Advise for Expanding Company

[TenVend]

We are trying to workout a good price........But like I said it puts us in kind of a bad shape.........He is a friend/mentor early on.....Which shouldn't matter too much, but does a little.  Also he is going to finance alot of it at a low rate........So it is kind of hard to haggle too much.  He is doing 20 oz from bottler......Where we are they will run you out of town for more than 1.25.......Pepsi floods our area with $1 bottle machines.........But like I said Bottles are only about 25% of his drinks sales most is .75 cans.....

[Southeast Treats]

I would switch to cans all over if that were the case; with what the bottlers charge me plus sales tax and overhead I don't see the profit in that price!  Good luck, FYI I too bought out a friend/mentor and so far it's been good.  But be clear on the business part so that you don't have problems later.....

[Drhester126]

I feel like there is not enough information. The addition of spare machines and the truck can make things complicated from how much you should pay. We have bought probably half a million from a larger company we have ties with. It isn't always about total gross. You need to go and inspect every account personally. You WILL have turnover. Places don't necessarily like switching vendors,  and some of those people will kick you out. Also of those accounts you cold have some that do 400 a week whereas others could do 10. Anything under 2000 annually is not worth keeping (depending on the size of your company). As far as how much to pay, we always buy at 50% of gross annual sales. You will need to pay more than that cause of the truck and spare machines. 

[TenVend]

Thanks..........That sound good........Dr. how do you guys pay employees...??  We are working on the best and most efficient way to do that...?  So $2000 gross is your cut off for an account.....That comes out to $ 40 a week........We were going to cut out or sale our smaller stuff to a part time guy if it didn't do $50 a week......How did you come up with $2000 cut off.......??  Just wondering if we were missing profit........Some bigger guys say it should be higher that $50.... 

[AZVendor]

Only you can determine if a slow weekly account is right for you.  One way to look at slow accounts is to stretch the service schedule out as long as you can to maximize your collections per visit.  That makes a slow account more palpable and saves you overhead in servicing it.

[Drhester126]

On 10/21/2016 at 10:37 AM, TenVend said:

Thanks..........That sound good........Dr. how do you guys pay employees...??  We are working on the best and most efficient way to do that...?  So $2000 gross is your cut off for an account.....That comes out to $ 40 a week........We were going to cut out or sale our smaller stuff to a part time guy if it didn't do $50 a week......How did you come up with $2000 cut off.......??  Just wondering if we were missing profit........Some bigger guys say it should be higher that $50.... 

Apologies I should have explained more in depth. I say 2000 for the cut off but that's assuming you're running a fairly small operation (I assume this is the case). Us personally,  our cut off is 3500, but we are a larger size small vending business. When your smaller,  smaller accounts means more,  when you're bigger they mean less and they become more of an inconvenience than not. Also take into account the morale of your employees. None of your route people are going to want to go to an account after a month for 75 bucks. It feels like a waste of time and they'll spend more time driving and rotating product than actually servicing the machines. But what the above person said is most accurate,  only you can decide how small is too small for you. It all depends on the size of your company.