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How many accounts to make $50k net money?


RJT

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Lets use the example of each account has a drink and a snack. Let’s say that each machine is doing $50.00 per week ($100 per account).

 

First let’s say that cost of goods is 50% so now we are at $25 per week each machine ($50.00 per account)

 

You will have other cost associated to factor in like fuel, insurance, sales tax, stales, repairs, cost of machines, any commissions, INCOME TAX etc.

 

To make it easy because each persons other cost will vary to some degree lets just take out the cost of goods only for this example.

 

So to “net” $50k ($962.00 per week) you will need around 38 machines or around 20 accounts. Again this does not account for any of the other cost I mentioned earlier.

 

Let’s say we paid an average of $1000 per machine and that would mean a total investment of around $40k that’s if you had no other cost associated with the machines like help moving.

 

If you factor in ALL COST fuel, insurance, taxes, stales, repair cost, and any other cost associated with running the business like websites, bank fees, accounting, office supplies, vehicle maintenance, etc how long will it take you to pay the equipment off and actually make money?

 

 

With vending to grow it always cost you money that takes you time to get back. Unlike a traditional store if you add anew line of products you get your money back after selling with no real added cost like adding vending machines or time to fill and dedicate to the new account.

 

All this is based on you maintaining the 20 accounts and not losing any.

 

So my point is with an average of $50 per machine it is tough to make any decent money considering the risk associated with owning your own business and the amount of cost to have those 20 accounts. 

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But if you had lets say 8 to 10 accounts doing 50k a year net you would only need to work 1 day a week.      If you had 1 account doing 50k net you would need to work 2 or 3 times a week.....

 

Bingo again!!  ;D

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In all fairness, those 20 accounts could be serviced in 3 days comfortably. Would I expect to net $50k in net operating income? No, but I could easily make $30,000 only working 3 days each week.

And 50k in NET INCOME is equivalent to 65,000-70,000 in annual gross income.

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In all fairness, those 20 accounts could be serviced in 3 days comfortably. Would I expect to net $50k in net operating income? No, but I could easily make $30,000 only working 3 days each week.

And 50k in NET INCOME is equivalent to 65,000-70,000 in annual gross income.

 

Mind showing me how you break down to get a $50k net out of $65-$70K gross? 

One account I wish I had Richard :huh:

 

They are out their you just have to get them. Really that is not that big of account in the grand scheme of vending but a nice account none the less. 

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Mind showing me how you break down to get a $50k net out of $65-$70K gross? 

 

They are out their you just have to get them. Really that is not that big of account in the grand scheme of vending but a nice account none the less. 

Im curious RJT, what kind of location would profit 50k a year. I would assume hospitals and larger manufacturing plants? How many blue collar employees would a place need to do such a number?

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Im curious RJT, what kind of location would profit 50k a year. I would assume hospitals and larger manufacturing plants? How many blue collar employees would a place need to do such a number?

 

Obviously it would depend on size but even a smaller hospital (less than 500 beds) can do $100k to with larger ones pushing a million. A blue collar with 100 employees can do $50k or more. Each situation is different I once got a college that had around 1400 students, staff, etc and we could not get it to do much over $500 a week in snacks with 12 machines on site. We couldn't get the drinks because of bottler contracts and such paying big commission, free score boards, etc.

 

The account I mentioned before that did over $100k that I turned down had around had around 300 employees. Another account that I was involved with (but not mine) does around $6k to $9k a week with around 700 employees. That's why its so important when looking at these accounts to go in with as much info as possible so you can make sure you are making a wise investment because it can vary many times but you can get close most situations to figure out the revenue to asset ratio.    

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Obviously it would depend on size but even a smaller hospital (less than 500 beds) can do $100k to with larger ones pushing a million. A blue collar with 100 employees can do $50k or more. Each situation is different I once got a college that had around 1400 students, staff, etc and we could not get it to do much over $500 a week in snacks with 12 machines on site. We couldn't get the drinks because of bottler contracts and such paying big commission, free score boards, etc.

 

The account I mentioned before that did over $100k that I turned down had around had around 300 employees. Another account that I was involved with (but not mine) does around $6k to $9k a week with around 700 employees. That's why its so important when looking at these accounts to go in with as much info as possible so you can make sure you are making a wise investment because it can vary many times but you can get close most situations to figure out the revenue to asset ratio.    

Question for you RJT, I have not gone after a lot of hospitals mainly because here in PHX the majority of them are corporate owned and the majority of them are either using canteen or Ace. What would make such an account want to switch vendors, based on the amount of work to switch out everything and such.

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In all fairness, those 20 accounts could be serviced in 3 days comfortably. Would I expect to net $50k in net operating income? No, but I could easily make $30,000 only working 3 days each week.

And 50k in NET INCOME is equivalent to 65,000-70,000 in annual gross income.

I'm not an accountant, so no, I can't break that down. I am referring solely to personal gross income vs. Personal net income. Figure roughly 80% of your gross income will go toward income tax in order to net close to 50k.

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I feel the question is how much freedom do you want? I want the ability to take a week off every so often. So I don't accept an account that requires me to visit more than once per week. I do have a fill in guy who helps me and I help him, but I don't want to hire any employees.

 

I know vendors pulling in huge money, but they work 7 days a week.

 

I have only been doing this a few years but it seems that the more money you want to earn, the less time off you'll have. I hope I am not right.

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I feel the question is how much freedom do you want? I want the ability to take a week off every so often. So I don't accept an account that requires me to visit more than once per week. I do have a fill in guy who helps me and I help him, but I don't want to hire any employees.

