Are you investing correctly in your company?

[RJT]

I wanted to touch base on a subject that I feel many operators do not implement correctly. I even see this with large operators sometimes. Their was a company in my area that was fairly large but had outdated older equipment. As time went on other vending operators started getting his accounts because they where offering newer and better equipment. In the end he got pushed out of business because he could not continue to operate with his overhead and because he didn’t reinvest early enough he was forced to sell his company.

 

I also see this with not reinvesting in the necessary upgrades with trucks, freezers, warehouse space, employees, etc. As you grow you will need to make the necessary investments back into your company or you could find yourself in a situation when you can’t afford to upgrade and don’t have the cash on hand to do so. You have to invest in the "future" of your business. Some have a hard time doing this because they try and save (in the end spend) the money and don't have the cash when they really need it.  

 

I get a huge amount of phone calls from people that inquire about my service every week. It amazes me that things I hear from people. I usually get a few different types of phone calls. I get the ones wanting to do the all “healthy” vending, I get the call from people that just bought a few machines or a “route” and spent crazy amounts of money and now trying to figure things out. What’s strange is when I tell them my consulting fees which are very reasonable considering the price and what you get. They where willing to invest a crazy amount of money on some junk equipment or “route” yet didn’t want to invest in the help to get them in a better position from what they got themselves into. They will say “well let me get back with you”. I usually never hear back from these people. As the old saying goes it is easier to fool people than to convince them they have been fooled.      

 

I have been working with an operator (that used to participate on here often) over the past three years or so. He would hire me to come in on site and help him about once a quarter. I have helped and seen him grow from one man and a truck working out of a storage unit to now having a large warehouse, full time route driver, part time warehouse person, two route trucks, panel van, walk in freezers/coolers, extra equipment, he is getting ready to hire another part time to full time route driver, etc. All while he sacrificed his own salary in order to grow. He has pretty much new or like new equipment at all his locations, and looking to upgrade his current route trucks. While I would like to take much of the credit to his success it would not have been possible without his ability, talent and get it done attitude. He knew he had to reinvest and reinvest correctly to grow his business and be competitive with his competition. Many don’t have the discipline or forethought to grow a business this way.

 

Make sure you are investing and reinvesting in your company or it will slowly die a slow death.  

 

Just as an FYI here are a couple threads when I started helping this vendor starting back in 2012.

 

http://vendiscuss.net/index.php?/topic/9517-my-experience-with-pro-vending-consultants-rjt/

 

http://vendiscuss.net/index.php?/topic/11276-round-2-with-pro-vending-cousultants-rjt/

 

 

[BouncyBalls]

Common sense to me, I guess others it is not.

[RJT]

Common sense to me, I guess others it is not.

 You would be surprised at how many I talk to that make these mistakes. Also goes back to me always harping on revenue averages because in order to reinvest in your company you will need certain amount of profits to accomplish this. Part of that investing in your company involves investing in the right accounts. It is hard to reinvest when you have low averages. The cash flow is just not there to invest. Even with good averages you will have "growing pains" as you reinvest that you will have to work through. 

[PHX1]

I wanted to touch base on a subject that I feel many operators do not implement correctly. I even see this with large operators sometimes. Their was a company in my area that was fairly large but had outdated older equipment. As time went on other vending operators started getting his accounts because they where offering newer and better equipment. In the end he got pushed out of business because he could not continue to operate with his overhead and because he didn’t reinvest early enough he was forced to sell his company.

 

I also see this with not reinvesting in the necessary upgrades with trucks, freezers, warehouse space, employees, etc. As you grow you will need to make the necessary investments back into your company or you could find yourself in a situation when you can’t afford to upgrade and don’t have the cash on hand to do so. You have to invest in the "future" of your business. Some have a hard time doing this because they try and save (in the end spend) the money and don't have the cash when they really need it.  

