Is this a good route deal?

[JVending]

I'm trying to get into the business, and I think I've found the perfect way to get my feet wet. Found a route on Craigslist (as suggested by other posts) and I just wanted to run it by you all to see if this is worth the hassle:

The company has been in existence for 12 years with an established reputation in the area.

-22 locations

Total Sales- avg over the last 4 years $124,128 (supported by tax docs) projected sales for 2013 $156,000 ($13,000)-- additional locations have been added over the last 2 months to substantiate this estimated increase

Equipment Value - $32,500 (36 pieces of equipment, company owned plus 12 Pepsi owned machines and 2 Coke owned machines)

Asking - $105,000

Serious inquires ONLY please contact Broker Stephanie Bryan via e-mail. Only serious inquiries will be answered.

FAQ:

1. Why are we selling? After 12 years we are exploring new opportunities

2. How many days a week do you service machines? Including the shopping for the machines about 3-4 days a week (35 hours of work)

3. Training? 30 days of support - .2 weeks of training

a. -training will consist of tutoring on the machines, machine service schedule, commission schedule, etc..

4. How soon looking to sale? As soon as possible

5. Owner financing available? Possibly but at least a 15 percent down payment would be needed and financing would not exceed 24 months plus closing costs would be paid by the buyer (closing costs: attorney fees, filing fees, etc)

6. What are Pepsi/ Coke owned machines? Coke/ Pepsi permits the company to utilize the machines (frees of cost) as long as they are filled with coke and pepsi products according to the brand of the machine

[TKK]

Sounds good except for the Pepsi owned machines..

Ask if they can take 12,000 off and buy your own machines and swap them

[moondog]

I'm trying to get into the business, and I think I've found the perfect way to get my feet wet. Found a route on Craigslist (as suggested by other posts) and I just wanted to run it by you all to see if this is worth the hassle:

This doesn't seem to be a bad deal - basically you'd net about 70K annually after expenses. Most guys in the vending biz look for accounts with a 100% ROI or better - but for businesses in general, that's unheard of.

I think the bigger question here is whether a beginner could handle an operation this large. Most people start out with two or three machines (I started with ten) to get the hang of the deal before expanding slowly.

This business is not rocket science but does have a lot of details required to be successful. Reading the back posts here is a great way to learn the basics but until you run a few machines you probably would find a route this size to be overwhelming.

[mission vending]

The fact that the revenue claim is supported by tax returns is VERY good. If price includes all inventory, parts and idle equipment, hopefully a route truck as well this could be a good opportunity. Certainly worth getting more detailed information if you are serious about getting into vending.

[JVending]

I think the bigger question here is whether a beginner could handle an operation this large. Most people start out with two or three machines (I started with ten) to get the hang of the deal before expanding slowly.

This business is not rocket science but does have a lot of details required to be successful. Reading the back posts here is a great way to learn the basics but until you run a few machines you probably would find a route this size to be overwhelming.

Now, I know that I'm a beginner, but with the 2 weeks of training that he is including, do you think that will be enough to catch me up? I really respect you all's experience (hence why I'm here), yet I also don't want to let this deal pass up if it's possible. So I'm wondering how your start up was with 10 machines and what issues do you think will make this type of thing overwhelming?

All responses are taken into consideration. So I thank you all.

[moondog]

I'm trying to get into the business, and I think I've found the perfect way to get my feet wet. Found a route on Craigslist (as suggested by other posts) and I just wanted to run it by you all to see if this is worth the hassle:

Well,

It's a long story, but I think my biggest challenge initially was getting to know the equipment. Learning how to do the basics like changing prices, replacing coin mechs and dollar validators. Knowing what equipment was good and what was not so good. Setting up accounts at supply places (once I found them ) and learning where to buy parts.

I'm not saying you can't do this, but you're biting off a big chew with roughly 60 machines. Many of those machines will be the same brand and model but it wouldn't surprise me if you ended up with 20 different models - each model slighty different in terms of programming, etc.

The two week training period will probably consist of servicing each machine and meeting the contacts - you better plan on taking good notes.

Based on the numbers, I figure the current owner is probably servicing each machine every other week. I find that servicing 10 machines a day is a pretty good number to shoot for. It gives you time to do the extras - picking up product, swapping out defective parts etc. 60 machines shouldn't take you 40 hours a week but it's in that gray zone where you're not big enough to hire help but you're too busy to handle a lot of emergency calls effectively.

