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Update on recent changes to my business


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I think many of us like to know what goes on when someone grows their business.  It's very interesting to see how people made it happen and I know that I am definitely one of those people that likes to know, so I figured I would share my general situation.

 

Early last month, I bought myself a new cube van.  Initially, I knew that the cargo capacity of the truck was approximately 2 times the capacity of my previous small step van.  However... after using it for as little as one week, I saw that the realistic capacity was much greater than the step van because it had a much better setup.  I could stack things much better in the cube van because the box is so much wider.  About 1/3 of the stepvan was open space to allow a walkway, and that walkway was still quite narrow which made it hard to grab cases and carry them back.  The cube van can easily hold about 4 cases-wide on the floor and still leave ample room to walk through, which is twice what I could do in the step van.. but the cube van is also 33% longer which means that the truck is realistically about 3x the capacity due to the setup.

 

Having more capacity is certainly useful, and it has added several benefits such as these:

 

-I can stock up on enough bottles and snacks to last about 1 week at a time, but I don't feel comfortable stocking 1-week's worth of soda just yet.  In the end, I am only restocking about 2 times each week with no need to stop at gas stations, grocery stores, or other places to pickup stuff that I ran out of.  This saves a LOT of time, a little fuel, and it makes the job way more enjoyable.  Oh, and the fuel capacity is 2x as well!

 

-Although my fuel and product expenses have spiked in March, that's because I had a lot of catching-up to do.  I also added a few more machines that are about 15 miles away from the nearest existing accounts and that has added some miles to my route.  In the end, I expect my overall automobile expense to be no more than it was with the stepvan.  This isn't a "benefit" as much as it is the result of other benefits.

 

-I have started to restock machines faster than before.  Not only do I stock machines faster (because I am able to get my snacks and soda loaded onto the dolly faster), but I generally get to my first stop without having to stop at Sam's Club every morning.  Before, I could probably do 18 machines in a day, but that would have been a long and gruesome day as every delivery day (4x/week) involved stopping at Sam's Club, getting fuel, and working out of hot, tight conditions all day.  Now, I get to my first stop around 8:30am and I often don't quit working until around 6pm.  This allows me to restock a lot of machines in a day.

 

-I have saved a LOT of time.  I have saved so much time that I actually dedicate Fridays to repairs, maintenance, and general shenanigans.  In fact, I am about to make every other Thursday one of those shenanigan-having days!  This doesn't even consider the fact that Mondays are honor boxes out of my car.  This leaves a lot of room for expansion in the future if I desire.

 

-As I sort of stated earlier, my sales have slightly increased by maybe 10% or so.. probably because I stock everything properly.  I can carry a little more tools, more coin mechs and validators, and way more product (and more varieties) so I can delivery what my customers want and I often have what they want when they request it on the spot.

 

-I am happier!

 

Overall, getting this truck has been huge for me.  I am saving a lot of time.  I'm probably saving a little bit of money but that's hard to measure, but the fact that my sales seem to be increasing because things aren't sold-out anymore, this more than makes up for any potential additional costs for having a larger truck.  The truck actually gets the same gas mileage that the stepvan got so that's not really a factor (about 10.5 mpg).

 

I think the next plan is to dedicate the next two years to more expansion and then take a break once I begin grossing around 3,000/week.  That's around the time that I make serious decisions regarding whether I want to expand more, hire someone, or anything else.

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You should be able to handle $7-8000 per week with a cube van and good accounts so just getting to $3000/wk won't max you out at all unless you have marginal accounts that are too spread out and cost you too much time.

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You should be able to handle $7-8000 per week with a cube van and good accounts so just getting to $3000/wk won't max you out at all unless you have marginal accounts that are too spread out and cost you too much time.

 

Yeah I'm not worried about being maxed out Randy.  I just know that at 3,000/week, I will make enough money to live comfortably without having to worry about any employees, operational costs, commercial buildings, having time for repairs and machine moves, and anything else.  $3,000/week will allow me to still have as much as one business day off most weeks.  I'm not the type of person that really likes to HAVE to work 50+ hours/week.  If i choose to move onto 5,000-6,000/week, I will be forced into getting a commercial building and hiring someone part-time for various tasks.  The plan is to hire my mother when she retires but she still has something like 9 years to go.

