- Will you provide products that your competitors don’t offer?
- Will you make it easier or faster for customers to purchase your products?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Product : in the product section you should reiterate the type of vending machine business that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to snack machines, will you offer machines that sell items such as coffee or other consumer products?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the items you offer and their prices.
Place : Place refers to the location of your vending machine. Document your location and mention how the location will impact your success. For example, is your vending machine located inside a heavily trafficked office building, or gym, etc. Discuss how your location might provide a steady stream of customers.
Promotions : the final part of your vending machine marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Making your vending machine clean and visually appealing to attract passing customers
- Focusing on machine design and technology for a better user experience
- Placing vending machines in strategic locations
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your vending machine such as procuring products, delivering and restocking, keeping the machines clean, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to place your 10th machine, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.
Ideally you and/or your team members have direct experience in the vending machine business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in vending machines and/or successfully running retail and small businesses.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you serve 50 customers per day or 100? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your vending machine business, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a vending machine:
- Cost of equipment like vending machines, refrigerated delivery trucks, etc.
- Cost of maintaining an adequate amount of inventory
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Vending Machine Business Plan Summary
Putting together a business plan for your vending machine business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the vending machine business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful vending machine business.
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Vending Machine Business Plan – Sample Layout With Section Titles
The preparation of your vending machine business plan will be the most important thing that you do prior to launching your new venture.
A business plan will be a crucial resource that will help guide your business in the right direction. A business plan sets out what has to happen in order for you to reach your goals, outlines how you will do it and sets out alternative plans in case things change further down the line. It forces you to do the research that is necessary in order to find out if there really is a market for the vending machines and locations that you have in mind.
It may be necessary to have a plan written in a formal, professional style if your aim is to use it to convince bankers or investors to support your idea. However, even if you don’t have anything to prove to anyone, your business plan will help to confirm the viability of your ideas in your own mind.
Keep a copy of your plan on your PC as well as in a file or binder in case of emergency. Don’t forget about your business plan once you have opened your doors for business. Refer to it regularly to make sure that you are on track to meet targets. Don’t be afraid to make changes to the plan where necessary.
Every entrepreneur or business consultant will have different ideas about how a business plan should be structured. There are many different templates available online and some sites even have samples relating directly to the vending machine industry. Below we offer an example of a suitable outline with section titles that you might consider including in your own vending machine business plan.
Cover and Contents Page
Start off with a cover page with a heading to let people know what the report is about, who the author is and when it was written. If you will be presenting the report to many different people then you may consider including a personalized cover letter with each copy of the plan. Start out with a table of contents so that readers can easily find their way around the report.
Summarize the other sections of your business plan. Present some brief information on the opportunities that you see in the market and summarize what it is that you intend to do with your business to capitalize on these opportunities. Try to entice readers into reading the whole report.
Offer the reader some background information on yourself and your reasons for starting a vending machine business. Provide details of any relevant experience or competitive advantages that you have.
You can also include a vending industry background showing national industry data as well as information about the local industry that you plan on entering.
A mission statement is usually a phrase or a couple of short sentences that summarises what your business is all about, what it does and how well it does it. It is a good way to remember the basic goals or philosophy of your company aside from the profit motive. A good mission statement could mention something about the standard of your machines and products or how you strive to be better than your competitors.
Goals and Objectives
State the goals that you wish to achieve in the short and medium terms. Goals could include placing a certain number a vending machines or reaching a certain income level per machine.
Set out a list of startup costs and calculate the total amount of capital that will be needed for the company to get started. Report on some of the funding options that are available to the owners.
In this section of the report you can also mention some of the other things that must happen in order for the business to commence trading legally and professionally. Mention the processes and the fees involved with applying for licenses, permits and other paperwork under the laws of the region where the business will be operating.
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Ownership and Management Structure
Note who the founders of the company are and the particular ownership interest that each has in the business. For those who will be active in the management of the business it is important to outline what role they will play and their responsibilities. Will the business be registered as a sole proprietorship, a partnership or a corporation?
This section of a business plan should outline the details of how you plan on running the vending machine business. Include information on where your business will be based, administration, any plans that you have to hire employees and how your business will run on a day to day basis.
Include details on vending machines, maintenance, products, distributors, route planning and how you will record and manage sales data. What systems will you put in place to maximize productivity and efficiency?
Try to come up with solid reasons why you are choosing a certain vending machine, product line or system. Wherever possible include some supporting evidence from research that you have done.
Using data from your market research you can report on the current state of your target market and identify some of the opportunities. Here you can include demographic data as well as information that you have gathered from surveys and other investigations.
Provide information on the competition in your target area and examine their strengths and weaknesses. Look at ways of delivering products and services via your machines that are distinctly different from what your competitors are offering. Get ideas from them about what is working well and what isn’t. Look for a competitive edge. Don’t forget to also mention indirect competitors such as convenience stores, in-house cafeterias or food vans.
Outline a strategy for creating a vending brand that will meet market needs. Based on the market opportunities that you see, set out a strategy for meeting customer needs in terms of locations, vending machines, product lines and pricing.
Provide details on how you plan on getting new machine locations, arranging appointments with ‘decision makers’ and selling your services to them. Your marketing could mostly be done by approaching decision makers directly or you could rely on advertising to generate some enquiries.
Also outline your plan for marketing directly to your customers or end users. These could include ‘point of sale’ promotions on the machine front or how you or your staff will build relationships with customers when you visit the premises where your machines are located.
You should also mention how you plan on maintaining vending accounts and customer satisfaction in the long term. Customer retention is just as important as customer acquisition.
Use a spreadsheet program to set out forecasts of cash flows in and out of your vending machine business over a hypothetical two year time period. If you have done your research you should be able to anticipate monthly income and expenses going forward. You will thus be able to determine future levels of profitability and a break even point.
Run a variety of different scenarios that consider a conservative growth rate, an expected growth rate and an optimistic growth rate. Things don’t always happen like you expect so it is important that you plan for a variety of outcomes.
Lastly, you should attach an appendix to the report that includes any reference letters, documents, vending machine pictures or other supporting material that has been referred to in the contents of the plan. Try to back up all of your assumptions with proof wherever possible.
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Ask the analyst for, malaysia vending machines market (2023-2029) | size, trends, share, outlook, analysis, revenue, value, growth, industry, segmentation & covid-19 impact.
Market Forecast By Applications (Commercial Places, Offices, Public Places, Others), By Payment Mode (Cash, Cashless) And Competitive Landscape
- Report Description
- Table of Content
- Related Topics
Topics Covered in the Malaysia Vending Machines Market
Malaysia Vending Machines Market report thoroughly covers the market by applications and by payment mode. The Vending Machines Market outlook report provides an unbiased and detailed analysis of the ongoing Vending Machines Market trends, opportunities/high growth areas, and market drivers which would help the stakeholders to devise and align their market strategies according to the current and future market dynamics.
Malaysia Vending Machines Market Synopsis
Malaysia Vending Machines Market is expected to grow at a rapid pace during the forecast period. The major drivers of this market include growing demand for easy access to snacks and beverages. In addition, increasing demand for on-the-go food and beverages, expansion of vending machines networks, and growing popularity of cashless payment options are some other factors propelling the Malaysia Vending Machines Market growth in the upcoming years. However, high installation and maintenance costs are some of the major challenges that hinders the growth of this market. In addition, competition from other retail channels is also projected to hamper market growth over the forecast period.
According to 6Wresearch, the Malaysia Vending Machines Market size is predicted to grow steadily during the 2023-2029. The key drivers of this market are advancements in vending machine technology, the rising demand for convenient on-the-go food and beverage options, the increasing popularity of cashless payments, and the growing need for automated retail solutions. In general, consumers are gradually looking for quick and easy food and beverage options that can be accessed without having to contend with crowded stores. Moreover, consumers become more familiar to using digital payment methods. This trend is being driven by the convenience and efficiency of cashless payments. However, the lack of a clear and concise regulatory framework for the operation of vending machines in Malaysia has resulted in several operators operating without proper licenses. The high cost of living in Malaysia has made it difficult for many people to afford necessities, which is expected to hamper the growth of Malaysia Vending Machines Industry . Nevertheless, with the rising disposable income, technological advancements, and government initiatives, the demand for vending machines in Malaysia has been proliferating over the years.
COVID-19 Impact on the Malaysia Vending Machines Market
The COVID-19 pandemic had a noteworthy impact on the vending machines industry in Malaysia. For instance, the implementation of lockdowns resulted in the temporary closure of many vending machines as they were in public spaces such as schools, offices, and shopping malls. Additionally, the rising trend of remote work and online shopping, most of the foot traffic in public spaces has decreased. Consequently, the demand for vending machines has decline during the pandemic and led to decrease in revenue for vending machine operators. Furthermore, the pandemic has led to a shift in consumer behavior, with many people opting for contactless payment methods. This has led to an increased demand for cashless and touchless vending machines.
Key Players in the Malaysia Vending Machines Market
There are several foremost leading players in the Malaysia Vending Machines Market which includes;
- Aik Cheong Coffee Roaster Sdn Bhd
- Vending Machine Service Provider Sdn Bhd
- The Vending Shop Sdn Bhd
- Symphony Vending Sdn Bhd
- MyVend Asia Sdn Bhd
Market Analysis by Applications
By applications, the Public Places segment is leading the Malaysia Vending Machines Market share and is expected to continue to grow in the coming years due to the increasing demand for touchless and cashless payment options. Public Places include shopping malls, airports, and hospitals. These locations provide a convenient and accessible way for consumers to purchase on-the-go snacks and beverages.
Market Analysis by Payment Mode
According to Dhaval, Research Manager, 6Wresearch , the cashless payment segment is growing faster than the cash payment segment due to the increasing adoption of cashless payment methods. Also, the growth of cashless payment modes is also driven by the rising availability of vending machines in Malaysia.
Key attractiveness of the report
- COVID-19 Impact on the Market.
- 10 Years Market Numbers.
- Historical Data Starting from 2019 to 2022.
- Base Year: 2022.
- Forecast Data until 2029.
- Key Performance Indicators Impacting the Market.
- Major Upcoming Developments and Projects.
Key Highlights of the Report:
- Malaysia Vending machines Market Outlook
- Market Size of Malaysia Vending machines Market, 2022
- Forecast of Malaysia Vending machines Market, 2029
- Historical Data and Forecast of Malaysia Vending machines Revenues & Volume for the Period 2019 - 2029
- Malaysia Vending machines Market Trend Evolution
- Malaysia Vending machines Market Drivers and Challenges
- Malaysia Vending machines Price Trends
- Malaysia Vending machines Porter's Five Forces
- Malaysia Vending machines Industry Life Cycle
- Historical Data and Forecast of Malaysia Vending machines Market Revenues & Volume By Applications for the Period 2019 - 2029
- Historical Data and Forecast of Malaysia Vending machines Market Revenues & Volume By Commercial Places for the Period 2019 - 2029
- Historical Data and Forecast of Malaysia Vending machines Market Revenues & Volume By Offices for the Period 2019 - 2029
- Historical Data and Forecast of Malaysia Vending machines Market Revenues & Volume By Public Places for the Period 2019 - 2029
- Historical Data and Forecast of Malaysia Vending machines Market Revenues & Volume By Others for the Period 2019 - 2029
- Historical Data and Forecast of Malaysia Vending machines Market Revenues & Volume By Payment Mode for the Period 2019 - 2029
- Historical Data and Forecast of Malaysia Vending machines Market Revenues & Volume By Cash for the Period 2019 - 2029
- Historical Data and Forecast of Malaysia Vending machines Market Revenues & Volume By Cashless for the Period 2019 - 2029
- Malaysia Vending machines Import Export Trade Statistics
- Market Opportunity Assessment By Applications
- Market Opportunity Assessment By Payment Mode
- Malaysia Vending machines Top Companies Market Share
- Malaysia Vending machines Competitive Benchmarking By Technical and Operational Parameters
- Malaysia Vending machines Company Profiles
- Malaysia Vending machines Key Strategic Recommendations
The report offers a comprehensive study of the subsequent market segments:
- Commercial Places
- Public Places
By Payment Mode
Malaysia vending machines market: faqs, what are the restraints faced by vending machine operators in malaysia, what are the drivers of the vending machines market in malaysia, how are vending machine operatives in malaysia adapting to the evolving market conditions, what are the opportunities for growth in the malaysia vending machines market, do you also provide customisation in the market study.
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Follow our news, recent searches, in malaysia, trading using vending machines a way for lower income group to avoid handouts, advertisement.
As part of a programme called the People’s Income Initiative, lower-income households in Malaysia are able to sell food and drinks at vending machines in areas with high footfall. The government pays for the monthly rental of these machines.
A vending machine under the People's Income Initiative (IPR) scheme in KL Sentral. (Photo: CNA/Fadza Ishak)
Rashvinjeet S Bedi
KUALA LUMPUR: Every morning before the rush hour period at transit hub Kuala Lumpur Sentral (KL Sentral), Amiruddin Ahmad Abdul Jalil can be seen placing boxes of food such as curry puffs, kueh lapis, and ketayap - a type of pandan-flavoured rolled crepe - in a red vending machine a few metres away from a McDonald’s restaurant.
