To buy or not to buy

[MunchieBiz]

Hello everyone, glad to have found this forum as I am considering leaving my teaching job to purchase an existing honor box business. Read through six pages of vendingbutler1's screed against investing in honor boxes, and am still here because it seems that most of you are doing well with this.

 

I'm trying to get an idea of the following:

 

1) Can I actually support myself with an honor box business working 40-45 hours a week? And beyond that, can I not only just support myself, but earn decent discretionary income?

 

2) What is a fair price per account?

 

In a nutshell, the business currently has around 300 accounts, with approx.12 machines (owned), 2 soda machines (serviced only), and the rest honor boxes. Purchase includes van and equipment (coin counters, approximately 12 vending machines, and a slew of snack boxes).

 

Accounts are serviced every 2 weeks. I ran a route one day with the owner (1-man operation), and we took in over $400 on about 30 stops. I've done enough research to know that I can expect average shortages of around 15-20%.

 

I would like to get an idea of a fair market value for this business, and also some reassurance that I wouldn't be making a huge mistake by giving up a fairly(?) secure job with decent benefits, and a large chunk of cash which would otherwise go towards retirement or some other investment, for a business that's might take all my time and money and leave me disheartened. Hey, I know any business is work, and I'm not afraid of that, but I'm pushing 50 and figure I have a good 15 years to make this work. My goal is to increase my quality of life and have a decent retirement where I won't have to choose between food and medical care, and still be able to take a class now and then and live in a nice, warm, sunny place.

 

For the record, I make a little over $50k now, and the job pays a decent percentage of my health care premium. I would like to make at least $75k a year over and above what I put back into the business.

 

Please share your thoughts on valuation and what I can realistically expect in terms of business and personal income. Any input is appreciated!

[rodney69]

It will be good to hear from some of the Vet's on here. I will tell you one thing, if you put 40-50 hrs a week into vending and you follow the advice on here, it would be hard to miss!

 

If you want to make about 75k proffit, you'll need more size. If you are comfortable locating yourself it will save you money that you could buy more boxes with. 

 

another thing, if you do buy it, make sure that you go to EVERY stop with him and look at it all, look at bank records and everything. If any of it doesn't match, then it's not worth it. 

 

For instance, new I think boxes are around 3.50 ea new times 300 is 1050, if you locate your own there's only product cost after that, if you hire a locator it's an added 28.00 per stop which adds up! 

 

So the question would be what type of machines are included in the deal, age, and how much do they make? Not just one month, but every month. Then the total amount will give you a better idea on what it's worth. 

Most shoot for gross receipts in 10 moths or 6 if you can.

 

So after you add up the cost of starting new including product and locating if you use one, vehicle at 20% below blue book, then you have a better idea.