kai1836 Posted November 27, 2008 Share Posted November 27, 2008 Once you have been in this business for some time how easy is it to finance growth with debt? How many of you have debt in your business now? Seeing how this is a cash business I was wondering how prevalent debt is....... Link to comment Share on other sites More sharing options...
alyssamma Posted November 27, 2008 Share Posted November 27, 2008 Kai, I can answer this from a general business perspective. Unless you have a very large corporation, banks will look at your personal finance statements when determining whether or not to lend to you. So, "how easy" it is really depends on your personal credit score. In other words, the business makes no difference - other than showing the banks an additional stream of income. Kevin Link to comment Share on other sites More sharing options...
Outlander Posted November 28, 2008 Share Posted November 28, 2008 Kai, The best advice I can give you is to stay away from debt if at all possible, especially in times like these. Grow slow if you have to but grow. Re-invest everything you can back into your business until you get to the level you want, you will find it will grow quick enough if you look for the deals and place your own machines. Don't keep poor producing locations, they waste your time and eat your profits. This is not to say move a location if you still have machines sitting in your garage. Best of luck. Link to comment Share on other sites More sharing options...
kai1836 Posted November 28, 2008 Author Share Posted November 28, 2008 Thanks outlander......the reason I ask is I was looking over coinstars financial info and saw that they have a good chunk of outstanding debt. While I realize they are a public company I was just curious if financing growth with debt is common with vendors. Thanks. Link to comment Share on other sites More sharing options...
BluePlate Posted November 28, 2008 Share Posted November 28, 2008 I think one of the great thing about this business (bulk vending) is the possibility of growing without debt. There is plenty of used machines that can be picked up on the cheap. Also, think financing is difficult to obtain in the bulk vending business. Many Financial businesses would look at the this business as not a good investment. As far as Coinstar, I would assume their debt is from development of the equipment. I don't think they called gumballs.com and bought the Coinstar or Redbox machines. The Redbox was a Thanksgiving dinner discussion, the general thought was this will give Netflicks and Blockbuster a run for their money. Link to comment Share on other sites More sharing options...
kai1836 Posted November 28, 2008 Author Share Posted November 28, 2008 Doesn't seem to be working out for them.......they have made a loss for the last several quarters and the stock is at a 52 week low. Link to comment Share on other sites More sharing options...
dperry Posted November 28, 2008 Share Posted November 28, 2008 Kai, I started out in this business with debt. I had a $500 credit card with which I used to make my first purchases. That got me to about 8 machines. The next year I got a $1500 loan from prosper.com and got another 15 machines. Last year my brother financed me for $1000 with a really good loan and that got me another 10 machines. With those loans and my own growth, I am at 40 machines. I don't think I would be here at this stage without some debt to begin with. If I had kept growing with only the income from the initial 8 machines, I would prolly only be at about 20 instead of 40 machines. My CC is paid off, and next year my loans will be paid off. Once that's done I will have 40+ machines with no debt. Link to comment Share on other sites More sharing options...
AmuseStar Vending Co Posted November 28, 2008 Share Posted November 28, 2008 Once you get to about 50 units, the income from these will help buy new machines each month. I always have looked at things on a "Go Big, or Go Home" scale. Debt is just a small amount in this business. Once you get past the start up cost, your in the clear (This is why most get to 10-12 machines and quit). If you don't have enough machines out, there is no way you can grow without debt. Kyle Link to comment Share on other sites More sharing options...
kai1836 Posted November 28, 2008 Author Share Posted November 28, 2008 Thanks Kyle......Im approaching that number now. I have to get this rack out and I am picking up more machines next weekend. Some unexpected things happened this past week and have me needing different equipment. Link to comment Share on other sites More sharing options...
AmuseStar Vending Co Posted November 28, 2008 Share Posted November 28, 2008 I would advise you to break the rack down. No location will ever need 12 heads (Besides where it came from, Wal Mart, of course). I would break it down into smaller racks, or even single stand units. You will make more money this way. Kyle Link to comment Share on other sites More sharing options...
shvend Posted November 29, 2008 Share Posted November 29, 2008 I would advise you to break the rack down. No location will ever need 12 heads (Besides where it came from, Wal Mart, of course). I would break it down into smaller racks, or even single stand units. You will make more money this way. Kyle Kyle depending on the type of location you get depends if it needs 12 heads or not. I have several 12 head stands out. The locations they are in would not carry thereselves through the service cycle if not for all the heads on the stand. So see what kind of location you have before you start busting up racks! Link to comment Share on other sites More sharing options...
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