The 28-year-old, who lives in Kuala Lumpur, has been doing this daily for almost three months before he heads off to his regular job at a private firm.
Each box is sold for RM2 (US$0.43), with peak sales occurring when the transportation hub is filled with commuters on their way to work.
In the evenings, Amiruddin goes back to KL Sentral to fill the machine with boxes of mixed rice and sausage buns, which are sold for RM5 and RM3 respectively.
For his efforts, Amiruddin - who prepares the food with his wife - earns an extra RM4,000 monthly from this programme called the People’s Income Initiative (IPR).
It is helmed by the Ministry of Economy’s economic planning unit.
“This opportunity has reduced the financial burden of my household,” he told CNA recently.
Launched earlier in February, the initiative is an effort to help the country's poor increase their income by at least RM2,000 each month.
A total of RM750 million has been set aside for the programme under the 2023 budget .
Amid efforts to increase the financial independence of lower income households in Malaysia, the programme has seen sustained interest from members of the public keen to better their livelihoods.
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Government foots vending machine rental.
During the launch of the IPR project back in February, Economic Affairs Minister Rafizi Ramli had termed it a “fishing rod” for people to attain financial independence.
There are three thrusts to the project - namely the Food Entrepreneur Initiative (Insan), the Agro Entrepreneur Initiative (Intan), and the Services Operator Initiative (Ikhsan).
Amiruddin is a participant of the Insan initiative, which provides food entrepreneurs with a self-service vending machine to sell food and drinks at strategic locations around the country such as transportation hubs and hospitals.
He told CNA that he had applied for the initiative online after its launch.
As part of the initiative, the government pays for the monthly rental of the vending machine for two years, with the entrepreneur earning the profits from their sales. To keep prices affordable for consumers, packs of food sold have a cap of RM5 per box.
Amiruddin estimates that almost 90 per cent of the food is sold out daily, with the rest given to the homeless or for self-consumption.
There is a mobile application to monitor and track inventory and sales of the food, with participants able to top up boxes in the vending machines when stocks run low.
Amiruddin and his wife spend about two to three hours each day preparing the food, with Amiruddin admitting that it was tough at first. He and his wife have, however, gotten used to the routine.
“There is more continuity and sustainability in this programme compared to direct cash aid. There are many benefits for the community as the traders can earn more income while the public can purchase cheap meals,” he said, adding that he sells about 100 boxes of food a day.
As of June, over 10,000 people have signed up for the Insan program.
A total of 100 machines are operating, with the government targeting 5,000 of these machines to be up and running by the end of this year.
TRADERS GRATEFUL FOR TIME SAVED TO SPEND WITH FAMILY
Nurul Fatimah Norani, who was allocated a machine at the JB Sentral transportation hub, told CNA that she has benefited from the initiative.
The single mother of three has seen her income increase by more than 30 per cent compared to when she was working as a cook in a factory.
The 35-year-old used to earn almost RM3,000 a month for her work previously, but can now earn about RM4,000 a month.
She resigned from her previous job as a cook to concentrate on the vending machine business. “This initiative is very good, especially for someone like me. Your income does depend on how hardworking you are,” the mother of three school-going children told CNA.
In the morning, she sells breakfast meals such as nasi lemak and friend noodles. She then tops up her vending machine with boxes of mixed rice for the lunchtime crowd. In the evenings, finger foods such as nuggets and sausages are sold.
Her nasi lemak sells for RM2 while mixed rice - which consists of a portion of white rice, a piece of fried chicken and vegetables - costs RM5.
She monitors the amount of food in the vending machine via an application on her phone and tops it up when the boxes run out.
With this initiative, Fatimah told CNA that she has more time with her children as it takes her about two hours to prepare the food at home. She said that she previously did not have any days off when she worked at the factory.
She added that she is grateful that she does not have to depend on the government for any aid.
“I don’t want to depend on the government or anyone for any handouts,” she said.
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Similarly Normaladiana Mohd Yazal, 36, said that the initiative has helped her earn an extra RM2,000 to RM3,000 monthly.
The mother of two - who has a vending machine at KL Sentral - said that the boxes of food she places every morning are usually sold out.
She sells banana cakes, nasi lemak, and sausage with eggs and beans among other things.
Normaladiana, who lives at the low-cost flat in Pantai Dalam, Kuala Lumpur with her husband and two school-going children, said that the initiative is convenient as she does not have to physically be at KL Sentral unless there was an issue with the machine.
“It isn’t difficult. We just place our food there and wait for it to be sold,” said Normaladiana, who also does catering from home when requested.
She added: “This sort of programme should be expanded for more of the lower income people like us.”
EFFORTS TO HELP THE POOR HAS TO CHANGE WITH THE TIMES: ECONOMIC AFFAIRS MINISTER
At a political rally in Negeri Sembilan earlier this month, Mr Rafizi had touched on the topic of the vending machines, saying that the Opposition had attacked the idea.
In his speech, Mr Rafizi said that in the 70s and 80s, the government had built spaces, provided stalls for people or shops for them to rent.
“The problem now is that the rent now is expensive and space for stalls is limited … So from one decade to another, the effort must change. The poor need a place to conduct business,” he said.
He added that a stall might cost RM20,000 to be built while space needed to be found in the first place.
“That is why we figured that there wasn’t a need for any building. We only needed a place to sell as long as that place is convenient for people.
“Importantly, we wanted to make sure they didn’t have to hire anyone, pay for utilities, and wait there the whole day. Economic-wise, the best way was to give them a vending machine,” he said.
He said that the minimum amount of money the participants of the initiative earned was RM150 to RM200 a day.
“There are those who even earn RM600 a day. Some even RM800 a day,” he said.
CNA has reached out to Mr Rafizi and his ministry for comments on the initiative.
Read this story in Bahasa Melayu here .
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Vending Machine Business Plan Sample
Vending machine business plan for starting your own company
Starting a vending machine business is very easy and extremely profitable as well. If you don’t know how to start a vending business , just go through this vending machines business plan . It will guide you through everything which you need to know for starting this venture.
The first thing you should do is to develop a comprehensive plan for your business. The vending machines business plan will not only help you in startup but it will also help you in taking important decisions for your company over the next years. In case you don’t know how to write a good vending machine business plan , we are providing a detailed business plan of a vending machine business startup ‘Crunch & Cool’ to help you avoid the trouble of making a plan yourself.
2.1 the business.
Crunch & Cool will be a licensed and insured vending machine business whose main office will be located in Downtown Manhattan. The company’s warehouse for storing the products will be at a 10 minutes’ drive from the main office.
The business will be solely owned and operated by Jack Kith. Jack will hire a small team comprising of sales executives, drivers, technicians and assistants for helping him in his venture.
Our customers will primarily be the residential and working-class community living in Manhattan but with time, we also plan to increase our business in other cities as well.
2.4 Target of the Company
Our primary target is to become the best vending machine business in Manhattan within next 3 years of our launch. As per our vending machine business plan example , our secondary target is to achieve the net profit margin of $10k/month by the end of the first year, $15k/month by the second year, and $25k/month by the third year.
3.1 company owner.
Jack is a business graduate of Harvard University. After completing his Bachelor’s, he worked with a couple of fast-food restaurants business plan at executive positions. He is known for his sharp business acumen and exceptional management skills.
3.2 Why the vending machine business is being started
The main motive behind Jack opening a vending machine business plan is his intense passion for business. Jack has exceptional business skills and this venture is just his first step into the business world.
3.3 How the vending machine business will be started
The company will buy used vending machines for startup which will then be installed in several regions in Manhattan. Nearly 35% of machines will be located in the residential zone while the remaining will be distributed in the commercial zone as well as near schools, offices, and other institutions. The company’s financial experts have forecasted following costs for the start-up:
The detailed start-up information is as follows:
Services for customers
Before you move to starting a vending machines business plan , you must plan what type of vending machines will you install and what products will they provide to your customers because you can only plan the subsequent things after this stage. Our vending machines will offer following products:
- Snacks such as chips, cookies, cakes etc.
- Drinks and beverages including milk
- Hot served drinks including tea and coffee
- Frozen foods, chilled drinks and ice creams
- Cigarettes and lottery tickets
Marketing Analysis of vending machine business
The most important component of effective vending machine business plans is their marketing analysis that’s why Jack acquired the services of marketing experts to help him through this phase. It is only after this stage that a good vending machine marketing strategy for business could have been developed.
After identifying the local market trends in Manhattan, the marketing experts and analysts helped him in developing a brilliant vending machine business model. If you are starting on a small scale then you can carry out a marketing analysis yourself by taking help from this vending machines business plan template.
5.1 Market Trends
The vending industry annually contributes about $30 billion in revenue to the United States. There are more than 7 million vending machines in the United States and nearly 100 million Americans use one of the installed vending machines each day. Considering the convenience they provide to the users, the number of installed vending machines have been increasing during the last few years. In short, this industry has a lot of potential and a business in this industry can yield immense profit provided that you plan it successfully.
5.2 Marketing Segmentation
Our marketing experts have identified following type of target audience which can become our potential customers.
The detailed marketing segmentation comprising of the company’s target audience is as follows:
5.2.1 Working Community:
The first category includes the workers and employees who work in the businesses or offices in Manhattan. This group leads a strenuous life, burdened with plenty of work and thousands of matters to think upon. Due to their busy routine, most of the time they can’t go to restaurants and hence use vending machines for grabbing a bite.
5.2.2 Residential Community:
The second group of our target customers will be the residential community. This group comprises of children, teens, adults and senior citizens. They also use vending machines to conveniently get their required products as compared to visiting the stores.
The third category includes those people who do not work or reside in our target areas but have come to for any business purpose or commercial activity. This group also often tends to stop by vending machines for having a quick snack, beverages or cigarettes. The detailed market analysis of our potential customers is given in the following table:
5.3 Business Target
Our business targets are as follows:
- To become the best vending machine business in Manhattan within next 3 years of our launch
- To recover the initial investment within next 1 year of launch
- To expand the business and install vending machines in 3 other cities within 5 years
5.4 Product Pricing
After considering the market demands, we have priced all our products in the similar ranges as of our competitors.
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Highly Efficient Service! I am incredibly happy with the outcome; Alex and his team are highly efficient professionals with a diverse bank of knowledge.
Sales strategy is an important component of any startup plan hence it must be given proper attention before you think about how to start a vending machine business .
6.1 Competitive Analysis
Vending machine industry is one of the most competitive industries since there are more than 7 million vending machines in the United States so any startup in this industry has a really tough competition. To survive in such competitive environment, you must come up with some competitive advantage before thinking about how to open a vending machine business . Our competitive advantage is that our vending machines will be always full of fresh products and stock. We will make sure our every customer gets everything from our vending machines so that they don’t need to visit stores or other places.
6.2 Sales Strategy
We will install our machines at all those places where there are no prior vending machines installed. We will offer a 10% discount on all products for the first three months of our launch. We will also paint vending machines in various eye-catching themes for the purpose of attracting customers.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
Our forecasted sales pattern is given in the following column chart:
The detailed sales forecast is given in the following table:
After deciding the strategy, you must prepare a personnel plan before you start your own vending machine business . The personnel plan of Crunch & Cool is as follows:
7.1 Company Staff
Jack will act as the CEO of the company and will initially hire following people:
- 1 Warehouse Manager for managing the operations at company’s warehouse
- 2 Sales Executives responsible for marketing initiatives
- 15 Assistants for filling vending machines with stock
- 4 Drivers for transporting products
- 2 Technicians for ensuring the vending machines keep working perfectly
7.2 Average Salary of Employees
The final thing to do before you think about how to open a vending machine business plan is to develop a comprehensive financial plan which will cover the detailed costs of startup.
8.1 Important Assumptions
8.2 brake-even analysis.
8.3 Projected Profit and Loss
8.3.1 profit monthly.
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
The following column diagram shows the projected cash flow.
The following table shows the projected cash flow:
8.5 Projected Balance Sheet
The following table shows projected balance sheet:
8.6 Business Ratios
The following table shows data about business ratios:
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Malaysian reverse vending machine startup eyes scale to tackle plastic crisis
Though covid has slowed their progress, the founders of reverse vending machine startup klean say their model of generating revenue and raising environmental awareness from the circular economy of plastic is primed to take off..
Klean is one of Malaysia’s most ambitious startups seeking to disrupt the plastic waste sector.
Finalists of sustainability innovation competition The Liveability Challenge in 2018, Klean is now looking to scale up its impact radius to the Pacific island of Fiji and beyond.
Klean’s reverse vending machines can now be found in shopping malls and petrol stations around Kuala Lumpur, where customers are encouraged to recycle in return for discounts.
People come from as far away as Cheras, dumping about 50-60 bottles in one go to get lower-priced shopping and fuel discounts.
One unique thing about Klean’s machines is that they can tell the difference between the bottles, enabling a crucial first step in the circular economy for plastic — separation at source.
