Parrothead Posted December 5, 2014 Share Posted December 5, 2014 Hey guys, haven't been on the forum in forever. I was hoping you guys could give me some advice. When I was in high school (last year) I started in the vending business with two bulk machines. I am now in college, but still operate the two that I have back home (paying my sister to check them once a month). Recently, an opportunity has come up for me to purchase a snack route that is not too far from my school (about 50 minutes), considering it is in the middle of nowhere. The route is in two areas, but one area is on the way to the other, which is the one that is 50 minutes away. I wanted to get you guys opinions on whether or not you think it would be a good buy. The Machines: (2) Rowe 4900sr with update kits (1) Snacktron 1 (1)USI Model 3054 (1)USI Model 3129 (1)Crane Model 147 (1)FSI Model 3013A For a total of 7 machines. Potential Problems I Can Forsee: As a freshman, I am not allowed to have a car on campus. According to the owner of the route, the further away section of the route (50 minutes) is serviced biweekly and the closer section (30 minutes) is serviced weekly. Due to the distance, I would have to hire an employee who lives in the area to check the machines, which could be difficult since it is a cash business and not everyone is honest. I am not against the idea of having an employee. I realize that it would cut into my profits, but as long as I am still profitable, I think it is better than having my money sitting in the bank not doing anything. If I choose to, I can go to checking the machines myself next year, as I will have a car then. Another factor to consider is that since I will be in college, there will be times when I am busy, but I think I will be able to balance my time efficiently between school and the route ( a benefit of having an employee). So here is more information on the route: She is asking $6500 but is willing to negotiate. I have already decided I am not going to pay this much, as I do not feel it is worth that much. She is willing to let me pay a sum up front (unspecified as of yet) and pay off the rest over a 12 month period. 4 machines are in high schools, which are subject to government health regulations. 2 are in banks. 1 is in a retirement home Machines are not under contract 10% is paid to 2 of the schools , and 5% is paid to the other 2 schools She sent me spreadsheets of the last three years as well as an expense sheet. I have attached the spreadsheet from 2014 and expenses from 2014. If you would like me to post the other years as well, I can do that. From 2012 to 2014, her net profit has been almost cut in half (from about $6000 to about $3000). She claims this is due to the new health regulations at the schools and the kids not being as crazy about the healthy snacks, but she says profit is slowly rising. I have no way to know if that is true, so I am going to base my decision on the idea that profit is not increasing. According to her, the route averages $1270 per month in gross profit. She spends about $450 in inventory. I think I have included all the information that I have, so my questions are these: Do you think this is an overall good buy? What other information should I request from her before I make an offer? Does anybody have any advice about hiring employees, or have any alternative suggestions? And does anyone have any general advice that they would like to give? If there is any more information you need , just let me know, and I'll try to find it out. Thank you so much for any and all advice you have to offer! I really appreciate it! Layton Link to comment Share on other sites More sharing options...
Golfdogs Posted December 5, 2014 Share Posted December 5, 2014 Hey guys, haven't been on the forum in forever. I was hoping you guys could give me some advice. When I was in high school (last year) I started in the vending business with two bulk machines. I am now in college, but still operate the two that I have back home (paying my sister to check them once a month). Recently, an opportunity has come up for me to purchase a snack route that is not too far from my school (about 50 minutes), considering it is in the middle of nowhere. The route is in two areas, but one area is on the way to the other, which is the one that is 50 minutes away. I wanted to get you guys opinions on whether or not you think it would be a good buy. The Machines: (2) Rowe 4900sr with update kits (1) Snacktron 1 (1)USI Model 3054 (1)USI Model 3129 (1)Crane Model 147 (1)FSI Model 3013A For a total of 7 machines. Potential Problems I Can Forsee: As a freshman, I am not allowed to have a car on campus. According to the owner of the route, the further away section of the route (50 minutes) is serviced biweekly and the closer section (30 minutes) is serviced weekly. Due to the distance, I would have to hire an employee who lives in the area to check the machines, which could be difficult since it is a cash business and not everyone is honest. I am not against the idea of having an employee. I realize that it would cut into my profits, but as long as I am still profitable, I think it is better than having my money sitting in the bank not doing anything. If I choose to, I can go to checking the machines myself next year, as I will have a car then. Another factor to consider is that since I will be in college, there will be times when I am busy, but I think I will be able to balance my time efficiently between school and the route ( a benefit of having an employee). So here is more information on the route: She is asking $6500 but is willing to negotiate. I have already decided I am not going to pay this much, as I do not feel it is worth that much. She is willing to let me pay a sum up front (unspecified as of yet) and pay off the rest over a 12 month period. 4 machines are in high schools, which are subject to government health regulations. 2 are in banks. 1 is in a retirement home Machines are not under contract 10% is paid to 2 of the schools , and 5% is paid to the other 2 schools She sent me spreadsheets of the last three years as well as an expense sheet. I have attached the spreadsheet from 2014 and expenses from 2014. If you would like me to post the other years as well, I can do that. From 2012 to 2014, her net profit has been almost cut in half (from about $6000 to about $3000). She claims this is due to the new health regulations at the schools and the kids not being as crazy about the healthy snacks, but she says profit is slowly rising. I have no way to know if that is true, so I am going to base my decision on the idea that profit is not increasing. According to her, the route averages $1270 per month in gross profit. She spends about $450 in inventory. I think I have included all the information that I have, so my questions are these: Do you think this is an overall good buy? What other information should I request from her before I make an offer? Does anybody have any advice about hiring employees, or have any alternative suggestions? And does anyone have any general advice that they would like to give? If there is any more information you need , just let me know, and I'll try to find it out. Thank you so much for any and all advice you have to offer! I really appreciate it! Layton My advice? Concentrate on school. Get your degree. Sow your entrpreneurial skills after college. And most of all, have fun! You are only young, once. Link to comment Share on other sites More sharing options...
AZVendor Posted December 5, 2014 Share Posted December 5, 2014 I agree with Golfdogs. This "deal" is not going to work out well for you and I don't need to go into any details. While I admire your entrepreneurial drive, you need to concentrate on and finish your schooling so you can make a more informed decision as to what you will do after college. I can't imagine how you would have a full load of classes and still have free time to run a vending route, but maybe you aren't having enough fun in school. Enjoy it while you can and make this experience one that you will remember the rest of your life. You only get to do this once and you should relax and just do school. Link to comment Share on other sites More sharing options...
moondog Posted December 5, 2014 Share Posted December 5, 2014 You've got a bunch of fairly old machines there and doing snacks is time intensive - I'd pass on this and get yourself a couple of local soda machines if you're interested in branching out Frankly, I won't place a snack machine if I don't get the soda account to go with it. Link to comment Share on other sites More sharing options...
Parrothead Posted December 5, 2014 Author Share Posted December 5, 2014 Thanks for the advice guys! After thinking about it, I think the distance is too far to be worth it. I am going to try to find some local locations or find some other way to invest my money. Figuring out ways to make money is something I enjoy so I wouldn't be happy focusing solely on school haha! Currently I am running my eBay business from my dorm room I'm just trying to branch out a little. And don't worry I have plenty of fun on the weekends Link to comment Share on other sites More sharing options...
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