 

I get a huge amount of phone calls from people that inquire about my service every week. It amazes me that things I hear from people. I usually get a few different types of phone calls. I get the ones wanting to do the all “healthy” vending, I get the call from people that just bought a few machines or a “route” and spent crazy amounts of money and now trying to figure things out. What’s strange is when I tell them my consulting fees which are very reasonable considering the price and what you get. They where willing to invest a crazy amount of money on some junk equipment or “route” yet didn’t want to invest in the help to get them in a better position from what they got themselves into. They will say “well let me get back with you”. I usually never hear back from these people. As the old saying goes it is easier to fool people than to convince them they have been fooled.      

 

I have been working with an operator (that used to participate on here often) over the past three years or so. He would hire me to come in on site and help him about once a quarter. I have helped and seen him grow from one man and a truck working out of a storage unit to now having a large warehouse, full time route driver, part time warehouse person, two route trucks, panel van, walk in freezers/coolers, extra equipment, he is getting ready to hire another part time to full time route driver, etc. All while he sacrificed his own salary in order to grow. He has pretty much new or like new equipment at all his locations, and looking to upgrade his current route trucks. While I would like to take much of the credit to his success it would not have been possible without his ability, talent and get it done attitude. He knew he had to reinvest and reinvest correctly to grow his business and be competitive with his competition. Many don’t have the discipline or forethought to grow a business this way.

 

Make sure you are investing and reinvesting in your company or it will slowly die a slow death.  

 

Just as an FYI here are a couple threads when I started helping this vendor starting back in 2012.

 

http://vendiscuss.net/index.php?/topic/9517-my-experience-with-pro-vending-consultants-rjt/

 

http://vendiscuss.net/index.php?/topic/11276-round-2-with-pro-vending-cousultants-rjt/

Very good points RJT, when I first started doing vending I reinvested most of my profit back into my business. The equipment you use and vehicles you drive are what customers make your business out to be. This is why you must use well kept newer machines along with newer model trucks that are kept looking good if you want to play with the big boys.

[RJT]

Very good points RJT, when I first started doing vending I reinvested most of my profit back into my business. The equipment you use and vehicles you drive are what customers make your business out to be. This is why you must use well kept newer machines along with newer model trucks that are kept looking good if you want to play with the big boys.

 

Thanks!!

 

I agree 100%. I hear all the time and even on here that they feel like they cant get the good accounts or "compete with the big boys" or "the good accounts are sewed up by the big vendors" etc, etc. No matter the size of your company if you look and act like a well ran, organized, and professional company people will do business with you. It is not hard you just have to be dedicated and educated to that fact and do it. Vending has never been a get rich type business. The truth be known you will never be "rich" at it but you can make a very nice living if done correctly. With that is going to take some sacrifices like you made in the beginning to get there. 

[AngryChris]

I have reinvested as much as I could. That's what makes for the difficult balance between growth and paying yourself. When you start small, you can rely on a full-time income from a job while you reinvest the profits. You eventually reach a size where you must make a decision to go full-time vending or stop growing and stay as a part-time vendor. Once you switch, reinvesting can become challenging. I switched during a difficult point but I barely got through it and I'm full steam ahead now. The only thing holding me back are the two-year loans I pay. Payments are steep but the reward comes much faster.

[RJT]

I have reinvested as much as I could. That's what makes for the difficult balance between growth and paying yourself. When you start small, you can rely on a full-time income from a job while you reinvest the profits. You eventually reach a size where you must make a decision to go full-time vending or stop growing and stay as a part-time vendor. Once you switch, reinvesting can become challenging. I switched during a difficult point but I barely got through it and I'm full steam ahead now. The only thing holding me back are the two-year loans I pay. Payments are steep but the reward comes much faster.

 

That's why it is crucial that you have solid accounts with good revenue averages. I hate beating the dead horse but you can only accomplish solid growth with good profits from your existing business. The more profit the more you have to put back in the business and pay yourself. That's why I have always said if you cant average that $100 per machine per week it is tough all the way around. Obviously other things have to be in place also like correct wholesale pricing, correct sales price, etc, etc. 