Datuk Mohamad Arif Abdullah, co-founder of Klean, tells Eco-Business that this bit of technology can complement existing corporate sustainability initiatives. Coca Cola’s pledge to recycle a used bottle for every one the company sells by 2030, for example, might be hard to track on a global scale. Klean’s machines can therefore provide useful information on the progress of sustainability initiatives.
Prior to being finalists of The Liveability Challenge 2020, they were awarded a grant from the United Nations Capital Development Fund’s (UNDCF) Pacific Financial Inclusion Program. This fund is now being channelled towards rolling out machines in Fiji in partnership with FijiCare Insurance. The model links sustainability with healthcare and will provide people with macro healthcare insurance in exchange for recycling plastic.
In this interview with Eco-Business, Klean’s founders, Abdullah and Dr Nick Boden, talk about the startup’s business model, upcoming collaborations for scaling up, and how the Covid-19 has reshaped their strategy.
What are some upcoming projects Klean is working on?
Our ongoing collaboration with Resorts World Genting [a casino and mall complex] allows theme park riders to get discounted or free rides in exchange for recycling bottles.
We have also just signed a partnership with Simon Christopher, founder of the Blu Hope Initiative . Simon is a filmmaker and scuba diver aiming to make the Coral Triangle plastic-neutral by 2025.
We are talking to him about getting Johor and Pahang to also be a part of this initiative, with a focus on the tourism islands. It will launch in the next three months.
PET (Polyethylene terephthalate, the plastic most commonly used to make bottles) is just one part of the problem. To tackle other types of plastics, we’re looking to introduce what we’re calling the dropbox concept.
We will be taking an old shipping container and turning it into a reverse vending machine. This machine will allow you to recycle PET plastic bottles on one side, and on the other, you can redeem a Klean bag made out of recycled PET.
The state of Selangor, where we are based, doesn’t have recyclable waste collection systems, and the government will have to spend hundreds of millions of dollars to create this infrastructure.
So instead of doing that, our initiative will hopefully encourage consumers to take plastic out of the household waste, and transport it to central locations like [supermarket chain] Tesco when they do their shopping.
How has the Covid-19 affected your plans?
The space we’re in (waste management) hasn’t been a high priority for Covid relief efforts, and a lot of our plans have been put on hold, including outside of Malaysia.
What should be a core part of recovery business models has been treated as a non-essential CSR activity. We have yet to fully transition multinationals into looking at their waste problems as an essential part of their business.
The lockdown situation has also slowed our activities. With our plans in Fiji, we now have to train the locals to operate our machines, which can be challenging to do over Zoom calls.
Something that would have taken two weeks now takes six months, but I suppose tough times like these means we can really put our technology to the test.
If we’re able to implement what we’re doing in a place like Fiji, which is miles away, we can learn a lot from the experience.
What has been the hardest thing about scaling up your project?
The uptake on the Malaysian government’s end has been quite slow, so we’ve had to redesign our business plan to make ourselves self-sufficient.
We have transitioned into a display advertising model for our machines located at petrol stations and shopping centres. For any companies who want to invest in our machines, the returns will not just come from plastic but from selling advertisements.
When we spoke to Shell (one of our retail partners) after the first lockdown, they were telling us that their sales of bottled water had skyrocketed, and that they were making more money from selling bottled water off the shelves of their convenience stores than they were from selling petrol. The vending machines also help Shell lure customers from rival petrol retailers.
Where do you see yourself in five years?
In five years, the plastic problem is not going to have gone away. In fact, if you look at a lot of the data that’s out there, it’s gotten worse — and it’s inextricably linked to other social concerns like water supply and poverty.
Malaysia, where we’re based, has had a massive water quality and supply issue. In the state of Selangor alone, we’ve had maybe 10 water cuts lasting three to four days in the last year alone.
So people are obviously buying bottled water more and more, and as a result of that, their trust in the public water supply system is slowly being eroded.
There exist many small-scale initiatives like turning bottles into football jerseys , but these merely scrape the surface of the problem, and that solution is not really scalable.
People still have to buy other clothes and they can’t walk around naked, so you haven’t really solved the problem. But if you solve problems surrounding the water industry and give the public access to clean water, then you get to bypass the need for plastic bottles.
This is why another thing we’re working on is buying very low-cost water purification systems that can sit in a school or village, for example, and turn that water into drinking water straight away.
So, in five years’ time, we hope to have a vast network of machines — not just in Malaysia, but potentially in Singapore, Thailand, and elsewhere. We still are looking for new partners to come on board.
This story is part of a series on finalists of The Liveability Challenge, an annual search for solutions backed by Temasek Foundation to make Southeast Asia’s cities cleaner, greener places to live and work. The launch of The Liveability Challenge 2021 will take place on 15 January.
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Vending Machine Business Plan: The Ultimate Guide
- 3 months ago
You’ve looked into the steps of starting a vending machine business, but you haven’t developed business plans. We’ll help you create a vending machine business plan.
Adam Hill has owned and operated Hill Vending since 2014, when he bought a $120 vending route. Now he’s making over $600K in annual sales. He’ll share vending machine tips so you know how to estimate vending machine profits and other costs.
We’ll explain everything you need to know to communicate your business plan. These vending machine business links will send you directly to the section of the blog you want to read:
What Is a Vending Machine Business Plan?
Why you need a vending business plan, how to buy vending machines, vending machine business plan template, executive summary, company analysis, vending machine industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, income statement, balance sheets, cash flow statement, how much are vending machines, how to start a vending machine business, how much does a vending machine make, what do i need to start a vending machine business, write your vending machine business plan.
A vending machine business plan provides a snapshot of where your business is, where it’s going, and how you will achieve the business goals over the next three to 10 years.
Vending business plans will include market research on the vending machine industry, local vending machine associations, a marketing plan, an operations plan, and a financial plan to provide a clear path of how you expect your vending machine company to make money and grow.
Your chances of starting a successful vending machine business double by writing and following a vending machine business plan. Plus, companies that follow their business plans grow nearly 30% faster and get more funding than those without a business plan.
Make sure to update your vending machine business plan annually as your company grows and achieves its goals.
The main ways to buy a vending machine business are personal savings, credit cards, private loans from the current business owner, bank loans, and angel investors.
One of the top ways to get into the vending machine industry is to buy an existing vending machine business. Business owners will often agree to owner financing, where you pay 0-20% down and then pay off the remainder over one to five years.
Banks will want to review your vending machine business plan and decide whether they believe you can accomplish the goals you’ve included. More specifically, a loan officer will want to see a professional vending machine business plan to verify that your financial assumptions are reasonable.
Another way to fund a vending machine business is by taking a loan or equity deal from angel investors. An angel investor is just a wealthy individual who helps people start businesses in exchange for a share of the profits.
Learn more about buying a vending machine .
You’ll want a business plan template for your vending machine business. Download our free vending machine business plan template below.
You’ll also get our How to Start a Vending Machine Business PDF.
Check out our other business plan templates for more resources or watch our interview with a business owner who started one of the fastest growing franchises in North America to learn how he writes a business plan.
What Should I Include in a Vending Machine Startup Business Plan?
A business plan for a vending machine company should include:
- Competitor Analysis
- Vending Machine Marketing Plan
- Vending Machine Operations Plan
- Vending Machine Financial Plan
Keep reading to learn what vending machine operators should include in their business plans. We’ll also provide examples of what key parts of a vending machine business plan might look like.
Vending machine operators should start their business plan with an executive summary. All an executive summary does is summarize what the rest of the document is about.
The executive summary should be under a page long and should include a sentence or two about each section so that people can get the main points quickly.
This section of your vending machine business plan should include:
- An introduction to your company
- Your company’s mission and values
- The vending machine services you’ll offer
- Your competitive advantage
In your industry analysis, you need to provide an overview of the vending machine business. Your research will help you understand the market, improve your strategy to utilize market trends, and prove to readers you know what you’re talking about.
Your vending machine business plan should answer the following questions about the vending industry:
- How much do vending machines make a month? (Both as an industry and per machine)
- How much of the industry revenue is in the local market? Use the industry revenue multiplied by your location divided by the U.S. population.
- Is the market growing or shrinking?
- Who are the market leaders in the industry?
- Who are the primary vending machine manufacturers and suppliers of products?
- What vending machine business trends will impact the industry?
- What is the vending industry’s 5-10 year growth forecast?
I suggest using the IBIS World report we linked to earlier because it includes all the information about the U.S. vending machine market. You may need to purchase a local plan as well.
Industry Analysis Example
The vending machine industry makes $10 billion per year across 17,739 vending operators in the U.S. That means they make an average of $563,729 per year.
The average monthly revenue of a vending machine is approximately $2,000, which means a company needs 24 machines to earn the average across the industry.
The Las Vegas vending machine business market is approximately $69,343,972.03, and there are 99 vending machine operators , which means each vending machine operator is making approximately $140K per year more than the national average.
The market is expected to slightly decline in revenue, but companies that capitalize on existing trends like Apple Pay, Google Pay, and specialized vending machines are able to see growth by creating new markets in high-traffic areas.
According to ThomasNet , the major vending machine equipment manufacturers and suppliers are:
Adam suggested two manufacturers of vending machines he prefers to use.
In addition, snack foods and drinks are available from stores like:
- Coke distributors
- Pepsi distributors
- Other distributors
Your vending machine business plan should describe the target market you will be providing vending.
Your target market will impact the pricing and product options you carry. Make sure to understand the demographics of the customers in each type of facility you serve. You won’t want to offer the same vending machine products in a gas station as you would a cardiac wing in a hospital.
Analyze customer demographics. You’ll want to discuss the age, gender, location, and income levels of decision-makers, their customers, and where you want to place your vending machines .
You’ll also want to include psychographic profiles, meaning the details of your customers’ wants and needs. You wouldn’t want to offer all candy and soda in a yoga studio vending machine because the students will probably want water and healthier snack choices.
Your vending machine business plan should include a competitive analysis that shows your understanding of the direct and indirect competitors you will be competing with for your target customers.
Direct competitors are limited to vending machine operators in the local area, while indirect competitors are any type of business where your target customers can get the same products.
A vending machine business will have indirect competitors, including grocery stores, convenience stores, delivery apps, pharmacies, and fast food restaurants.
Not mentioning these vending machine competitors may show lenders that you don’t realize there are other places where someone can buy the same products even when in a rush.
You want to describe in greater detail the other vending machine businesses you’ll compete with. Your direct competitors will be other vending machine locations within a mile of your machine.
Create an analysis of each local vending machine company that answers the following:
- What locations does each business serve?
- What items do they sell in the vending machines?
- How do they price each item?
- What are the machine owners’ competitive advantages?
- What opportunities do they leave open?
After you’ve done this, you should be able to answer questions like:
- How can I provide superior products?
- What products can I offer that competitors do not?
- How can I create an excellent customer service culture?
- Can I beat their pricing?
Finding ways to provide better customer service at a similar or lower cost will provide a competitive advantage. Just make sure the pricing is correct for your vending machine business to be successful.
Have you ever heard of the 4Ps of marketing?
Every vending machine business should include them in its marketing plan.
This section of your vending machine business plan should remind the reader what type of vending machine business you are. Make sure to be specific about the products you’ll be offering in your vending machines. You’ll want to keep the product list consistent across vending machines.
You should have already analyzed how other vending machine businesses sell their products. Now it’s time to create your pricing guide. Adam suggests pricing the products at twice what you pay for them.
If you buy a 12-pack of soda from Sam’s Club for $12.99, then your vending machine company should be selling each can for $2.25 if the market will allow it. At the very least, factor in 50 cents profit per item.
Where will you be placing your vending machines? Document every location, the types of vending machines at the location, and how often you’ll need to check it.
You should also explain why each location is a good spot for a vending machine in your vending machine business plan. Learn more about vending machine placement .
The promotion section of a vending machine marketing plan documents how you will help people find your vending machine company and the locations where you have placed a vending machine.
Some promotional methods you might use for a vending machine company include:
- A vending machine website
- Adding your branding to your vehicle
- Creating brochures for business owners
- Focusing on vending machine experience and user experience (UX)
- Keeping your vending machines clean and branding them to help people recognize your brand
- Placing vending machines in strategic locations
- Providing maps that show where your vending machine business is located
- Sharing cool features of your vending machines on social media
You could also create a course to help other people learn how to start a vending machine business. That’s one of the ways that Adam has built upon his vending machine business. Check out our free vending machine training .
An operations plan is part of your vending machine business plan that explains your daily operations. Your operations plan should include two sections:
- Long-term goals
- Processes for operational excellence
What milestones do you want to achieve in your vending machine company?
Your long-term goals might include the number of machines you want by a certain date, when you want to hire employees, and how much revenue you want within five years.
Make sure to add these details to your vending machine business plan.
