NewBvend Posted April 25, 2014 Share Posted April 25, 2014 New to forum and new to vending! I'm thinking about buying an established vending business. 30 machines (drinks and snacks). No commissions. All owned and placed. Inventory, parts, etc. included. $50,000 asking price (owner motivated to sell for personal reasons). I've been starting to do some research for a side business venture for my family and this one jumped out at me. Thoughts opinions on how to evaluate this opportunity would be greatly appreciated! Link to comment Share on other sites More sharing options...
tc vending Posted April 25, 2014 Share Posted April 25, 2014 What kinda of equipment do they have usi,ap, royal or Dixie narco. This is my number one thing in buying another vending company the question is how new is the equipment. How much did they gross last year and what was there profit. A location break down with each stops profits will help also prices of products chips, pastries, and candy this varies some by state. I could answer your question with more info. Link to comment Share on other sites More sharing options...
moondog Posted April 25, 2014 Share Posted April 25, 2014 New to forum and new to vending! I'm thinking about buying an established vending business. 30 machines (drinks and snacks). No commissions. All owned and placed. Inventory, parts, etc. included. $50,000 asking price (owner motivated to sell for personal reasons). I've been starting to do some research for a side business venture for my family and this one jumped out at me. Thoughts opinions on how to evaluate this opportunity would be greatly appreciated! For me the big question is how much does it gross per month. While it's nice to get decent equipment with the account, a good account will justify the replacement of some machines. What I look for is any location that does better than $500 a month gross - anything less tends to be a waste of time although this metric changes a little depending on the COL in your area. What you want to avoid is buying somebodies' dog accounts, especially for that kind of money. Link to comment Share on other sites More sharing options...
mission vending Posted April 25, 2014 Share Posted April 25, 2014 You have to look at a variety of factors, age of equipment, brands of equipment, types of accounts, are there contracts w the locations, any other assets involved, any owner financing are a few questions that you need answers to. Probably the most important question is can the revenue be PROVEN. Many vendors selling their routes will tell you something like ,"well I reported this much but this is a cash business you know. " or some BS like that. If it isn't on a tax return it didn't happen. Link to comment Share on other sites More sharing options...
AZVendor Posted April 25, 2014 Share Posted April 25, 2014 Welcome to the forum, NewBvend. You will be so glad you asked your questions here first. This forum has saved many new vendors from making fatal mistakes when they started their businesses. What stands out to me is the wording of "30 machines (drinks and snacks)" and my first thought is that these are imported combination machines. If that's the case then you want to avoid this deal as the seller is trying to recoup his overpriced investment. It could be that he got caught in a biz op scam or bought someone elses problem route and now he can't make any money due to the prices in the machines, the poor quality of machines or the fact that they are too small and he can't possibly put them in accounts that could make any real money. Worst case scenario, these are mechanical turn-the-knob machines that aren't worth $200 no matter how pretty they are. The first thing you need to realize is to not fall in love with the idea of vending and jump at the first opportunity that you think will "put you in business." You need to research each machine or route you see and determine if it's a good investment and if it makes financial sense. All the advice you get here will be from seasoned veterans who all got started the same way you are. Some of us started in the business before there was an advice forum such as this to guide us, so you are getting the experience we have gained from the industry. Please step back and take a breath. Provide the information some have suggested you should provide above and let us evaluate this or any future opportunities you come across. More importantly, don't be in a hurry and spend some days reading past postings here on this forum. You will see that this is the most active vending forum on the net and your possible questions have probably been asked before. Let the search function be your friend. Then ask about anything you can't find on the site as we are here to help you be successful. Link to comment Share on other sites More sharing options...
moondog Posted April 25, 2014 Share Posted April 25, 2014 What kinda of equipment do they have usi,ap, royal or Dixie narco. This is my number one thing in buying another vending company the question is how new is the equipment. How much did they gross last year and what was there profit. A location break down with each stops profits will help also prices of products chips, pastries, and candy this varies some by state. I could answer your question with more info. Tc does make a good point - at the end of the day all you're really getting as hard assets are the machines - you'll never own the accounts. Link to comment Share on other sites More sharing options...
TKK Posted April 25, 2014 Share Posted April 25, 2014 Equipment? Gross? Net? Pricing? Close to eachother? Comission? Link to comment Share on other sites More sharing options...
Rick Posted April 25, 2014 Share Posted April 25, 2014 Funny thing about "personal reasons". All of the sellers I've ever talked to who really WERE selling for personal reasons (divorce and the incarceration of an adult child who needed drug rehab); they did not put that in the sales ad. They just left out the reason they were selling entirely and answered honestly when I asked. Seeing this wording in the sales ad almost implies "Please don't ask me, I don't have a good reason". Which is just suspicious in and of itself. Link to comment Share on other sites More sharing options...
tc vending Posted April 25, 2014 Share Posted April 25, 2014 When our family bought the route it all looked good the economic conditions were great 9 years later we have 5 or 6 original accounts left. The equipment has moved around to more profitable locations thankful it was mostly usi equipment. It could have been rowe's, polyvends, or junk biz op but the people we bought out were good people they helped us into the business. Still learning stuff everyday about vending but moondog's right gross profit is important but if the account is no good you can move the good equipment to a more profitable location. Link to comment Share on other sites More sharing options...
