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Question for vendors with 10+ years


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I have been in business for over 7 years now.  I have reached the point where I no longer need additional accounts.  So, assuming nothing changes, I am quite content with where I am at.

My question is this: Did you ever reach a point where your repair/upgrade expenses significantly dropped?

The first 4 years of business were entirely growth-based years.  I reinvested almost everything.  The 5th and 6th years were also growth years but I also paid myself so that I could focus on vending full-time.  This is the 7th year and I seem to be at a stage where I am literally running out of things that need to be done (aside from your typical repairs... cooling deck issues, coin mech and validator repair, etc...).  I actually found out that I only have about 5 machines that actually need a serious upgrade (validator, new control board, newer machine, etc..)  Even with the rather constant upgrades, I seem to be able to afford it without issue.  I am starting to wonder if I should focus on upgrading some decent accounts or not.  For example, An account has an AP 7600 and a Rock-ola 8-select and it does about $4000/year.  I think that a board upgrade with a drop sensor would make customers happier but it's not necessary.  Replacing the rockola might be a better move.  

The question is, is this even worth it?  

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While I don't have 10+ years vending I do feel compelled to chime in. Why be content on the size of your company? Vending is a business that is relatively easy to scale compared to others. Why not create a large business that you can one day sell for a nice capital gain??

While you are still young, (same age as me)being a route driver can be physically taxing on the body. Do you still want to be a driver in your 50s?  What happens if you get sick or hurt or even worse? You seem like a good operator. Maybe its time to bring someone in under your wing and groom them to be a good route driver. Start your second route and have an exit strategy in place for the distant future. Just my 2 cents.

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One thing is always certain in this business, accounts close, they change vendors and there will always be competition looking to provide better machines or pricing.  I suggest always adding to your route.

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You should always be looking to replace your bottom 10% of accounts with better accounts.  Not expanding leads to attrition that you can never predict.  It also leaves you open to declines in the economy or other social changes.  You must keep moving to stay in business in the long term.

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Been in it for more than 10,  I say, If you ain't growing, your dying.  Always looking for the next stop.  A rule that I live by.  I keep a small warehouse full of working units, so I can say "I'm ready when you are".

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Those are all great points and thanks!  I guess I should have been more clear.  I am still actively trying to replace slower accounts with better accounts, but I am not ready to expand to the realm of needing a second driver. I'm waiting a few years until I get my house completely remodeled so that I have the option to sell and move and find a place with a large garage.

Anacapa, you have a very good point that I have wondered about.. what if I get hurt.. that is the only reason I want to eventually hire a pt driver.  I have heard from many vendors that they didn't make much more when they had 5+ routes than they did when they only had themselves. I'm waiting on that.

The question is really pertaining to repair costs as I don't know if I am just in a good time and not having many repairs or if my investments have just paid off.

 

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Last year was 10 years for the company hard to believe. I think general machine repairs vary some years better than others. I am doing some upgrades this year new machine, board upgrades the machines that aren't mdb but should be is my focus. Getting my best locations mdb with credit card readers and adding new locations the with same is the goal. 

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You need a backup plan for sure - I ended up in the hospital last year getting a stent in my heart.  If I had not had a good part time guy who was ready to step up and keep the locations serviced it would have been ugly.  As it was, my wife brought my trusty laptop to me in the hospital so I could run payroll and banking....

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56 minutes ago, Southeast Treats said:

You need a backup plan for sure - I ended up in the hospital last year getting a stent in my heart.  If I had not had a good part time guy who was ready to step up and keep the locations serviced it would have been ugly.  As it was, my wife brought my trusty laptop to me in the hospital so I could run payroll and banking....

That's very true.  With a family, I am far more sensitive to such a thing which is why I definitely have considered going back to expanding in a couple years just so I can afford to hire someone.  The plan I have is to hire a part-time who runs the whole route one week each month (if they can) and works part-time the other weeks.  That way, they'll be familiar with the route.  The scary part is figuring out if someone is capable of doing the work and doing it as well as I think I do.

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If your business isnt growing its dying. You need to keep growing. 4000 a year accounts may be what they are but u need to find some 10k+ a year acts and put some high end stuff

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9 hours ago, AngryChris said:

The scary part is figuring out if someone is capable of doing the work and doing it as well as I think I do.