 

I just want to be able to live for once!

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Yeah I'm not worried about being maxed out Randy.  I just know that at 3,000/week, I will make enough money to live comfortably without having to worry about any employees, operational costs, commercial buildings, having time for repairs and machine moves, and anything else.  $3,000/week will allow me to still have as much as one business day off most weeks.  I'm not the type of person that really likes to HAVE to work 50+ hours/week.  If i choose to move onto 5,000-6,000/week, I will be forced into getting a commercial building and hiring someone part-time for various tasks.  The plan is to hire my mother when she retires but she still has something like 9 years to go.

 

I just want to be able to live for once!

 

Chris, it sounds to me like we are cut from the same cloth. Your goals sound like my goals!! I don't want to take over the world, but just have a descent income and to be content with it.

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I'm a family man first, business man second, and vending operator third. There's no guarantee that I won't get burnt out from vending. If it keeps me happy though, I'll stick with it for a long time

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I'm a family man first, business man second, and vending operator third. There's no guarantee that I won't get burnt out from vending. If it keeps me happy though, I'll stick with it for a long time

Give this man a cookie
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Box trucks are my favorite. Super comfy, great power. I stock a whole weeks worth on it with no worries. Plenty of room for two of us grabbing items. I can easily expand w it. Right now im at 3k a week gross and all items fit just fine servicing once a week. Ive started to top off many machines and helps spending less time servicing. I just got 3 accounts which im actually dreading because im always up and down with full time student

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Just had this thought when reading TKK at 3k gross.    What are you guys at in terms of net?   I'm talking take your gross and subtract cost of goods, sales tax, repairs, supplies and insurance.   What's that profit compared to gross.   Mine is 35% year after year.

 

Just wondering if that's good, bad or indifferent.  Obviously repairs can swing wildly but it averages out to that.  

 

Take only cost of goods and sales tax off and it's 40% year after year

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Mine is usually about 4k cogs and about $100 gas. $500 comission for the 2 locations, about $500 for taxes. So keep 6 to 7k or so......ofcourse still have repairs every now and then, maintanence etc. For every 800 more in income i figure i need atleast 1400 to 1500 in sales

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What about fuel? Depreciation?

Of course there's other costs.  I was trying to keep it simple.   So, add cost of goods and sales tax.  Divide that number by gross sales.  40%?  Higher, lower?

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Do you mean... add COGs + sales tax... then subtract it from gross.... then divide by gross?

 

Doing it this way... I came out to about 35%.

 

My historical profits are quite low because I reinvested everything on repairs, updates, moving equipment, and various other things that cost quite a bit upfront but you don't see a big gain until several years later (such as updating machines that have no validator or an obsolete validator).  Much of the equipment that I bought was on-location when I purchased them so I got a lot of equipment that needed money put into it.  Almost everything worked as it was designed to but things like ARDAC and MAKA validators are about gone from my routes.  In fact, I have ONE ARDAC validator and maybe 5-6 MAKA's on my entire route.  I couldn't tell you how many MARS VN's I have but it's quite a lot.  I also have many Coinco BA's.

 

Also, I buy groups of accounts often and there is an initial investment on snacks and soda.  Those costs are big upfront but they level off within a month or two.  This isn't that big of a deal but it skews my numbers from one month to the next.  That's why, once we hit the end of the year, I pretty much start to let everything sell out almost completely.  It's like starting over and I reap big profits in December and January but then I get hit hard in February and March when I have to stock everything up for the continuing cold Winter weather and also prepare myself for warmer climates which will cause people to hammer the soda machines.

 

Using that formula (Revenue - (COGs + sales tax)) divided by Revenue, I expect to stay around 35% for much of this year.  Some months will be better and some worse depending on which bills are due.

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