Processes for Your Vending Machine Business
Your processes are the steps you will take during the day to keep your vending machine business running smoothly. Your main tasks will include:
- Buy vending machine products
- Store vending machine products
- Deliver machines
- Restock vending machines
- Clean vending machines
- Buy new vending machines
- Secure contracts for vending machine placement
- Buy vending machine routes
- Provide customer service
You should also include your management team and business structure in your vending machine business plan. Planning for a team shows that you have thought through starting a vending machine business and realize that you can’t do everything.
While vending machine businesses are typically able to be run by a single person, that doesn’t mean you won’t need help from other professionals including:
- Vending Machine Repair Person
- Sales and Marketing
Hiring people to manage portions of the company you don’t understand will make starting a vending machine business much easier. Emphasize how your leadership team is going to make you more successful by touting their past experience.
Direct experience in the vending machine business is best, but if your team has experience in other areas that are related, it works well, too. An advisory board familiar with vending machines is also an option.
When you own vending machine business assets, you need a financial plan. Your financial plan should cover one to five years from your vending machine business starting.
Three financial statements should be included with your business plan:
- Income statement
- Balance sheet
- Cash flow statement
A Profit and Loss statement, P&L, or income statement shows your revenues and expenses to show how much money you made or lost.
You’ll have to make some assumptions when you create an income statement. Vending machine owners will need to make and document assumptions that answer the following:
- How many products will you serve?
- What will inflation be?
- How much will revenue grow each year? How?
Example Vending Machines Income Statement
Let’s assume the following:
- We bought 10 vending machines for $20,000 with $0 down and one year to pay $25K.
- Revenue is $2K/month per machine .
- Gross margins are 50% .
- Taxes are 20% .
- Marketing costs $1,000 annually .
Note: EBITDA = Earnings before interest, tax, depreciation, and amortization
Balance sheets are used to compare your assets and liabilities. Your balance sheet will show five sections:
- Current Assets: Cash and items that can be turned into cash within a year, including accounts receivable, inventory, prepaid expenses, and marketable securities.
- Long-Term Assets: Items that cannot be sold fast, like land, patents, brands, trademarks, goodwill, and vending machine equipment.
- Current Liabilities: Any debt due within a year, including accounts payable, debt financing, payroll, rent, utilities, and other accrued expenses.
- Long-Term Liabilities: Any debts that last longer than a year, including bonds payable, deferred taxes, leases, loans, and pensions
- Shareholder Equity: Shares, reserves, and retained earnings are all parts of owners’ equity
Effectively, you are aiming to balance the equation:
Current Assets + Long Term Assets = Current Liabilities + Long-Term Liabilities + Shareholder Equity
Learn more about balance sheets .
Your cash flow statement shows how much money you need in your business bank account to cover startup costs and operating expenses until you are fully self-sustaining.
Your cash flow statement adjusts the net income to add:
- Decreases in accounts payable
- Increases in taxes payable
- Increases in accounts receivable
Then you’ll want to subtract the cost of any inventory to get the cash from operations. You’ll also want line items for any investment or financing you need for the following items:
- Cost of equipment like vending machines, refrigerated delivery trucks, etc.
- Cost of maintaining an adequate amount of inventory
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
The final part of your vending machine business plan should be an appendix that includes all the supporting documentation for your business plan. You’ll want to include tables, links, and citations so that anyone reviewing your vending machine business plan can verify your facts.
For the sake of brevity, in this Example Appendix, I am only including the formula I used for the Las Vegas Vending Machine Industry calculation.
Vending Machine Business FAQs
Buying a vending machine will cost anywhere from $100 for a small candy vending machine to a few thousand dollars for new and used drink or snack machines. The custom vending machine cost can reach $20,000.
Starting a vending machine business requires:
- Establishing if the vending machine business will be profitable
- Creating financial projections
- Writing a vending machine business plan
- Forming your vending machine business
- Buying a vending machine
- Getting products to fill your vending machine
- Finding a location for your vending machine
- Storing vending machine products
- Maintaining vending machines
- Restocking and collecting money from your vending machine investment
According to Adam, most vending machines make around $2,000 per month if they are in good locations.
Market research may show that other vending machines can have even better results, but use $2,000 a month per machine in financial projections for your business plan unless you can document that your machines will have better returns.
Of the $2,000, approximately 30% should be profits or wages.
The vending machine business model normally requires a:
- Vending machine
- Business license and LLC
- Location for the vending machine
- Way to handle refunds
Whether you decide to offer ice cream vending machines, coffee vending machines, or bulk vending machines, a vending machines business plan will help you make the most out of your new venture.
If you haven’t already, don’t forget to download your free business plan.
What will be your vending machines business model?
Brandon Boushy lives to improve people’s lives by helping them become successful entrepreneurs. His journey started nearly 30 years ago. He consistently excelled at everything he did, but preferred to make the rules rather than follow him. His exploration of self and knowledge has helped him to get an engineering degree, MBA, and countless certifications. When freelancing and rideshare came onto the scene, he recognized the opportunity to play by his own rules. Since 2017, he has helped businesses across all industries achieve more with his research, writing, and marketing strategies. Since 2021, he has been the Lead Writer for UpFlip where he has published over 170 articles on small business success.
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Vending Machine Business Plan Template
Vending machine business plan.
You’ve come to the right place to create your vending machine business plan.
We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their vending machine companies.
Below is a template to help you create each section of your Vending Machine business plan.
Healthy Snacks Vending is a startup vending machine company based in the city of Buckeye, Arizona, a growing Phoenix suburb. The company is founded by Chris Garcia, a recent University of Arizona graduate with a Bachelor’s degree in Marketing and Sales. Now that Chris has obtained his degree, he is equipped with the skills and know-how to start his new company, Healthy Snacks Vending. Chris is confident that his ability to effectively communicate the value of his company and network with proprietors will ensure his new vending machine business will be a profitable venture.
As its name implies, Healthy Snacks Vending will stock healthy options in its vending machines. Chris will target several proprietors in a new commercial development that has just been built in a growing area of town. New developments include an array of corporate offices, a high school, a hospital, and several retail establishments.
The following are some of the healthy snack products that Healthy Snacks Vending will carry:
- Bottled Water
- Fruit Juice
- Fresh Fruit
- Granola Bars
- Cereal Bars
- Nuts and Seeds
Healthy Snacks Vending will target all proprietors in the new Buckeye commercial development. It will target the owners of the commercial buildings as well as the school and the hospital. Healthy Snacks Vending’s end-users will be people in the area looking for a healthy alternative to traditional vending machine options (e.g., soda, candy, and chips).
Healthy Snacks Vending will be owned and operated by Chris Garcia. Chris is a University of Arizona graduate with a Bachelor’s degree in Marketing and Sales. Chris has most recently been working as a manager in a local convenience store while pursuing his degree. He has over ten years of experience in the retail industry, working his way up from a sales associate to manager in the first two years. Chris is confident that his skills in management, communications, marketing, and sales will help him establish himself as a successful vending machine owner/operator. Chris will handle all marketing and sales for the company as well as manage the relationships and contracts with business proprietors, source and purchase the vending machines, and continually seek out opportunities for new locations to place vending machines.
Chris has recruited fellow University of Arizona graduate, Stephen Smith, to manage the vending machine inventory. Stephen has a Bachelor’s degree in Business Administration and is skilled in purchasing, budgeting, and controlling inventory. Chris relies on Stephen’s ability to source the most cost effective healthy snack products as well as his ability to ensure there is the right amount and mix of products available to ensure profitability.
Healthy Snacks Vending will be able to achieve success by offering the following competitive advantages:
- First-mover advantage in this new Buckeye development. There are currently no other vending machines in or near these recently built establishments.
- Healthy snack options will be offered, giving people a healthier option over typical vending machine snacks.
- Healthy Snacks Vending is investing in new vending machines that will take multiple forms of payment including credit cards, debit cards, and contactless payment options to give people more flexibility in the way they can pay.
Healthy Snacks Vending is seeking $100,000 in debt financing to launch its vending machine business. The funding will be dedicated towards purchasing the initial vending machines and inventory. Funding will also be dedicated towards three months of overhead costs to include payroll, sales, and marketing costs. The breakout of the funding is below:
- Vending machines: $50,000
- Inventory: $10,000
- Three months of overhead expenses (payroll, sales, and marketing): $30,000
- Working capital: $10,000
Who is healthy snacks vending .
Healthy Snacks Vending is a startup vending machine company based in the city of Buckeye, Arizona. The company is founded by Chris Garcia, a recent University of Arizona graduate with a Bachelor’s degree in Marketing and Sales. Chris is confident that his ability to effectively communicate the value of his company and network with proprietors will ensure his new vending machine business will be a profitable venture.
Healthy Snacks Vending will stock healthy options in its vending machines. Chris will target all proprietors in a new commercial development that has just been built in a growing area of town. New establishments include an array of corporate offices, a high school, a hospital, and several retail stores.
Healthy Snacks Vending History
Healthy Snacks Vending is a new vending machines business that will be owned and operated by Chris Garcia. Chris is a University of Arizona graduate with a Bachelor’s degree in Marketing and Sales. Chris has most recently been working as a manager in a local convenience store while pursuing his degree. He has over ten years of experience in the retail industry, working his way up from a sales associate to manager in the first two years. Chris is confident that his skills in management, communications, marketing, and sales will help him establish himself as a successful vending machine owner/operator.
Since incorporation, Healthy Snacks Vending has achieved the following milestones:
- Registered Healthy Snacks Vending, LLC to transact business in the state of Arizona.
- Reached out to multiple proprietors in the area to initiate the process of negotiating contracts to put vending machines in their buildings.
- Has secured contracts with two proprietors.
- Recruited Stephen Smith to be the Inventory Manager and Kim Miller to be the Accountant.
Healthy Snacks Vending Services
The following are some of the healthy snacks that Healthy Snacks Vending will provide:
The U.S. Vending Machine Operators industry is a $8.9B market in 2022 and is expected to increase by 3.5% this year. Rising per capita disposable income and increased consumer spending have helped drive industry growth.
The primary challenge for industry operators is high competition. If there are multiple vending machines in a small area, a company’s ability to differentiate its products, pricing, or payment options will be the key to success.
Changes in consumer behavior have posed a challenge for many industry operators. A growing number of consumers are seeking healthier snack choices. For this reason, vending machines that offer junk food items are seeing less revenue than those offering healthy alternatives. Additionally, less consumers are carrying cash, while a growing number prefer contactless payment options. New vending machines that take card and contactless forms of payment are likely to bring in more revenue for industry operators than cash-based machines.
Demographic profile of target market.
Healthy Snacks Vending will target proprietors in a new commercial development that has just been built in Buckeye, Arizona. Establishments in the area include an array of corporate offices, a high school, a hospital, and several retail stores.
Healthy Snacks Vending’s end-users will be people in the area looking for a healthy alternative to traditional vending machine options (e.g., soda, candy, and chips).
The precise demographics for Buckeye, Arizona are:
Healthy Snacks Vending will primarily target the following customer profiles:
- Proprietors of businesses in the area
- Staff and visitors of corporate offices, the hospital, and retail establishments
- Students, teachers, and administration staff at the school
Direct and indirect competitors.
Healthy Snacks Vending will face competition from other companies with similar business profiles. A description of each competitor company is below.
Snack Food Vending, LLC
Snack Food Vending, LLC is an established vending machine company that operates in Phoenix, Arizona and surrounding areas. Snack Food Vending, LLC provides a wide variety of snack options in vending machines throughout the region. Most of Snack Food Vending, LLC’s vending machines are located in busy retail locations, schools, and hotels. This vending machine company stocks traditional snacks and healthy snacks. Snacks include soda, water, candy, chips, apples, granola bars, gum, tea, fruit cups, and energy drinks. Most of Snack Food Vending, LLC’s machines have been in service for several years and are cash-based machines.
SNACKS! Vending is a Phoenix-based vending machine company that stocks healthy snack food options including applesauce, sandwiches, tea, water, crackers, and fresh fruit. SNACKS! Vending machines are primarily placed in areas around downtown Phoenix including hospitals, office parks, and shopping malls. SNACKS! Vending has established itself as the reliable source for healthy snack options in the city.
Healthy Eating Vending Machine Co.
Healthy Eating Vending Machines Co. offers a wide variety of healthy snacks for patrons on-the-go. Snacks include fresh fruit and vegetables, salads, sandwiches, juice, tea, water, and sunflower seeds. Healthy Eating Vending Machine Co. is a fairly new establishment with just a handful of machines placed in a few commercial locations in Buckeye, Arizona. This vending machine company offers premium healthy snacks at relatively higher prices than competitors.
Healthy Snacks Vending will be able to offer the following advantages over its competition:
- All Healthy Snack Vending machines will be the newest models, with multiple payment options including credit, debit, and contactless payment choices.
- Healthy Snack Vending will offer patrons a wide range of affordable, healthy alternatives to traditional junk food available in most vending machines.
- Healthy Snacks Vending will target all proprietors in the new commercial development in Buckeye, Arizona enabling the company to have the first vending machines placed in these buildings.
Brand & value proposition.
Healthy Snacks Vending will offer the unique value proposition to its customers:
- The only vending machines offering affordable, healthy snacks in the area.