I'm not sure that anyone will ever run your route to your standards.  My guy has been in vending a lot longer that I have and is one of my big information resources, but even so he does not do everything the way that I would.  He does good work, we settle the big issues and I leave him room to operate in a way that works for him.  Think back to anyone you ever worked for who was a micromanager and remember how annoying that was to you; it's easy to slip into that mode if you want everyone to work exactly like you do. 

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You're making a mistake in letting him do things his way unless you are keeping tabs on his meter readings, cash collections, truck and machine inventory.  I understand that you didn't have the experience he did but you can't give carte blanche to any employee.  I believe you've said before that you are running VMS so I hope you're using it to monitor his work.  You can certainly have expectations of how you want the work done so you should always be steering him to the way you want things done.  Just remember that he probably knows more ways to steal than you do so be vigilant.  

I had experienced and inexperienced guys work for me and I still dictated the merchandising, the accountability, the schedule and demanded that every truck and machine be impeccably merchandised.  No upside down candy, no low coin tubes, and one thing I learned in retail was that their warehouse (their truck) had to look as good as their sales floor (machines).  There was only one way to fill each machine and only one way to sanitize coffee and cup soda machines.  In return I paid well, gave them vacation and gave them a raise every year.  I was also just a phone call away to walk them through any problem and I was never shy about spending money on good equipment (all new) and to keep their machines and trucks running.  I also gave them refrigerated box trucks to work out of and they had it better than anywhere else.  Expect and inspect is the rule I followed and they all knew it.  I never hesitated to keep an eye on all shortages and to even set drivers up if I felt it was needed to prove them guilty or not.

It's your business, not theirs.  I hope I've not come off too harsh.

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Not at all.  I managed people for 20 years in my last career, and it's not that I let them run wild, but if I can't trust their judgement in doing the job I don't want them working for me.  I run the planograms, par levels, audit cash, and follow up on site at random times.   Setting standards and following up.

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  • 2 weeks later...
On 5/1/2017 at 10:34 PM, Southeast Treats said:

You need a backup plan for sure - I ended up in the hospital last year getting a stent in my heart.  If I had not had a good part time guy who was ready to step up and keep the locations serviced it would have been ugly.  As it was, my wife brought my trusty laptop to me in the hospital so I could run payroll and banking....

 

I am so sorry to hear this about your heart.  The exercise should help keep you strong.  Just be certain to keep that stress level under control.  If you should ever run into a problem, losing a large account or anything I can help with let me know.  Bill and I will be there at No charge, just call.  909-583-9068.  Bev

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On ‎4‎/‎30‎/‎2017 at 0:06 PM, AngryChris said:

Those are all great points and thanks!  I guess I should have been more clear.  I am still actively trying to replace slower accounts with better accounts, but I am not ready to expand to the realm of needing a second driver. I'm waiting a few years until I get my house completely remodeled so that I have the option to sell and move and find a place with a large garage.

Anacapa, you have a very good point that I have wondered about.. what if I get hurt.. that is the only reason I want to eventually hire a pt driver.  I have heard from many vendors that they didn't make much more when they had 5+ routes than they did when they only had themselves. I'm waiting on that.

The question is really pertaining to repair costs as I don't know if I am just in a good time and not having many repairs or if my investments have just paid off.

 

While I totally agree with everyone who has responded, I understand your original question Chris.  It sounds like you have been doing everything right with reinvesting in your equipment, upgrading bad components, and so on.  Now you're at a point where things seem to be humming right along.  I've had those years where every machine just seemed to have few service issues and then years where it seemed every machine wanted to crap out at the same time.  I would stock pile some of your freed up cashflow for those gloomy periods where the crap hits the fan.  If the 7600 is working just fine and the customer doesn't seem to have issues requiring a drop sensor and they are happy with the Rock-ola, I'd leave things be and bank the cash.  Maybe even designate it for the upgrades and that way you have it for that, but in the mean time you'll also have a nice cushion for any unforeseen problems.  We have had periods of time where service expenses dropped and I used that time to prepare for the unknown to come.  Sounds like you have a sweet operation.  Are you running your vending as a full-time job or as supplemental income.  You mentioned possibly hiring a PT driver down the road.  :)