Relative to the amount of investment required, this is pretty much an "all in" situation, so you better be sure this is what you want to do.

Some other things to consider are; what kind of vehicle will you need, storage space required, money counting equipment and basic servicing equipment.

If you get a chance, try and run the exact vending equipment by us - don't forget the coin mechs and BAs.

Good Luck

[dogcow]

frankly i would not finance you if i were the owner, you could easily eff up and lose all the locs then what

do you have to sign a personal guarantee? if he is financing try to work out a deal for better support

to address what moon dog says

[JVending]

I'm really loving the input, and definitely don't want to take something like this lightly because i do realize it's an 'all in' situation. I guess my next question is, if I let this deal go, how often will I even come across something like this? I figure deals like this are few and far in between and I'm really wanting to establish myself in this industry. You all would know, so I'm just receiving you all's guidance and wisdom so I can start to develop my own.

[TKK]

Routes depend on your location. Here I have seen like 3 in a year and sell quick and overpriced. If you have $100,000 then go for it. Would u b ready for it? This isnt as easy as it seems sometimes. Sounds like a great deal. But can YOU handle it? None of us can tell you that you can or not. It's a life changing move for sure. Hopefully for the best. It would b great if you had some experience already. I don't think you'd get financed with them with no experience. It's a great opportunity tho.

[moondog]

I'm really loving the input, and definitely don't want to take something like this lightly because i do realize it's an 'all in' situation. I guess my next question is, if I let this deal go, how often will I even come across something like this? I figure deals like this are few and far in between and I'm really wanting to establish myself in this industry. You all would know, so I'm just receiving you all's guidance and wisdom so I can start to develop my own.

You are correct - good deals are few and far between. I am always looking for routes to purchase - for every ten I see for sale, I might inquire about one and for every ten of those I might actually buy one (or sometimes two).

You'll find that a lot of TVF members encourage doing your own locating over buying someone else's route. I think this tends to be a regional issue - around here, all the good accounts already have a vendor and the locations that don't probably won't support vending machines. I have "moved out" under-performing vendors but this doesn't happen very often so I focus on buying routes to expand.

[JVending]

I know everyone is very specific about what I am capable of. But I am rather interested to hear some of the things you see that might overwhelm me as a newbie taking on this route. All answers go towards my educated decision.

In the meantime, I am going to try and get in contact with the seller to see if he'd be willing to sell a specific area of his route versus me buying the whole business at once. If that wouldn't work, I'd be willing to bargain for some more training time. I think the person would be willing to bargain considering the amount of money he's asking for.

[treadmill]

Now I don't do full line machines but what I would see as being over whelming is that you do not have any knowledge of how any of the machines operate (internally and mechanically). If one of the machines were to break down you might spend more than the allotted time for that account and the rest of the machines would suffer for that day. Get 2 machines down and then you start to have problems because somebodies machines are not going to get serviced that day or possibly that week. If this happens too much you will start to lose accounts and have to pull machines and store them until you can place them. This will also cause you to lose revenue also. That's why everybody is saying to take it slow and build your route slowly learning how each machine works properly and then you will feel confident about yourself.

[AZVendor]

One thing I've always told people who want to get into vending is that there are two ways to do it. The slow way by beginning with soda, getting comfortable and moving up from there, easing into the business part-time. This lets you know if you even like the work before you're in too deep.

The other option is to get immediate cash flow and income to live off of by jumping in and buying an existing business. Depending on the income desired this could require as many as 60+ machines that require weekly service for a decent income. This will require a large up-front investment and a continuing investment in time. Don't jump in if you can't work 60 hrs / week. Beginners always take much more time to service machines and will become quicker and more efficient over a long period of time. As you gain experience a good route driver/owner can service 100 machines per week. This requires good organizational skills, a quick mind, efficient methods and a will to work your butt off.

I'm not trying to scare you off, but you also have to realize that this is not a cheap business to be in. Your investment won't end with the purchase of a route. It takes ongoing reinvestment and sometimes expensive maintenance to keep a route running smoothly. Finding and trusting a good service tech can also go a long way to saving you time in this business. As the old saying goes and I follow it religiously: It takes money to make money.