- Multiple forms of payment accepted including credit, debit, and contactless pay for flexibility in payment options.
- Moderate pricing that is on par or slightly less than the competition.
The promotions strategy for Healthy Snacks Vending is as follows:
Word of Mouth/Referrals
Chris Garcia will leverage his effective communication and word of mouth marketing skills to create interest among local proprietors to get his vending machines placed in their buildings. He has already obtained commitments from two such proprietors who will spread the word to others.
Professional Associations and Networking
Healthy Snacks Vending will become a member of the local vending association and participate in industry events to network and build relationships with other industry professionals in the area.
Healthy Snacks Vending will invest in professionally designed print ads to display in local magazines, newspapers, and direct mailers targeting local business owners that could benefit from putting a vending machine with healthy snacks in their establishments.
Website/Social Media Marketing
Healthy Snacks Vending will create and maintain an informative website that will list the products that Healthy Snacks Vending is able to provide and the locations of its vending machines. The website will also list their contact information for proprietors that may be interested in putting a Healthy Snacks Vending machine in their establishment.
In addition to the website, Healthy Snacks Vending will maintain an active social media presence on multiple channels including Facebook, Instagram, Twitter, YouTube, and TikTok to promote its business.
The pricing of Healthy Snacks Vending will be moderate and on par or slightly below that of competitors to ensure Healthy Snacks Vending won’t be overlooked as being too expensive if other vending machine operators place their machines nearby.
The following will be the operations plan for Healthy Snacks Vending.
- Chris Garcia will be the Owner and Marketing Director of the company. He will oversee all marketing and sales efforts as well as manage all contracts and client relations. Chris has spent the past year recruiting the following staff:
- Stephen Smith – Inventory Manager who will source, purchase, and stock all vending machine inventory.
- Kim Miller – Accountant/Bookkeeper who will provide all client accounting, tax payments, and monthly financial reporting for the company.
Healthy Snacks Vending will have the following milestones complete in the next six months.
7/1/2022 – Finalize contracts with two initial proprietors to place vending machines in their establishments.
7/15/2022 – Finalize personnel employment contracts for Stephen and Kim.
8/1/2022 – Purchase initial vending machines for the first two locations.
8/15/2022 – Install vending machines in the first two locations.
8/22/2022 – Source products and stock the vending machines.
Healthy Snacks Vending will be owned and operated by Chris Garcia. Chris is a University of Arizona graduate with a Bachelor’s degree in Marketing and Sales. Chris has most recently been working as a manager in a local convenience store while pursuing his degree. He has over ten years of experience in the retail industry, working his way up from a sales associate to manager in the first two years. Chris is confident that his skills in management, communications, marketing, and sales will help him establish himself as a successful vending machine owner/operator. Chris will handle all marketing and sales for the company as well as manage the relationships and contracts with business proprietors, source and purchase the vending machines, and continually seek out opportunities for new locations for his vending machines.
Chris has recruited fellow University of Arizona graduate, Stephen Smith, to manage the vending machine inventory. Stephen has a Bachelor’s degree in business administration and is skilled in sourcing and budgeting. Chris relies on Stephen’s ability to source the most cost effective healthy snack products and ensure there is the right amount and mix of products available to increase profitability.
Key revenue & costs.
The revenue driver for Healthy Snacks Vending is the payment received for each product purchased from one of its vending machines. Prices will range from $1.00-$5.00 per healthy snack item.
The cost drivers will be the fees paid to proprietors. Each proprietor contract will have its own fee schedule. However, in general, Healthy Snacks Vending will pay between 5%-15% of its revenue per vending machine to the proprietor. The expenses will be the payroll cost, vending machine maintenance cost, and marketing materials.
Funding Requirements and Use of Funds
- Inventory: $10,000
- Three months of overhead expenses (payroll, sales, and marketing): $30,000
- Working capital: $10,000
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Number of Vending Machines in Operation: 10
- Total Average Revenue from All Machines Per Month: $5,000
- Average Fees Paid to Proprietors Per Year: $6,000
Income statement, balance sheet, cash flow statement, vending machine business plan faqs, what is a vending machine business plan.
A vending machine business plan is a plan to start and/or grow your vending machine business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your vending machine business plan using our Vending Machine Business Plan Template here .
What are the Main Types of Vending Machines?
There are a number of different kinds of vending machines, some examples include: Candy Vending Machines, Snack Vending Machines, Ice Cream Vending Machines, Beverage Vending Machines, Coffee Vending Machines, Specialty Vending Machines, Custom Vending Machines, and Bulk Vending Machines.
How Do You Get Funding for Your Vending Machine Business Plan?
Vending Machines are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a Vending Machine Business?
Starting a vending machine business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
1. Develop A Vending Machine Business Plan – The first step in starting a business is to create a detailed vending machine business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure – It’s important to select an appropriate legal entity for your vending machine business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your vending machine business is in compliance with local laws.
3. Register Your Vending Machine Business – Once you have chosen a legal structure, the next step is to register your vending machine business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options – It’s likely that you’ll need some capital to start your vending machine business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location – Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees – There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Vending Machine Equipment & Supplies – In order to start your vending machine business, you’ll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business – Once you have all the necessary pieces in place, it’s time to start promoting and marketing your vending machine business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a successful vending machine business:
- How to Start a Vending Machine Business
Where can I get a Vending Machine Business Plan PDF?
You can download our example vending machine business plan PDF template here . This is a business plan template you can use in PDF format.
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Vending Machine Business Plan Template
Whether you want to start your own vending machine business or expand an existing one, you need a business plan. the following vending machine business plan template lets you know what elements you need to include in a successful vending machine business plan., fill the form to download business plan templates.
To ensure your vending machine business success in this highly competitive market, you need a properly structured vending machine business plan. With over 12 years of experience in business plan writing , we have helped over 5,000 entrepreneurs create business plans to start and grow their vending machine businesses. Using the following vending machine business plan template, you can put together an effective business plan.
Things to Know Before Writing a Vending Machine Business Plan?
Vending machine operators provide and service automated machines that sell snacks, soft drinks, cigarettes, newspapers, and other products.
In the five years to 2023, the Vending Machine Operators industry has experienced slight growth. Although there have been challenges, increased per capita disposable income and consumer spending have supported industry revenue during the period.
Thus,acording to IBIS-World over the five years to 2022, industry revenue is expected to increase by an annualized 0.8% to $10.2 billion, including an increase of 3.8% in 2022 alone.
Among the major products and services in this industry are
- Hot beverages
- Cold beverages
- Frozen products
- Food and snacks
- Other products
- Healthy item
Key Success Factors for Vending Machine Business
Despite the challenges of the Vending Machine industry, We have identified five factors that can help you boost profitability, efficiency, and ultimately success.
- Having exclusive rights to sell a particular popular product: If an operator can secure the sole right to sell a particular popular product at a particular location, demand is likely to be high.
- Transferable cost increases: Any cost increases from suppliers need to be passed on to consumers since profit makes up a small percentage of revenue. Customers generally accept small price increases for a well-stocked, reliable machine in a good location.
- Scale economies: Businesses that service and control many machines gain economies of scale by purchasing bulk products, which lowers their maintenance costs per unit.
- Scope economy: Companies with a wide variety of products in their vending machines are more likely to attract customers.
- Close proximity to key markets: Operators who are able to place vending machines close to many potential customers will likely generate more revenue.
- Easily accessible for clients: A vending machine that is conveniently located for customers will likely receive a higher volume of traffic and usage.
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What is a Vending Machine Business Plan?
A business plan for a vending machine business is a written document that sets your company’s financial goals and discusses how you’ll reach them.
A solid, comprehensive plan will serve as a road map for the next three to five years of the vending machine business. Any bank or investor you approach will require a vending machine business plan, so putting one together will be critical to securing funding.
In short, writing a business plan can help you succeed if you’re thinking of starting a vending machine business or pitching to investors or venture capitalists.
Why You Need a Vending Machine Business Plan
A business plan gives a picture of your vending machine as it currently stands and outlines your growth strategy for the following five years. It describes your company’s aims and plan for achieving them. Market research is also included to back up your goals.
A solid, detailed plan gives you a clear path to follow, forces you to examine the viability of a vending machine business idea, and may help you better understand your company’s finances and competition.
Vending machine business owners who have a business plan grow 30% faster than those who don’t, and 71% of fast-growing businesses have one.
A vending machine business plan is a living document that should be updated annually as your company grows and changes.
Funding Sources for Vending Machine Business
Here are some possible funding options for your vending machine business:
Entrepreneurs who wish to enter into the vending machine business might benefit greatly from short-term business financing. Lenders will normally consider your personal or company credit, the latter of which may need you to already be a business owner before entering into vending machines.
These criteria may restrict businesses without prior vending machine expertise from obtaining short-term loans. However, if you qualify, short-term business loans are a wonderful fit for this line of company.
Because vending machines classify as equipment, equipment financing may be a viable option for you to get capital for your business. The terms of these loans are determined by the worth of your equipment, which serves as collateral for the loan in the event that you default on your payments.
Personal and Business Credit Cards
Considering how inexpensive it is to acquire new or old vending machines compared to starting other types of small companies, using credit cards to fund your business is a viable option. Look into some of the best business credit cards for establishing a business to determine whether this is a viable option for you.
Looking to Build Credit for Your Vending Machine Business?
Build your business credit quickly with an easy approval net 30 account from Wise Business Plans. Or check out the top 10 net 30 vendors to find the best one for you to help build your business credit .
How to Write a Vending Machine Business Plan
To write a vending machine plan, you don’t need to be an expert. Our step-by-step guide will show you how to write a vending machine business plan, or you can just download our proven sample business plan pdf to get a better idea.
Vending Machine Business Plan PDF and Word
Download our vending machine business plan in PDF and Word here.
The executive summary is the most important part of the document since it outlines the whole business plan. Despite the fact that it appears first in the plan, write the executive summary last so you may condense key concepts from the other nine parts.
It’s a part that catches the investor’s eye and provides key information about your company’s overview and upcoming short- and long-term goals.
Tell them what kind of vending machine business you have and what stage you’re in; for example, are you a startup, do you have a vending business company that you want to expand, or do you have a lot of vending machine businesses?
Finally, an executive summary should provide investors with a preview of what they may expect from the rest of your document.
- Provide a high-level overview of the vending machine industry
- The name, location, and mission of your vending machine company
- A description of your vending machine business, including management, advisors, and a brief history
- Discuss the type of vending machine business you are operating, Give an overview of your target customers., and how your company differs from competitors in the industry
- Create a marketing plan that describes your company’s marketing strategies, sales, and partnership plans.
- And give an overview of your financial plan
Check out these executive summary examples to help you write a perfect one for your vending machine business plan.
Free: Executive Summary Examples
An executive summary is the most important part of your business plan, and it need not be challenging to write. This is why we have put together some awesome free Executive Summary examples for you.
- Company summary: Your company analysis will describe the type of vending machine business you are running and its future goals. The type of vending machine you might be focused on ( Groceries, Drinks, Snacks, Children’s toys, Beauty products and cosmetics, Fruits, Vegetables, Handkerchiefs, Towels, Flowers, etc)
- Company history: When and why did you start your vending machine business?
- What milestones have you achieved so far? Milestones might include sales goals achieved, new machine installations, and so on.
- Legal structure and ownership: Do you have S-Corp status? Is it an LLC ? A sole proprietorship ? Describe your legal structure.
- Mission statement: An overview of your vending machine company’s guiding principles. Learn how to write a perfect mission statement .
You need to include an overview of the vending machine in the industry analysis you performed before sitting down to write your vending machine business plan.
While this research may appear to be unnecessary, it helps you to build strategies that maximize business opportunities while lowering or avoiding the identified risk.
Furthermore, market research can improve your strategy, especially if it identifies market trends. For example, if there is a trend toward selling advertising on vending machines, make sure your strategy includes a variety of ad formats and sizes.
The third purpose for conducting market research is to demonstrate to readers that you are an industry expert.
Industry analysis can be presented as a 8-step process when written as part of a company’s business plan.
- Give a quick overview of the vending machine industry. Define the vending machine business in terms of size (in dollars), historical background, service region, and products.
- Examine previous trends and growth patterns in the vending machine industry.
- Identify the market’s major competitors.
- Age, gender, and general lifestyle of the targeted market
- Determine the factors that have an impact on the vending machine industry. These might include government regulatory rules and other businesses’ competitive activities.
- Using research data, the industry forecast expected growth over the next five to ten years. Predictions should be made for both the long and short term.
- Describe how your vending machine business intends to position itself in the industry. Concentrate on how your vending machine business can benefit from opportunities highlighted in the industry.
Free: Business Plan Examples
Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.
The first condition for a vending machine business is to identify its target customers clearly. Customers can be categorized into the following segments: Households, office buildings, Business People, Sports Men and Women, Students, Children, Adults, Tourists hotels,, correctional facilities, etc.
The customer analysis section is an important part of any vending machine business plan since it evaluates the consumer segments that your company serves. It identifies target customers, determines what those customers want, and then explains how the product will meet those requirements.