 

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8 hours ago, flintflash said:

While I totally agree with everyone who has responded, I understand your original question Chris.  It sounds like you have been doing everything right with reinvesting in your equipment, upgrading bad components, and so on.  Now you're at a point where things seem to be humming right along.  I've had those years where every machine just seemed to have few service issues and then years where it seemed every machine wanted to crap out at the same time.  I would stock pile some of your freed up cashflow for those gloomy periods where the crap hits the fan.  If the 7600 is working just fine and the customer doesn't seem to have issues requiring a drop sensor and they are happy with the Rock-ola, I'd leave things be and bank the cash.  Maybe even designate it for the upgrades and that way you have it for that, but in the mean time you'll also have a nice cushion for any unforeseen problems.  We have had periods of time where service expenses dropped and I used that time to prepare for the unknown to come.  Sounds like you have a sweet operation.  Are you running your vending as a full-time job or as supplemental income.  You mentioned possibly hiring a PT driver down the road.  :)

 

First of all, THANK YOU for responding to my actual question!!!  Yes, I am full-time in the sense that this is all that I do and I am the sole income-earner in my household.  Hours vary of course but it's full-time as far as I am concerned.

I am doing what you have advised in my own way.  I am not literally stock-piling cash but I am paying down my debt as quickly as possible.  My mentality is that.. as long as I have enough credit limit for a rainy day, I don't need actual cash.  At the same time, I float money regularly until payments are due so getting so I can get cash pretty quick in case of an emergency where actual cash is needed.

I guess the dilemma is two-fold.  On one hand, I want to live a little before I go into the next phase of business.  On the other hand, I am faced with several issues.  My first issue is that I am running out of time and I may need to have deliveries instead of picking orders up myself.  However, I cannot get deliveries from most suppliers because of zoning issues (they won't deliver to my residence).  The second issue is that I don't have space for more equipment as my garage is becoming insufficient, especially if I try to get deliveries from the only supplier who will deliver here.  The third issue is the truck.  It has 207k miles and counting.  I seem to really need more space on it as I have been using it as a rolling warehouse BUT more garage space or warehouse space would resolve that should I choose to go that route instead.  In any event, the solutions are to either spend money or just work a little harder (by working harder, I mean continue to pick up my own orders and work out of a packed truck regularly).  Now.. I could either invest into this next phase now and move forward which would allow me to continue to grow OR I could reap the rewards of my hard work.  I REALLY want to take a vacation and relax for a little bit since I haven't had much in the way of a vacation since 2010 just before I registered my business.

You did give me the answer I was looking for.  As I suspect, I am likely to continue to have rainy days and rainy years.  At least, that's what I took from your response.  I just haven't quite figured out whether I should continue being aggressive or if I have warranted allowing myself to take advantage of my free time by spending it with family or working on my house for at least a year or so and take some vacations while I can still afford to have 3-day weekends.  It really only takes a few more decent accounts to permanently put me on a 5-day work-week without room for days off once you factor repairs...

The PT driver is becoming more important for reasons I just mentioned.  I am running out of time and my business cannot survive if something happens to me or if I take too much time off.  Hiring a PT driver would obviously give me a cushion should I get hurt or want a little time off but it would also require me to grow more.  I think I found a sweet-spot in the future when I am ready, and that sweet spot is IF and when I can hire two part-time drivers with routes grossing approximately 200k each and I do maybe 100k.  Should anyone not be able to work, the other two can pick up the slack.  Meanwhile, I am able to switch routes with them on occasion to oversee everything and I have time for repairs and everything else, including loading trucks.  I figure at that gross income level (500k), there's enough to pay everyone well, still pay myself well, pay for overhead and a warehouse, and still have some free time without the fear of getting hurt and losing everything.  Any more, and I think I would need to hire another person as I don't think I could handle all of the tasks by myself in a reasonable time.  Money isn't everything to me, but I do want to make money and have a life at the same time.  I think I might be rambling a bit here but there IS an idea in mind for the future.  I just wonder if I should take advantage of my luck right now or wait it out longer.  Everything I have ever been taught tells me that I NEED a vacation and I NEED to give myself a break.