FrCorey Posted April 25, 2014 Share Posted April 25, 2014 sounds like a bizopp route they got tired of. I wouldn't get it unless it's really cheap. bizopp machine companys go out of business fast. and if they were the only parts importer, you are screwed. many people paid thru the nose for these and want to get back their huge investment. unless the locations are locked in by contract too, you can be out on the street fast, Do you know what kind of good machines you can get that are still supported and shopped out for that price from a vending distributor like betson pacific or mountain coin machine? If you want to spend that kind of money, go to a vending distributor. Link to comment Share on other sites More sharing options...
NewBvend Posted April 25, 2014 Author Share Posted April 25, 2014 Welcome to the forum, NewBvend. You will be so glad you asked your questions here first. This forum has saved many new vendors from making fatal mistakes when they started their businesses. What stands out to me is the wording of "30 machines (drinks and snacks)" and my first thought is that these are imported combination machines. If that's the case then you want to avoid this deal as the seller is trying to recoup his overpriced investment. It could be that he got caught in a biz op scam or bought someone elses problem route and now he can't make any money due to the prices in the machines, the poor quality of machines or the fact that they are too small and he can't possibly put them in accounts that could make any real money. Worst case scenario, these are mechanical turn-the-knob machines that aren't worth $200 no matter how pretty they are. The first thing you need to realize is to not fall in love with the idea of vending and jump at the first opportunity that you think will "put you in business." You need to research each machine or route you see and determine if it's a good investment and if it makes financial sense. All the advice you get here will be from seasoned veterans who all got started the same way you are. Some of us started in the business before there was an advice forum such as this to guide us, so you are getting the experience we have gained from the industry. Please step back and take a breath. Provide the information some have suggested you should provide above and let us evaluate this or any future opportunities you come across. More importantly, don't be in a hurry and spend some days reading past postings here on this forum. You will see that this is the most active vending forum on the net and your possible questions have probably been asked before. Let the search function be your friend. Then ask about anything you can't find on the site as we are here to help you be successful. Thanks for the welcome! I'm really impressed with this forum and the experience. I'll be following-up with more details! Link to comment Share on other sites More sharing options...
NewBvend Posted April 25, 2014 Author Share Posted April 25, 2014 Funny thing about "personal reasons". All of the sellers I've ever talked to who really WERE selling for personal reasons (divorce and the incarceration of an adult child who needed drug rehab); they did not put that in the sales ad. They just left out the reason they were selling entirely and answered honestly when I asked. Seeing this wording in the sales ad almost implies "Please don't ask me, I don't have a good reason". Which is just suspicious in and of itself. I agree with your concerns, but no worries here. That wording was not in the sales ad. I actually have had two telephone conversations with the owner (12 years) and he seems legit. Next step will be a sit-down meeting (when I'm ready). Link to comment Share on other sites More sharing options...
AZVendor Posted April 25, 2014 Share Posted April 25, 2014 If they have owned it for 12 years then that's a good start as the business is probably not made up of all biz op type machines. Keep us posted after your meeting with them and bring any questions you have back here for some advice. Link to comment Share on other sites More sharing options...
mission vending Posted April 25, 2014 Share Posted April 25, 2014 Thanks for the welcome! I'm really impressed with this forum and the experience. I'll be following-up with more details! We have some really good guys around here that are more than willing to help..... even those that are a little "out there" at times like moondog..... Link to comment Share on other sites More sharing options...
AngryChris Posted April 26, 2014 Share Posted April 26, 2014 You have to look at a variety of factors, age of equipment, brands of equipment, types of accounts, are there contracts w the locations, any other assets involved, any owner financing are a few questions that you need answers to. Probably the most important question is can the revenue be PROVEN. Many vendors selling their routes will tell you something like ,"well I reported this much but this is a cash business you know. " or some BS like that. If it isn't on a tax return it didn't happen. It may be a mistake in some instances, but I believe a tax return tells a lot. I've seen too many people brag about the business they are selling and how much money it makes. It's too bad they can't give me an accurate sales figure. If it was making SO much money, wouldn't you have a record? And wouldn't you be paying taxes? On the flip side, if they reported 50,000 income from vending last year, I think it's safe to assume they made at least 50,000. Link to comment Share on other sites More sharing options...
AngryChris Posted April 26, 2014 Share Posted April 26, 2014 We have some really good guys around here that are more than willing to help..... even those that are a little "out there" at times like moondog..... Leave those California residents alone. Link to comment Share on other sites More sharing options...
moondog Posted April 26, 2014 Share Posted April 26, 2014 Leave those California residents alone. Thanks Chris - somebodies got to keep the juices flowing around here Link to comment Share on other sites More sharing options...