Customer analysis may be divided into two parts: psychosocial profiles (why your vending machine suits a customer’s lifestyle) and demographic profiles (descriptions of a customer’s demographic qualities).
With regards to demographics, include information about: When moving residential, the ages, genders, locations, and income levels of your customers. When targeting businesses, describe what kind of business, size, and location your target customers are.
The psychological profiles of your target clients reveal their wants and needs. The better you understand and identify these demands, the better your chances of attracting and retaining customers will be.
It is necessary to do a competitor analysis. Because you may use their data to define your goals, marketing plans, tactics, new product lines, pricing, and more.
4 Use competitor analysis to:
- Identify the strength and weakness of your vending machine business competition.
- Search for opportunities to distinguish your vending machine company from competitors.
- For setting your product’s price.
The first step in competitive analysis is to determine who your direct and indirect competitors are.
The direct competition consists of other vending machine businesses that offer essentially the same services or to the same people as you do.
Your indirect competitors are other options that customers have to purchase from you that aren’t direct competitors.
This includes grocery stores, pharmacies, and quick-service restaurants.
Once you’ve identified the competition, concentrate on the direct, head-to-head competitors, since they are the most threatening to your vending machine business— but keep an eye on the indirect competition as well, just in case.
Provide an overview of each direct competitor’s business and detail their strengths and weaknesses.
You will be able to position yourself competitively in the market if you perform proper competition research. Perform a SWOT Analysis to learn your competitors’ strengths, weaknesses, and competitive advantages in the following areas:
- Prices – Are they offer lower prices or more costly than you and other competitors, what value do buyers get for that price?
- Quality – Are they offer premium products, the perceived worth in the eyes of the customers
- Customer service – How they respond to their consumers, whether they treat them poorly or well, and the degrees of satisfaction customers show
- Reputation — The sum of everything mentioned above: their credibility, how loved the brand is, and the loyalty of their customers
The final section of your competitive analysis should include a list of your areas of competitive advantage. for example: Are you going to offer excellent customer service culture, highly competitive prices, reliable and easy to use payment option or Will you provide superior products?
Consider how you will outperform your competitors and include them in this portion of your vending machine business plan.
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Take advantage of our free SWOT analysis examples. Make your business future-proof by identifying your strengths, weaknesses, opportunities, and threats using this free SWOT Analysis Template.
Creating a marketing plan for a vending machine involves identifying the target demographic and finding products that suit their preferences.
As part of your marketing plan for a vending machine company, you should include:
Pricing and Product Strategy
Your vending machine business must offer products that are different from those of your competitors. Research what your competitors offer and how they price their vending machine products. Unique products identifies your vending machine business as the place to go for unique services and differentiates it from others.
Placing and Promotions
The position of your vending machine is referred to as place. Record your location and explain how it will affect your success. Is your vending machine, for example, in a high-traffic office building or gym? Discuss how your site may deliver a continuous stream of consumers.
Promoting your vending machine business is the final part of your marketing plan. In this step, you document how you will drive customers to purchase your vending machine business. A few marketing methods you could consider are:
- Give vending machines a unique look, so that they are easily identifiable to customers.
- Advertise on blogs and forums, as well as on social media sites like Twitter, Facebook, and LinkedIn to get the word out,
- Creating an online presence (listing all of the vending machines) using a basic website
- Join local vending machine associations for information on industry trends
- Offer discounts to customers on special days
- Advertise in local newspapers, TV and radio stations
- Listing the vending machine business in the yellow pages
- Use word-of-mouth marketing (referrals)
You should also think about your vending machine company’s Unique Selling Proposition (USP), which should explain why clients should choose you over other vending machine businesses. Ensure that your USP is reflected in your marketing.
Pro Tips: Learn how to create a marketing plan in a business plan by pros!
While the previous sections of your vending machine business plan described your goals, your operations plan discusses how you will achieve them.
An operations plan is helpful for investors, but it’s also helpful for you and employees because it pushes you to think about tactics and deadlines.
Your operations plan in a business plan should be divided into two individual parts, as seen below.
Daily short-term processes include all the tasks involved in operating your vending machine, including purchasing products, delivering and restocking, keeping the machines clean, etc.
Long-term goals are milestones you hope to reach. It may be the date when you expect to place your 5th vending machine or when you hope to reach $X in sales. Another example would be when you expect to hire your Xth employee or start a new location.
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When writing a vending machine business plan, the management section in a business plan ‘ outlines your management team, staff, resources, and how your business ownership is structured.
This part may be easily organized by dividing it into the following points:
Internal Management Team
External Management Resources
This section outlines your vending machine business’s legal structure. If your company is a sole proprietorship , it may simply be one phrase. It might be longer if your company is a partnership or a corporation . You should make it a point to clarify who owns what part of the business.
This section should not only outline who is on your management team but also how each person’s skill set and experiences will contribute to the growth of your vending machine business. Ideally, you and/or your team members have direct expertise in the vending machine business. If this is the case, highlight your experience and skills.
Think of these external management resources as your internal management team’s backup. Consider forming an advisory board if your team is lacking expertise and experience with vending machine business.
An advisory board would consist of 3 to 7 people who would serve as mentors to your vending machine company. They would assist in answering queries and providing strategic direction.
If necessary, search for advisory board members with expertise running vending machine.
Describe all of your company’s external professional advisers, such as accountants, bankers, attorneys, IT experts, business consultants, and/or business coaches.
The final topic to consider in the management area of your vending machine business plan is your human resource needs.
In your financial plan of a business plan , you should present a 5-year financial statement broken down monthly or quarterly for the first year, and then annually. Financial statements include your income statement, balance sheet, and cash flow statement.
A profit and loss statement is more commonly called an income statement. It shows your revenue and subtracts your expenses to determine whether you were profitable or not.
As you develop your income statement, you need to develop assumptions. Will you serve 70 customers per day or 150? Will sales grow by 3% or 15% per year? Your choice of assumptions will greatly impact your business’s financial forecasts. Conduct as much research as possible in order to ground your assumptions in reality.
Want to learn how to make an income statement? Download our free income statement templates to make a stunning one for you.
Free: Income Statement Template
Create a financial statement for your business by downloading our free income statement templates.
While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities.
The balance sheet shows your vending machine business’s net value at a specific point in time. It categorizes all of your company’s financial data into three categories:
- Assets: Tangible goods with the monetary worth that the company owns.
- Liabilities: Debt owing to a company’s creditor.
- Equity: The net difference when the total liabilities are subtracted from the total assets.
The equation that expresses the relationship between these financial data elements is Assets = Liabilities + Equity.
Create a pro forma balance sheet for your vending machine business plan that highlights the information in the income statement and cash flow projections. A balance sheet is normally prepared once a year by a company.
Balance sheets indicate your assets and liabilities, and while they contain a lot of information, they are simplified to highlight the most important things you need to know.
For example, spending $15,000 to build out your vending machine business will not result in instant revenues. Rather, it is an asset that should help you earn money for many years to come.
Similarly, if a bank sends you a check for $5,000, you do not have to pay it back right now. Rather, that is a liability that you will repay over time.
Want to learn how to make an balance sheet? Download our free balance sheet templates to make a beautiful balance sheet template .
Cash Flow Statement:
Your cash flow statement will help you determine how much money you need to start or grow your vending machine business. In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a vending machine business:
- Fees for registering a business
- Equipment costs, such as vending machines, refrigerated delivery trucks, etc.
- Costs associated with sufficient inventory management
- Business insurance costs
- Costs of obtaining licenses and permits as well as accounting services (software, P.O.S. machines, and other software)
- Insurance coverage (general liability, workers’ compensation, and property casualty) at a total premium
- Operational costs for the first 3 months (salaries of employees, bills, etc.)
- Start-up inventory costs
Free: Balance Sheet Template
Create a financial statement for your business by downloading our free balance sheet templates.
List any additional material you cannot include elsewhere, such as resumes from key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts, and personal and business credit histories.
Attach your full financial projections along with any supporting documents that make your plan more compelling in the appendix.
Bonus Tip : Find out what to include in a business plan appendix when writing a vending machine business plan.
Summary of the Vending Machine Business Plan
A vending machine business plan is a worthwhile investment. As long as you follow the template above, you will become an expert in no time. By following the template, you will understand the vending machine business, your competition, and your customers. The plan will help you understand the steps necessary to launch and grow your vending machine business.
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How to Start and Finance a Vending Machine Business in 2024
- The vending machine industry is booming and expected to reach over $25 billion value by 2027, according to Allied Market Research.
- Vending machine businesses have low startup costs and can be highly profitable if managed effectively.
- You don’t need to have the funding saved up and may qualify for small business loans or business credit cards for a vending machine business.
- Learn what a vending machine business is, the types you can run, the pros and cons, how to get into the vending machine business, and what funding is best for this type of small business in this article from Nav’s experts.
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What Is a Vending Machine Business?
A vending machine company is run by a business owner, often called a vending machine operator. The vending machine operator purchases one or more vending machines, scouts out locations to place them, negotiates with property owners, and maintains the stock inside of the machines themselves. The operator doesn’t always restock the machines themselves; they may hire employees for that, but it depends on the scale of the vending business.
A successful vending machine business depends on your goals. You may not want to go full-time. Owning a vending machine business can also be a lucrative side hustle. Small business loans and credit cards can help with upfront costs, but the initial vending machine costs don’t have to be huge. You can choose refurbished equipment and start with a single machine to keep costs reasonable.
Types of Vending Machine Businesses
You don’t have to sell soda if you don’t want to — you have options. Although drink machine sales still tend to be the most profitable , there are countless kinds of vending machine businesses you can run. Here are the four main categories of vending machine businesses:
- Food and beverage vending
- Franchised vending
It’s important to research the hurdles of each type of business before you decide which route you want to go. Choosing one kind and sticking to it in the beginning can make ramping up your business easier and decrease how much you have to learn as you go. What you choose to sell will impact the type of machine you buy, as some products need refrigeration and electricity while others only need a quarter and a turn.
We go into more detail about each vending machine business type in the next section.
Vending Machine Business Ideas
The type of machine business you choose should be easy for you to manage, sell well in your area, and fit within your budget. Feel free to use your imagination. For example, the company SouveNEAR brings locally made gifts to airports and travel hubs that customers can purchase out of vending machines while they’re on the go. Keep in mind that inventory costs money, so make sure you can afford to restock.
Snacks, food, or beverage vending
Many vending machines sell drinks or food. For beverage vending machines, you can choose to partner with and sell a specific brand, like Coca-Cola. Or you can stock it with what you want to sell. It’s best to choose drinks only or snacks only in the beginning to limit the amount of education you need from the start.
With food or snack vending machines, you also have options on what you can sell. For example, placing a healthy snacks vending machine in a private gym might be a success. As long as you do your market research and place the machine in the right location, it has a good chance of creating income.
Bulk vending is often the most affordable type of vending to get into since you’re selling nonperishable items like small toys, stickers, or gumballs. You don’t need to worry about keeping your stock refrigerated. And many bulk vending machines only need the customer to put in a quarter and turn the knob, so you also may not have to worry about electricity. These machines are typically cheaper to buy and stock than other options, as well.
Specialty vending machines run the gamut. You can sell anything from local gifts to portable electronics to laundry products (placed in laundromats or dorms). Selling coffee and hot chocolate from a hot beverage vending machine is another option. These types of vending products may be more complicated if you’re new at running a vending machine business, but that doesn’t mean it’s impossible.
Get into a franchise
If you’d prefer more support and training than starting your own business, you can look into franchising a vending machine business. You’ll be able to take a business model that works and run with it rather than starting from scratch. However, keep in mind that you’ll have to pay part of your income to the franchiser, which may not make the higher support worth it.
Pros and Cons of Owning a Vending Business
There are positives and negatives to starting any business. Here’s a breakdown of what to think about before starting your own vending machine business.
- Low startup and overhead costs
- Potential for high profit
- Doesn’t need to require a lot of time
- Can be passive income
- Takes quite a few machines to become highly profitable
- Requires you to track stock
- The machines may require maintenance
- Have to consider vandalism and theft
How Profitable Is Owning a Vending Machine?
Your profit margin per vending machine will depend on the type of machine, the cost of your inventory, and the vending machine location. A good location and a desirable product that fits into your budget make it more likely that you’ll be successful.
Your overall profits depend on how many machines you operate. You typically need quite a few machines to be able to take this business full time. Owning a vending machine business is not a get-rich-quick scheme. Each machine brings in between $5 and $100 per week , on average. You might only be making $20 per month on a single vending machine, but remember that it’s passive income. If your business has many vending machines, you’ll have a lot more work on your plate — but also the potential to make up to $400 per month on average on every one.
How Much Is a Vending Machine Business?
The cost of starting a vending machine business can vary widely depending on several factors, including the type and number of machines, the products you plan to sell, the location of the machines, and other related expenses. Here are some key components to consider when estimating the cost of a vending machine business:
- Initial investment : Your initial investment covers the cost of purchasing the vending machines themselves. The price of each machine can range from a few hundred to a few thousand dollars, depending on the type and features.