 

Also a solid sales plan for growth. You have to have a sales strategy to constantly go after the quality accounts. The sales cycle in vending can be sloooow so you had better have a steady supply built into your pipeline at all times. I have accounts right now either for myself or for clients that we have been working on for over 3 months since the proposal was turned in. Total time in so far probably 6 months. While this is not typical every time it is not unheard of either. 

[orsd]

Very good points RJT, when I first started doing vending I reinvested most of my profit back into my business. The equipment you use and vehicles you drive are what customers make your business out to be. This is why you must use well kept newer machines along with newer model trucks that are kept looking good if you want to play with the big boys.

Key operative being well kept... Leave it to Canteen to make new merchant medias and GIIIs as reliable as a Seaga.

Also stepvans ftw... Things are fing timeless.

[AngryChris]

I like stepvans but I prefer my cube van for several reasons. I believe they are superior for vending from a business point of view, but I think stepvans are better for drivers.

[PHX1]

Thanks!!

 

I agree 100%. I hear all the time and even on here that they feel like they cant get the good accounts or "compete with the big boys" or "the good accounts are sewed up by the big vendors" etc, etc. No matter the size of your company if you look and act like a well ran, organized, and professional company people will do business with you. It is not hard you just have to be dedicated and educated to that fact and do it. Vending has never been a get rich type business. The truth be known you will never be "rich" at it but you can make a very nice living if done correctly. With that is going to take some sacrifices like you made in the beginning to get there. 

You bring up another point RJT. Even though I am a two man operation, I never let my clients or future clients know that. I offer the same stuff the big guys do. I act as if I am a large company even though I am not.

[RJT]

You bring up another point RJT. Even though I am a two man operation, I never let my clients or future clients know that. I offer the same stuff the big guys do. I act as if I am a large company even though I am not.

 

IMO it is not a matter of "acting" like a large company it is a matter of being competitive. Even though the larger operators do things a certain way no one says you have to be large to do the same thing. 

 

Lets look at a totally different business for a minute. Lets take Chick Fillet which is considered a large company. They do things a certain way by offering good food, a consistent product, good service, etc, etc. Now lets take a local BBQ joint in my area. He is a one location "mom and pop" business. He has them lined out the door everyday. He has won numerous awards, write ups,TV features, famous folks eating there, etc, etc. Why? because he does it the right way like the Chick Fillet does. On his on level he can and does compete with the large companies everyday and does a great job. Part of that is the folks he hires and how he takes care of them. He has folks that have been there 20 plus years.   

 

I think that many think they cant compete with the larger operators say that or settle for that only because they don't have the knowledge to do it at that level. Everyone starts from the bottom (most times) and has to figure it out but the idea that you just cant compete is just foolish talk. It can and is done everyday just like the BBQ joint or other small business owners that do it in vending or other types of business.

[cblomqui]

Where you choose to reinvest your money makes a big difference. For me, I think technology is good place to focus on. People are so reliant on smartphones and other tech nowadays that vending machines start to look outdated. I feel like kids see a vending machine without a card reader and don't want to even bother finding money for it, not that they ever have money on them anyway. Add the ability to pay with a smartphone and they'll probably jump at it. I feel some sort of vending machine software might be worth some attention as well.

 

I agree that jumping the gun at healthy vending opportunities or other "fad" or niche markets probably won't pay off.

[AngryChris]

I don't think paying with your smart phone is a big thing in the states yet. Sure, some minor kids might think it's cool, but they'll be in for a surprise when they or their parents see the bill. Things like mobile wallets and PayPal seem like a growing trend but I don't think people want to fool around with that yet. If you are talking about a large community college like a local one here, that makes sense to do, but they have some 25,000 students and something in the range of 100 machines. Not something I'd ever mess with.

Credit card readers are here for a while though.