P.S.  My route is anything but a sweet operation lol.  It's good in my opinion, and I am slowly weeding out the turds and getting better accounts as I go, but I am probably averaging something like $2,800/account (snack + soda combined) right now, with my best accounts doing a little over 10k and slowest accounts doing something around 1300.  The bulk of my accounts do 2000-4000/year.  My goal is to average 4,000/account and not do less than 2,000 from can/snack accounts and no less than 3,000 from bottle/snack accounts.  I'm not there yet, and I could really use a larger garage to allow myself to start refurbishing machines myself and sending them back out.  Of course, this would all require me to spend more time trying to sell my services which kind of makes everything come full circle.  I guess, when I think about it after everyone's comments, I really should take my vacation and definitely enjoy my time a bit more than the past several years but I should also focus on restructuring at a minimum so that I will be ready for the time when I am ready to grow more.

Thank you all for your responses.

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When I needed to get commercial deliveries, my first step was to find a nice storage unit with good truck access.  I was able to rent a 10X10 unit and put a good combination lock on it, so deliveries came to the unit and the drivers had the combo.  Only downside was the unit I had was not climate controlled, so when I got a snack delivery I would move it to my house within a day or two.  The unit was fine for drinks and a few spare machines.  Cutting out most of the shopping trips opens up a good block of time, but at a cost of course.  And since the unit was month to month, I was not committed to staying if it didn't work or I needed more. 

For sure find some time off for yourself and family.  Work is so we can enjoy life, life is not so we can always be at work.   That's something I need to work on as well, but if you are burnt out all the time you are not as productive as you could be. 

Hiring help is a big step on switching from owning a job to owning a business.  Most business owners will tell you they wish they had started hiring earlier, but you have to be set up and have the numbers, especially if this is your only income.

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16 hours ago, AngryChris said:

First of all, THANK YOU for responding to my actual question!!!  Yes, I am full-time in the sense that this is all that I do and I am the sole income-earner in my household.  Hours vary of course but it's full-time as far as I am concerned.

I am doing what you have advised in my own way.  I am not literally stock-piling cash but I am paying down my debt as quickly as possible.  My mentality is that.. as long as I have enough credit limit for a rainy day, I don't need actual cash.  At the same time, I float money regularly until payments are due so getting so I can get cash pretty quick in case of an emergency where actual cash is needed.

I guess the dilemma is two-fold.  On one hand, I want to live a little before I go into the next phase of business.  On the other hand, I am faced with several issues.  My first issue is that I am running out of time and I may need to have deliveries instead of picking orders up myself.  However, I cannot get deliveries from most suppliers because of zoning issues (they won't deliver to my residence).  The second issue is that I don't have space for more equipment as my garage is becoming insufficient, especially if I try to get deliveries from the only supplier who will deliver here.  The third issue is the truck.  It has 207k miles and counting.  I seem to really need more space on it as I have been using it as a rolling warehouse BUT more garage space or warehouse space would resolve that should I choose to go that route instead.  In any event, the solutions are to either spend money or just work a little harder (by working harder, I mean continue to pick up my own orders and work out of a packed truck regularly).  Now.. I could either invest into this next phase now and move forward which would allow me to continue to grow OR I could reap the rewards of my hard work.  I REALLY want to take a vacation and relax for a little bit since I haven't had much in the way of a vacation since 2010 just before I registered my business.

You did give me the answer I was looking for.  As I suspect, I am likely to continue to have rainy days and rainy years.  At least, that's what I took from your response.  I just haven't quite figured out whether I should continue being aggressive or if I have warranted allowing myself to take advantage of my free time by spending it with family or working on my house for at least a year or so and take some vacations while I can still afford to have 3-day weekends.  It really only takes a few more decent accounts to permanently put me on a 5-day work-week without room for days off once you factor repairs...