- Inventory : You’ll need to stock your vending machines with products. The cost of inventory will depend on the type and quantity of items you plan to sell. It’s essential to choose popular and high-demand products to help with steady sales.
- Location fees : If you’re placing your vending machines in high-traffic areas, you may need to pay location fees or commissions to the business or property owner. These fees can vary and may be a fixed monthly amount or a percentage of your sales.
- Maintenance and repairs : Vending machines require regular maintenance, occasional repairs, and restocking. You’ll need to budget for ongoing maintenance costs to keep your machines in working order.
- Transportation and installation : Depending on the size and weight of the vending machines, you may need to pay for transportation and installation at each location.
- Permits and licenses : Some regions may require specific permits and licenses to operate vending machines. The cost and requirements can differ depending on your location.
- Insurance : It’s a good idea to have insurance coverage for your vending machines and business operations to protect against potential liabilities.
- Marketing and promotions : To attract customers and boost sales, you might need to invest in marketing and promotional efforts.
As you can see, the cost of starting a vending machine business can range from a few thousand to tens of thousands of dollars, or even more, depending on the scale and complexity of your venture. Before starting, you’ll want to create a detailed business plan and budget to understand the initial investment and ongoing expenses better.
How Do You Fund a Vending Machine Business?
The method you choose to fund your vending machine business depends on your personal circumstances and the type of machines you want to operate. If you have savings, you might be able to fund a standard machine from your own money. For mechanical machines, you’ll spend an average of $2,000 to $3,000, while an electronic machine will usually cost more than $3,000. You can often find refurbished machines for less than that, too.
If you don’t have savings, however, you can still start a vending machine business. There are business credit cards and small business loans that you may qualify for to fund your vending machine startup or expansion costs.
How to Buy a Vending Machine Business
You might prefer to buy an existing vending machine business — which can be a great way to enter the world of entrepreneurship with an established and potentially profitable venture. Here are the steps you’ll want to follow.
- Research the market : Start by researching the vending machine industry in your target area. Understand the demand for vending services, popular products, and the competition. Analyze the different types of vending machines and their profitability.
- Determine your budget : Set your budget for buying a business. Consider not only the purchase price but also the additional funds required for inventory, machine maintenance, and any potential renovations or improvements.
- Identify businesses for sale : Look for vending machine businesses that are listed for sale. You can explore online marketplaces, business brokerage websites, classified ads, or even local business associations.
- Evaluate the business : Once you find potential vending machine businesses for sale, look at them closely. Request financial records, including income statements and cash flow reports, to assess the business’s profitability. Evaluate the condition of the machines, their age, and any ongoing contracts with locations.
- Do your due diligence : Conduct a comprehensive due diligence process. This involves checking the business’s legal status, any outstanding debts or liabilities, and verifying the seller’s claims about the business’s performance. You may want to involve a business attorney and an accountant to assist you in this process.
- Negotiate the deal : If you’re satisfied with the business’s performance and potential, it’s time to negotiate the terms of the sale with the seller. Be prepared to discuss the purchase price, payment terms, and any other relevant details.
- Get funding : Determine how you’ll finance the purchase. You might use personal savings, secure a business loan, or use a business credit card. See your personalized funding options based on your business’s details — only with Nav .
- Finalize the purchase : Once you agree on the terms, finalize the purchase through a written agreement or contract. It should detail all aspects of the transaction, including the transfer of assets, warranties, and any non-compete clauses.
- Transfer ownership : Complete all necessary paperwork to transfer the ownership of the vending machine business legally. This may include registering the business under your name and obtaining any required licenses or permits.
- Training and transition : Work with the seller to ensure a smooth transition. Understand how the machines operate, learn about existing supplier relationships, and familiarize yourself with the locations where the machines are placed.
- Promote and expand : After taking over the business, focus on promoting it to attract more customers and identify opportunities for expansion. Consider adding new products, exploring new locations, or making upgrades to improve efficiency.
Remember that buying a vending machine business is a significant investment, so take your time to research, evaluate, and make an informed decision. Seek professional advice when needed to ensure a successful purchase and smooth transition into the vending machine business.
Are Credit Cards a Viable Option for Financing a Vending Machine Business?
Yes. You can use business credit cards to fund a vending machine business. Because the price of a single vending machine is relatively low, the credit limit on business credit cards can often cover the cost. You may even be able to get a credit card with a limit high enough to cover multiple machines at once.
Your credit limit depends on factors like your personal credit score, however, so make sure to check yours before applying.
Best Business Credit Cards for Vending Machine Owners
Here are some of the best credit card options for your vending machine business. Work with Nav to get personalized card recommendations based on the details you enter securely about your business. The more information you provide, the better your recommendations.
Can You Get a Small Business Loan to Buy a Vending Machine?
Business loans are another option when you’re looking to fund your vending machine business. Typically, business loans are used for larger purchases, but you may be able to qualify for a loan if you want to purchase multiple vending machines at one time.
Here’s a shortlist of items you’ll need before you apply:
- Your business’s details, like your business name, business address, an employer identification number or federal tax ID number, and formation documents
- A business bank account , along with bank statements proving revenue
- A business plan
- Business license
It is usually difficult for a brand-new business to get a traditional bank loan, but there are alternative lenders (see the list below) that require only six months to one year in business.
Some lenders also look at your business credit. Learn how to establish business credit in this guide from Nav.
Can You Get a Loan to Start a Vending Machine Business?
Here are some of the best small business loan options to use to launch or upgrade your vending machine business.
Do I Need a Vending Machine Business Plan to Get Funding?
Yes, having a vending machine business plan is often essential if you’re seeking funding from investors, lenders, or financial institutions. A well-prepared business plan serves as a roadmap for your venture and demonstrates to potential investors that you have a clear vision and a solid understanding of how to make the business successful.
A business plan outlines your business model, target market, competitive analysis, and financial projections. It helps investors understand the viability of your vending machine business and its potential for profitability. It also shows financial projections, which provide insight into how you plan to use the funds, when the business is expected to become profitable, and the potential return on investment (ROI) for investors.
Additionally, your business plan should address potential risks and challenges to demonstrate that you have thoroughly analyzed the industry and are prepared to navigate uncertainties. This builds credibility and shows that you have thought through all aspects of the business, which can instill confidence in potential investors that you are a responsible and capable business owner.
Furthermore, even if you don’t need external funding, a business plan is beneficial as it serves as a roadmap for your business operations, guiding you through your goals and strategies.
What to Know Before Buying a Vending Machine
Before diving into your own vending machine business, there are a few things you need to understand. You’ll need to research local regulations to see how to remain compliant. You’re technically a vendor, so check with your local Chamber of Commerce to learn how your state regulates vendors. You’ll probably need to obtain a vending machine license — and one for each machine. This shouldn’t be a dealbreaker because they’re inexpensive and relatively easy to get, but it is one more to-do item on your list. You’ll want to make sure you have your machines licensed so you are operating legally. Additionally, your machine must follow ADA standards, so make sure the machines you buy are accessible to all.
Also, you’ll likely pay sales tax on everything you sell. The amount of sales tax you’ll owe will depend on your location, but it can eat into your profits.
Finally, you’ll usually pay part of your commission to the person or company that owns the property or properties you choose for your vending machine location. The property owner wants to get something in return for allowing you to use their property, as well as cover any electricity costs that add up from your machine. Expect to pay 10% to 25% of your profits to the property owner.
Should I Purchase a New or Used Vending Machine for My Small Business?
Buying a vending machine is daunting. Whether or not you might choose a refurbished machine or a new machine depends largely on which stage your business is in. Used vending machines are a good place to start for new businesses. You’ll decrease your investment, and therefore your risk, because refurbished machines cost less. They may or may not require fixes before you use them, so be sure to inspect it carefully and ask for demonstrations from the vendor.
Meanwhile, experienced vending machine business owners might choose a new machine if they have access to the capital. New vending machines are more expensive but will probably require less frequent maintenance.
Where Can I Find Vending Machines for Sale?
There are several places where you can find vending machines for sale, both new and used. Here are some options to consider:
Online vending machine retailers
Several websites specialize in selling vending machines. They offer a wide range of options, from snack and beverage machines to specialty machines for specific products. Some popular online retailers include:
Vending machine manufacturers
Reach out to vending machine manufacturers directly, as many of them also sell machines to individual buyers. Some well-known vending machine manufacturers include:
- Seaga Manufacturing, Inc.
- Royal Vendors
- AMS Vending
Business auctions and liquidation sales
Keep an eye on local business auctions or liquidation sales, as vending machines may be available at discounted prices when companies close or upgrade their equipment.
Classified ads and marketplaces
Check online classified ads platforms like Craigslist, Facebook Marketplace, or eBay for individuals or businesses selling vending machines in your area.
Vending machine distributors
Look for vending machine distributors in your region. They often have a selection of machines available for purchase and can also provide guidance and support for your vending machine business.
Local suppliers and repair shops
Some local suppliers or repair shops that service vending machines may have used machines available for sale.
Networking with other vending machine operators
Connect with other vending machine operators in your area through industry events, trade shows, or online forums. They may know of opportunities to buy machines from businesses looking to exit the vending industry.
Questions to Ask Before Buying a Vending Machine
You might be brand new to buying something like a vending machine and aren’t really sure where to start. Here are the questions you’ll likely need to ask when starting a vending machine business:
- What kind of machine do I need? Once you decide what you want to sell, that will help guide you toward the type of machine you need. Beverages need refrigeration, while snacks may not, for example.
- What’s my budget? Consider new vs. used, as well as whether you need a card reader. Think about whether or not you need a card reader (and its associated fees) for customer convenience.
- Where do I buy a vending machine? As always, the internet comes in handy. Search for manufacturers or wholesalers for new machines or for secondary market sellers (or even on Craigslist or eBay) for used machines.
- Do I need to store it? Factor storage costs into your budget if necessary.
- Where will I get my inventory? Make sure you have a plan for where and how you’ll get the products to restock your vending machines.
- Who will stock the machines? Figure out whether you’ll restock your machines yourself or you need to hire someone to take care of that work. Calculate any payroll into your budget.
Where to Find a Vending Machine Business for Sale
Sometimes it’s easier to buy a business that already exists. If you want to start a vending machine business and are looking for one to buy, there are a few places to check. First, you can look online on websites that sell businesses or business listings. There, you might find vending machine businesses that are up for sale.
You can also ask around in your local community — sometimes people put up signs or share information about businesses they want to sell. Learn more in our complete guide to buying an existing business .
How to Approach a Vending Machine Business Owner to Purchase
If you want to buy a vending machine business and talk to the owner, here’s a friendly way to do it:
- Be polite: Start by saying hello. You can say something like, “Hi, my name is [Your Name], and I’m interested in your vending machine business.”
- Ask questions: Ask questions about the business, like how it works. You can say, “I’m curious about your vending machines. Can you tell me more about how everything works?”
- Share your interest: Let them know why you’re interested. Maybe you love the idea of having your snacks in the machines or think it could be a fun business to run.
- Ask if they’re open to selling: If the conversation is going well, you can ask if they’re open to selling the business. You can say, “I’m thinking about starting my vending machine business. Would you be open to selling yours?”
- Thank them: Whatever they say, thank them for their time and information. You can say, “Thank you for telling me more about your business. I appreciate it!”
Remember, it’s essential to be open and honest about your intentions when you’re approaching someone about their business.
Scouting Locations for Your Vending Machine
When figuring out potential locations for where to put your vending machine, look at foot traffic. High-traffic areas like airports or train stations are more likely to be successful than locations that don’t get as many people walking by. These locations may be more difficult to get into, but it could be worth trying.
You’ll also want to consider what you’re selling. If you’re selling bulk items like small toys, outside of grocery stores and convenience stores could be a good spot since children often accompany parents to these places. On the other hand, if you’re selling hot coffee, looking into office buildings and motels might be a good idea. Get creative with your location scouting and don’t be afraid to pitch your vending machine to the property owner.
Additionally, consider the safety of your location. Vandalism and theft are issues for vending machines since they are often left out in the open, so try to make sure the spot is well lit and in a populated area. You could even choose to place your machines inside of buildings that are locked at night if vandalism is a big concern.
Common (and Uncommon) Places to Put a Vending Machine
Vending machines can be placed in various locations where people frequent or need quick access to products. Here are some common and uncommon places to put a vending machine:
Some common places include:
- Office buildings
- Schools and universities
- Airports and transit stations
- Shopping malls
- Hospitals and medical facilities
- Fitness centers and gyms
- Recreation centers and parks
- Hotels and motels
On the other hand, here are some less common places to think about putting your vending machine:
- Restaurants (for employee use)
- Health food stores
- Auto repair shops
- Co-working spaces
- Manufacturing facilities
- Inside trains
When choosing a location for your vending machine, consider foot traffic, target audience, and the products you plan to sell. Get permission from the property owner or manager before placing your machine in any location. Additionally, ensure the area is safe and secure to protect your investment and provide a positive experience for customers.