I know vendors pulling in huge money, but they work 7 days a week.

I have only been doing this a few years but it seems that the more money you want to earn, the less time off you'll have. I hope I am not right.

You're mostly right! To make more, you have to work more. You can make your route more efficient though, and that can cut down in time but it can be worth it to cut out 4 hours out of your route if you only profit $40 from a few crappy accounts that get in the way.

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I'm not an accountant, so no, I can't break that down. I am referring solely to personal gross income vs. Personal net income. Figure roughly 80% of your gross income will go toward income tax in order to net close to 50k.

 

Are you talking about your personnel only or are you relating it to actually what the business makes in order for you to see $50k in net? 

 

Everyone's personnel is going to be different because of different writes offs such as children, mortgage, child care, student loans, so hard to get hard fast percentages.  

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I'm talking about making 50k NET after income taxes are accounted for. You brought it up in your initial post. I'm not sure why someone would care so much about netting 50k but it's important to know that you would need to make the equivalent of roughly 65-70k to net that much. That means you would need to show a profit even higher..say 80k+ from the business.

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I feel the question is how much freedom do you want? I want the ability to take a week off every so often. So I don't accept an account that requires me to visit more than once per week. I do have a fill in guy who helps me and I help him, but I don't want to hire any employees.

 

I know vendors pulling in huge money, but they work 7 days a week.

 

I have only been doing this a few years but it seems that the more money you want to earn, the less time off you'll have. I hope I am not right.

 

Yes owning a business can take a lot of time especially during the growth stages because you are between growing yet not enough yet to hire employees to take some of the load off of you the owner. It also depends on how you position yourself that's why I am always talking about averages. Its pretty simple the more machines the more work. The key is making sure your assets are making the most they can for you with the least amount of them. People are always talking about having all their eggs in one basket and I understand that point but that also depends again on how you position you and your company. Have 20 accounts 60 machines out doing $400k a year is better than having the same amount doing $160k. That the difference in having and average of $50 a week per machine and the same amount doing $128.00 a week average per machine. Make the $160k a year and you will be doing most the work yourself, make the $160k a year and you can afford to hire people. 

 

Vending should be no different than any other business. Look at how other companies (not vending) position themselves with the best locations, and either avoid poor locations or close poor performing stores. They sell off assets when needed, are always looking in innovate and be competitive with their competitors. They are reinvesting in their company, etc, etc. Obviously small operators are on a much smaller scale but the principles should be the same.  

 

If you want time off and make decent money you have to grow and have a strong average so you can afford to pay people to do the work. I know owners that are absentee owners, owners that work pretty much 8-5 m-f and they are not huge but have around 5 routes or more.  

I'm talking about making 50k NET after income taxes are accounted for. You brought it up in your initial post. I'm not sure why someone would care so much about netting 50k but it's important to know that you would need to make the equivalent of roughly 65-70k to net that much. That means you would need to show a profit even higher..say 80k+ from the business.

 

 I just used the $50k as an example because most folks would consider that a decent income this day and time. 

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I say you may get lucky on Craig’s list every once in a while, you will not get luck 38 time in one year.

 

A respectable machine with a working coin mech is going to be closer the $3000 plus 100 for delivery.

 

I say all the other expenses RJT glossed over will quickly eat that “net” and turn it into a loss. To make it worse you will have 30 hours a week in supplying and servicing this route and not even a dime to put in your pocket.

 

I say you cannot afford to stop the truck if there is not $100 in each cash box.

 

Walta

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Yes owning a business can take a lot of time especially during the growth stages because you are between growing yet not enough yet to hire employees to take some of the load off of you the owner. It also depends on how you position yourself that's why I am always talking about averages. Its pretty simple the more machines the more work. The key is making sure your assets are making the most they can for you with the least amount of them. People are always talking about having all their eggs in one basket and I understand that point but that also depends again on how you position you and your company. Have 20 accounts 60 machines out doing $400k a year is better than having the same amount doing $160k. That the difference in having and average of $50 a week per machine and the same amount doing $128.00 a week average per machine. Make the $160k a year and you will be doing most the work yourself, make the $160k a year and you can afford to hire people.

Vending should be no different than any other business. Look at how other companies (not vending) position themselves with the best locations, and either avoid poor locations or close poor performing stores. They sell off assets when needed, are always looking in innovate and be competitive with their competitors. They are reinvesting in their company, etc, etc. Obviously small operators are on a much smaller scale but the principles should be the same.

If you want time off and make decent money you have to grow and have a strong average so you can afford to pay people to do the work. I know owners that are absentee owners, owners that work pretty much 8-5 m-f and they are not huge but have around 5 routes or more.

I just used the $50k as an example because most folks would consider that a decent income this day and time.

Most people would consider 50k AFTER income tax to be excellent, not just decent.

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Most people would consider 50k AFTER income tax to be excellent, not just decent.

 Yes some would but to "net" $50k income (in your personnel pocket) you will need to make around $150k to $180k a year in gross sales revenue from a vending operation. Again it will depend on your expenses and write offs. 

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Yes some would but to "net" $50k income (in your personnel pocket) you will need to make around $150k to $180k a year in gross sales revenue from a vending operation. Again it will depend on your expenses and write offs.

I profit 50% after all said and done....

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Really? How so? You must have a huge markup on products or buy them real cheap.

Small bags of chips 75 cents, cheezits cookies 85 cents, anything that looks big 1.00... granola bars 1.00 to 1.25 .. pastries 1.50

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