The PT driver is becoming more important for reasons I just mentioned.  I am running out of time and my business cannot survive if something happens to me or if I take too much time off.  Hiring a PT driver would obviously give me a cushion should I get hurt or want a little time off but it would also require me to grow more.  I think I found a sweet-spot in the future when I am ready, and that sweet spot is IF and when I can hire two part-time drivers with routes grossing approximately 200k each and I do maybe 100k.  Should anyone not be able to work, the other two can pick up the slack.  Meanwhile, I am able to switch routes with them on occasion to oversee everything and I have time for repairs and everything else, including loading trucks.  I figure at that gross income level (500k), there's enough to pay everyone well, still pay myself well, pay for overhead and a warehouse, and still have some free time without the fear of getting hurt and losing everything.  Any more, and I think I would need to hire another person as I don't think I could handle all of the tasks by myself in a reasonable time.  Money isn't everything to me, but I do want to make money and have a life at the same time.  I think I might be rambling a bit here but there IS an idea in mind for the future.  I just wonder if I should take advantage of my luck right now or wait it out longer.  Everything I have ever been taught tells me that I NEED a vacation and I NEED to give myself a break.

P.S.  My route is anything but a sweet operation lol.  It's good in my opinion, and I am slowly weeding out the turds and getting better accounts as I go, but I am probably averaging something like $2,800/account (snack + soda combined) right now, with my best accounts doing a little over 10k and slowest accounts doing something around 1300.  The bulk of my accounts do 2000-4000/year.  My goal is to average 4,000/account and not do less than 2,000 from can/snack accounts and no less than 3,000 from bottle/snack accounts.  I'm not there yet, and I could really use a larger garage to allow myself to start refurbishing machines myself and sending them back out.  Of course, this would all require me to spend more time trying to sell my services which kind of makes everything come full circle.  I guess, when I think about it after everyone's comments, I really should take my vacation and definitely enjoy my time a bit more than the past several years but I should also focus on restructuring at a minimum so that I will be ready for the time when I am ready to grow more.

Thank you all for your responses.

DEFINITELY, use this time to enjoy life.  Take the vacation!  I worked too many years and almost burnt myself out by not taking time (and I had employees and a manager).  We work to build our business so that we can provide and have a decent life, but if you don't cease those moments to enjoy the fruits of your labor, it ends up being a burden and wearing you down.  You've busted your hump and worked your way to this point where you can step back and take a breath (or two).  Enjoy it.  It doesn't happen always (as you know), there's always another fire to put out somewhere.  So right now, spend the extra time with your family.  Use some of it to make those plans for the future, but enjoy your hard work.  Afterall, this is why we do what we do.  NICE JOB, Chris!  :) 

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Okay so I went back to your original post of:
My question is this: Did you ever reach a point where your repair/upgrade expenses significantly dropped?"

After 25 years of running multiple routes, my repair expense remained about the same for the first 10 years but then it really when up.  There were some reasons, of course, like wear and tear.  The machines purchased during the first year were all refurb's except a handful of new.  So those machines started aging needing to be brought into the shop to be gone over top to bottom or some would become parts machines.   Also new technologies in machines such as MDB machines which were all of rage.  Fortunately for us, we had purchased over 200 of the Pepsi flexPack units.  Remember those duds.  My Pepsi contact was over 120 miles away, which made getting their help very difficult. After buying the machines from them, they weren't against allowing two of their tech's coming down Friday to Sunday eve to upgrade and fix those machines. Of course, we paid for hours worked, lodging and food.

Pepsi actually stopped production on the flex packs because the bottles would not drop without jamming after 6 bottles dropped.  We had figured out the simple fix was a cotter pin in the right spot to keep the shims in place.   My point in saying that is these were new so with 200 of them going out during the start-up phase may be have given a false picture of normal repairs. 

Compressors fail, coin mechs get dirty, credit card readers need to be installed, lights go out, on and on.  Machines fail part by part first. There is such a thing as "fatigue limit on each part".  It doesn't matter whether it is a large machine or small if there is a part, it has been engineered with a fatigue limit. Each has a limited life based on the stress (use) level. Most parts show no signs of a coming problem, it just stops working. Nothing you can do about 90% of these situations, just handle it when it happens.

From reading your procedures of routine maintenance, you are in good shape.  You are keeping your ROCOF in line.  "The ‘failure curve’ for a machine has a special name – ROCOF – Rate of Occurrence of Failure".

 

Bev

 

 

 

 

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