NewBvend Posted April 30, 2014 Author Share Posted April 30, 2014 Ok, more details: 30 machines all owned and placed at about 12 accounts in a 30 minute radius. Still working to get more details, but the machines are mostly AP and Mars. A lot of older machines (owner has been in business 12 years). Grossed $50K last year. $22K profit. Owner is asking $50K...I think this is steep (in addition to machines, parts, inventory, etc. owner factored about 50% of recent gross in the asking price). Even without the complete details, the big picture seems a bit off. Thoughts? Link to comment Share on other sites More sharing options...
orsd Posted April 30, 2014 Share Posted April 30, 2014 Mars makes DBAs and coin mechs and some control boards on older units not machines or thier machines branded for mars confectionary(mms, kitkat, snickers etc) 12 years isn't too old Link to comment Share on other sites More sharing options...
AngryChris Posted April 30, 2014 Share Posted April 30, 2014 It does sound like too much. If he can prove these numbers with a tax return AND give you a list of every machine he owns, it may be somewhat worth it. 50k in annual sales could generate 22k in profits but it sounds a little exaggerated to me. I bet 25-35k is what you should aim for. It can be a great way to get into the vending business but you won't break even until about 2.5 years. Link to comment Share on other sites More sharing options...
AZVendor Posted April 30, 2014 Share Posted April 30, 2014 It's very common for a route price to begin at 1 year's gross or more, however the value will be determined by a combination of the net, the value of the machines and any other enherent value added for contracts, low commissions, blue sky, etc. If you could post a list of all the machines by model number then we can make a better determination of value. AP machines can be anything from 435's to 4600 to 7600 to 113 to 123, etc., you get the idea. So the machines could be worth a lot or very little. Link to comment Share on other sites More sharing options...
AngryChris Posted April 30, 2014 Share Posted April 30, 2014 Mars makes DBAs and coin mechs and some control boards on older units not machines or thier machines branded for mars confectionary(mms, kitkat, snickers etc) 12 years isn't too old It is if he bought 10 year old machines when he first started his business! That would make the machines 22 years old! I'm not saying they are that old but the length you have been in business doesn't really say anything about the age of your equipment. I have equipment that's almost as old as me! Link to comment Share on other sites More sharing options...
metrovending Posted April 30, 2014 Share Posted April 30, 2014 I would get some business cards printed and take a couple of days to go cold call accounts in your area, your area may be wide open or there may be a couple of good vendors that do it right in your area. Either way this a handy bit of info to know before you drop 50,000.00 If you cant grow and are stuck with your 22,000.00 gross profit...... well that just sucks, you are tied down for minimum wage after expenses. now on the flip side if your area is wide open & you have access to 50,000.00 worth of cash you should pay one of the seasoned veterans on here to come down there and cold call accounts, help you purchase equipment, set up a truck, demographics on accounts, pricing, etc. That would be the best money you could ever spend in vending is to have a veteran help you start from scratch. Link to comment Share on other sites More sharing options...
loach33 Posted June 2, 2014 Share Posted June 2, 2014 now on the flip side if your area is wide open & you have access to 50,000.00 worth of cash you should pay one of the seasoned veterans on here to come down there and cold call accounts, help you purchase equipment, set up a truck, demographics on accounts, pricing, etc. That would be the best money you could ever spend in vending is to have a veteran help you start from scratch. Now see that is interesting. I have been doing this part time for 16 years and I've recently starting to move towards going full time. I'm always on here reading thru the notes from the full time vendors and I've questioned how I can get more profitable with my current setup as well as grow without spending way too much money. I've got to this point with a local locator but I know I have overpaid. No doubt. I'm also pretty sure that I am sitting with a few dogs that I'd like to move as I spend too much time on a $250/ month account. Is there someone on here that will spend a little time or so as a "consultant" as well as a locator? I've never seen anyone even suggest this on this forum before. If so, send me a PM and I'll consider my options. My issue has been the local locator wants to sell new machines too. I'm just looking for someone to set me up in 50-100 person blue collar accounts with a simple pop and snack setup. That shouldn't cost me $1000 plus the machines, right? Link to comment Share on other sites More sharing options...
moondog Posted June 2, 2014 Share Posted June 2, 2014 Now see that is interesting. I have been doing this part time for 16 years and I've recently starting to move towards going full time. I'm always on here reading thru the notes from the full time vendors and I've questioned how I can get more profitable with my current setup as well as grow without spending way too much money. I've got to this point with a local locator but I know I have overpaid. No doubt. I'm also pretty sure that I am sitting with a few dogs that I'd like to move as I spend too much time on a $250/ month account. Is there someone on here that will spend a little time or so as a "consultant" as well as a locator? I've never seen anyone even suggest this on this forum before. If so, send me a PM and I'll consider my options. My issue has been the local locator wants to sell new machines too. I'm just looking for someone to set me up in 50-100 person blue collar accounts with a simple pop and snack setup. That shouldn't cost me $1000 plus the machines, right? RJT is probably the guy you're looking for. He's not a locator but will come down and help you get new business. Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.