Stocking and Replenishing Inventory
Keeping up with your inventory is essential for your business’s success, so come up with a plan to track it. Rather than personally driving around to each of your vending machines (which would take a lot of time), you can use inventory management software to stay on top of your restocking needs. Then you’ll know when you need to go back and replenish your inventory — and you’re never losing out on a potential sale. There are also specific vending management systems that are worth looking into since they specialize in vending machines.
You may want to hire employees to do the physical restocking for you, or you may be happy to do the work yourself (at least while it’s manageable).
Legal Considerations When Considering a Vending Machine Business
Starting a vending machine business involves several legal considerations to maintain compliance with regulations, as well as to protect both the business owner and customers. Here are key legal aspects to consider:
Business registration and licensing
Before launching a vending machine business, it’s essential to register the business with the appropriate authorities. This includes getting the necessary licenses and permits to operate vending machines in specific locations. The requirements may vary based on the city, state, or country, so thorough research is crucial.
If you’re placing vending machines in locations owned by others (like businesses or public spaces), you’ll need to write up a legal agreement. These contracts outline the terms of the arrangement, including any revenue-sharing agreements and responsibilities of each party.
Compliance with ADA requirements
Vending machines must comply with the Americans with Disabilities Act (ADA) requirements and make them accessible for people with disabilities. This includes considerations such as accessible height, reach, and controls on the machines.
Understand and pay taxes related to your vending machine business. This includes sales tax, income tax, and any other applicable taxes. Keep accurate financial records to stay compliant.
Consider getting insurance coverage to protect the business from potential risks, like theft, vandalism, or liability claims. Liability insurance can be particularly important in case of any accidents or injuries related to the vending machines.
Data protection and privacy
If your vending machines collect customer data through cashless payment systems or loyalty programs, make sure you have proper data protection. Implement secure practices to protect customer information and stay informed about relevant regulations.
Tax and Compliance Considerations
There are a few things that are important to plan for before starting your own small business. Keep in mind: Even if you only run one vending machine, you’re legally a small business and must file business taxes if you make over $400 per year .
Business structure and formation
First, you’ll need to think about what business entity you want to run as. If you want to protect yourself from personal liability as a vending machine owner, it’s best to not operate as a sole proprietorship. Becoming a limited liability company (LLC) gives better liability protection and more options for how you’re taxed than a sole proprietorship. You can also consider becoming an S-corp or a C-corp .
Setting up an LLC is much easier when you use a business formation service . These services know the laws based on where you’re located and make sure you’re compliant — without you having to do all the research yourself. Use Nav to find the best business formation service for your business quickly and efficiently.
Tax and accounting software
You’ll probably have to pay sales tax on what you sell out of your vending machines, unless you’re stationed in one of the five states that doesn’t charge sales tax . The percentage of tax you pay depends on the sales tax rate in the state. Turning to a professional to file your business taxes can help you stay compliant with all local, state, and federal laws, as well as get you the highest possible return.
Additionally, having an organized accounting system from when you form your business is ideal (although it’s not too late to organize it if you’re already up and running). Bookkeeping and accounting on a spreadsheet for all of your vending machine sales can quickly get out of hand. Instead, use accounting software to keep everything in one place and to be able to pull financial statements quickly that tell you how your machines are performing.
POS Systems: How to Accept Payments
You have several choices in how you accept payments: coins only, cash and coins, and credit cards. Accepting cash means you’ll have to keep your machine stocked with change.
Allowing credit card payments is a great way to boost your sales since most customers expect to be able to pay for items with a card. Machines with card readers cost more up-front, but it may be worth it to increase sales. You will have to sign a contract with a payment gateway and pay various fees to the payment gateway provider, so do your research before choosing one to make sure you’re paying a fair amount.
How to Optimize Profits
The location of your vending machines and the items you’re selling are the biggest indicators of how well your products will sell. If there is a lot of foot traffic — and it’s the right kind of foot traffic — you’re likely to make money. Think about who the regular clientele is in the area and make sure it matches up to what you’re selling, like to-go snacks in dormitories and coconut water in a gym.
Additionally, make sure you negotiate a fair rate with the property owner so you aren’t giving up too much to place the machine in that location. If the property owner isn’t willing to work with you, it may be worth looking elsewhere. Ensuring you aren’t overpaying for your payment gateway (if you have one) is another way to maximize your take-away income.
Protect Vending Machines With Business Insurance
Owning a business is inherently risky, and a vending machine business is no different. Business insurance can provide you with protection and peace of mind so you can get back to operating your business. Having insurance covers you if one of your vending machines is vandalized or there is a liability claim against your business. Nav partners with Mylo to provide personalized business insurance tailored to your unique business’s needs.
The vending machine industry is great for new or first-time business owners, because the overhead and startup costs are smaller than many other businesses and each machine shouldn’t require daily attention. Opening a vending machine could provide passive income on the side — or become a full-time business. Whether you use business funding or open it with your savings, a vending machine business could be a great path to making more income.
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Is the vending machine business still viable in 2023?
Yes. Vending machines are a profitable business idea that can provide passive income or become a full-time gig. You can have one machine or 100+ machines — how much you scale is completely up to you. A single vending machine alone will not make you a ton of money (the average is between $5 and $100 per week), but if you don’t have much time or you want to add multiple machines, it could be worth it.
How to handle vandalism to a vending machine?
The first consideration for vandalism is to choose the right location. Picking a spot that has a lower crime rate and is in a well-lit or populated area is a good defense against vandalism. However, nothing is foolproof, so your best bet is to get business insurance in case vandalism does happen.
Is a vending machine business considered passive income?
Yes. Operating a vending machine does require work, but it is considered passive income, because you won’t have to work on it full time. How often you have to restock inventory depends on the location and what you’re selling, but you’ll probably have to restock between once a week and once a month.
What credit score do I need to get a business credit card for a vending machine business?
Business credit card providers usually want your personal credit score to be above 600, and sometimes higher. It depends on the credit card, but they are typically looking for a good to excellent credit score. Credit card companies don’t usually look at your business credit score when determining whether you qualify for the card. If you need to build up your personal credit score, you can do so by making on-time payments and lowering your debt. Over time, this can help improve your credit.
How much does a vending machine cost, on average?
The cost of a vending machine can vary significantly depending on various factors, including the type of machine, its size, features, brand, and condition (new or used). Snack and candy machines can cost anywhere from $500 for a used model to $6,000 for a new model. Specialized machines can cost $15,000 or more.
Can you buy a vending machine and put it anywhere?
You can’t put your vending machine anywhere you would like. You usually have to negotiate a contract with the land or property owner stating that you’ll pay them part of the profit before you can place a vending machine. There are some locations, like office buildings, that may negotiate a contract with you without charging you to house the machine.
Do vending machines make good money?
Vending machines can be profitable and quite hands-off, but it often requires having a lot of machines to make a significant amount of money. You’ll probably need to have a full-time vending machine business to make enough money to live off of, but it can also be an excellent source of side income.
This article was originally written on February 7, 2023 and updated on November 20, 2023.
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Tiffany Verbeck is a Digital Marketing Copywriter for Nav. She uses the skills she learned from her master’s degree in writing to provide guidance to small businesses trying to navigate the ins-and-outs of financing. Previously, she ran a writing business for three years, and her work has appeared on sites like Business Insider, VaroWorth, and Mission Lane.
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DOWNLOAD VENDING MACHINE BUSINESS PLAN SAMPLE (WITH FINANCIALS)
Looking for a Vending Machine business plan for your new or existing enterprise?
Download this Vending Machine business plan, which you can download to present to NIRSAL, TEF BOI, BOA, and other investors.
See some vending machine pictures here .
VENDING MACHINE BUSINESS PLAN TEMPLATE IN NIGERIA
Crunch-More Vending Company is a business enterprise in the retailing industry that will be specialized in leveraging the vending machine retailing model. Although our business will be based in Challenge, Ibadan where we have been able to secure a 40 by 40 feet warehouse, we plan to expand to all major cities in Nigeria.
We are aware that there are several large and small retail outlets and businesses all around Challenge who are into vending machine business as well, which is why we spent time and resources to conduct our feasibility studies and market survey to position our vending machines in strategic places in and around Challenge and also to offer much more than our competitors will be offering in terms of products and of course customer service.
Crunch-More Vending Company will ensure that all our customers are given first-class treatment whenever they purchase products from our vending machines. No matter how large the numbers of our customer base may increase, a one on one relationship will be maintained with our customers using CRM software. When making some business plans, we will ensure to involve our customers in the decision making.
We will also ensure that money changers are position in some of our busiest vending machines locations so to ease the problem of change face by our customers when purchasing from our vending machine.
A 24 hours a day and seven days a week, mini standard call centre/ customer complaint centre will be operating for the sole purpose of resolving customer’s complaints as fast as we can within the scope of our business.
Crunch-More Vending Company is owned and manages by Richard Michael. A graduate of Business Administration who has extensive experience working with one of the leading retailing outlets with several leading vending machines in Nigeria.
Our Products and Services
Crunch-More Vending Company is in the vending machines cum retailing industry to make profits and ensure we go all the way to make available a wide range of goods and products from top manufacturing brands in Nigeria and other countries across the world.
Here are some of the goods that will be available in our vending machines;
- Children’s toys
- Beauty products and cosmetics
Mission and Vision
- Our vision is to build a vending machine business that will have an active presence all over Ibadan, Oyo state and major cities of Nigeria.
- Our mission is to establish a vending machines business that will make available a wide range of goods and products from top manufacturing brands at affordable prices to the residence of Ibadan and major cities in Nigeria.
Our Business Structure
Crunch More Vending Company intention of starting a vending machine business is to build a standard vending machine business with vending machines in a strategic position in key cities in Oyo state and of course major cities in Nigeria.
Putting in place a good business structure, we will ensure that we hire only people that are qualified, honest, customer-centric and are ready to work to help us build a prosperous business to occupy the following positions;
- Chief Executive Officer (Owner)
- Warehouse / Store Manager
- Merchandise Manager
- Admin and Human Resources Manager
- Sales and Marketing Manager
- Information Technologist
- Client Services Executive
Our Target Market
We do want to reach those we have set out to meet their needs. hence, we will leave no stone unturned in identifying who they are. Perhaps the vending machines business / retailing industry have the widest range of customers; everybody on planet earth has one or more things that they would need in a retail shop or from a vending machine. It is difficult to find people around who don’t patronize retail shops or vending machines when they come across one.
We have conducted our market research and we have ideas of what our target market would be expecting from us. We are in business to retail a wide range of products via our vending machines to the following groups of people;
- Corporate Executives
- Business People
- Sports Men and Women
It is important to state that our sales forecast is based on the data gathered during our feasibility studies, market survey and also some of the assumptions readily available in the field. One thing that is common with vending machine business is if you have your vending machines installed in locations that are prone to high traffic; the easier it is for you to make sales.
So also, the more the variety of the products you have in your vending machines, the more customers you are going to attract.
This is why we will ensure that within our capacity we make available a wide range of goods from different manufacturing brands in all our vending machine outlets. Below are the sales projections that we were able to come up with for the first three years of operations;
- First Year-: N20,000,000
- Second Year-: N50,000,000
- Third Year-: N120,000,000
Start-up Expenditure (Budget)
When it comes to starting a vending machine business the major areas that you look towards spending the bulk of your cash is in the purchase of vending machines and of course renting or leasing warehouse facilities. Aside from that, you are not expected to spend much except for paying your employees and the purchase of vans.
We would need an estimate of N50,000,000 to successfully set up our vending machine business in Ibadan.
Generating Startup Capital
Crunch-More Vending Company is a private business that is solely owned and financed by Richard Michael. he intends to welcome any business partner.
These are the areas we intend to generate our start-up capital;
- Generate part of the start-up capital from personal savings
- Business Partners
- Apply for a loan from our Bank
N.B: We have been able to generate about N20,000,000 and we are at the final stages of obtaining a loan facility of N30,000,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
How To Download Vending Machine Business Plan PDF and Doc (With financial analysis)
Pay the sum of N5000 ( Five thousand naira only) to the account detail below: Bank: GTBank Name: Oyewole Abidemi (I am putting my name and not our company account so you know I am real and you can trust me, and trace me) Ac/No: 0238933625 Type: Saving
P.S: We can also tailor the business plan to your name, business size, capital requirements, and more to fit your direct needs. Call or message +234 701 754 2853 for inquiries.
Thereafter, send us your email address through text message to +234 701 754 2853. The text must contain the title of the business plan you want and also your email address. Immediately after the confirmation of your payment, we will send the Vending machine Business Plan to your email address where you can easily download it.
Dr. Abi Demi is a skilled technical writer and author with specialties in the martech and fintech space. Featured on Tekedia, Coin Review, Business Insider, Fintechna, Cryptocoin.news, Date 360 and several other sterling online publications, Demi is an astute technical writer that specializes in finance, marketing and technology - with over 500 published pieces across the internet ecosystem. Contact Abi Demi - [email protected]
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