7 Ways to Boost our 2009 Profit

[markvend]

In thinking about 2009 and how to boost net profit, I want to throw out some suggestions here.  Many of these have already been mentioned in other posts but I thought it might help us to have these particular ones together to think about.

1) Get machines placed in the field - This is an obvious one but probably the best way to get our profit up the most.  Unplaced machines make no money!  For a quick way to get machines out, look at your good accounts and see if you can double a single or add one to a double in your good accounts.  You can always move it later if it doesn't produce.

2) Examine the products you're selling, especially your cost per vend - we've talked about this a lot lately especially on the subject of M&M Peanuts and other candy cost increases.  You may want to eliminate this product unless you are selling high volumes in certain locations.  You may also want to look at cashews, nuts, and other products too.  You can sell far less gumballs to net the same profit IF you can find a location which is not already overloaded with them.

3) Re-examine your route structure.  Are you running yourself ragged for a few extra dollars?  You may want to consider expanding your route closest to you and dropping your "stragglers" the farthest out.  I don't believe low gas prices here to stay.  Now would be a great time to get into the position you want to be while gas prices are low. You may even consider buying out a competitor who is in the territory you want to expand in and selling off your farthest routes. 

4)  Examine your service schedule cycles.  One blessing of the high gas prices for our company was that it forced me to really look at extending the service times of our route cycles.  I was able to add several weeks onto the cycle without sacrificing customer service.  In some places I added slightly bigger machines to keep them from going empty.  In other areas I developed a subroute within a route where I serviced those machines in the subroute at a cycle and a half's time (if you are on an 8 week cycle the subroute would be every 12 weeks).  This saved me much TIME and money on servicing expenses and enabled me to manage and locate more machines.  Every time you leave home to service it costs you money.  If you can do this less times per year, maintain your sales, and provide good customer service, you can effectively raise your net income.

5) Examine all your expenses.  What we are after is NET PROFIT not necessarily higher sales.  You can have higher sales without any more net profit.  If you cut expenses and sales remain consistent, you have increased net profit.  We may be able to cut expenses by ordering product different places, cutting office expenses, using a different vehicle, changing the product we sell, extending service cycles, etc.

6) Change your product portions - this touches on #2 above.  You can decrease the amount of product you vend per sale.  This can have a huge difference especially if you have several machines.  You can in effect offset some of the product price increases if you do this.  There is a limit to how far you can go (we have had many discussions about this on the board).  You will have to determine in your leadership capacity what will work for you, but this is a high priority area to change your net profit.  For those who sell gumballs exclusively, you can also change the gumball size to change your net profit (some machines are easier than others.)

7) Consider investing as a tool to increase your profits - This is an area that needs to be looked at too.  It may be as simple as investing in hiring a locator to place your machines if you cannot or will not do it yourself.  This would be an investment in the business that would pay off (if you don't get scammed using a locator!) because you would immediately get your machines working for you.  You can also invest in other areas (besides vending) with your proft from vending to help multiply your profits.  This might even be paying off credit cards which would help your personal monthly cash flow.   Most people would probably think along the lines of buying more machines or entering another part of vending such as racks, full line vending, or crane machines.  Regardless, thinking about how to multiply your money is great practice for the business owner.  It helps you to see greater opportunities both inside and out of the field of vending.

I hope these ideas help.  Hope everyone has a very prosperous 2009 sales year!

Mark

[caserri]

**Sniff, Sniff.**  

The sweet smell of POTD.

Thanks Mark.

Steve

[davidsurvz]

NICE!!!!

Definitely a winning post!

[caserri]

NICE!!!!

Definitely a winning post!

I would say so. 6 votes right now. Thats got to be a record.

Steve

[lurtsman]

I really like this one. As someone who is new and struggling with understand Iowa's very strange laws, it can get depressing trying to get started. I love seeing ideas like this. The price of PPM sure caught me off guard as it was going to be one of my big items.

I'll be looking into Boston Baked Beans instead now--though I do have quite a few bags of PPM I had purchased already for getting started.

[BluePlate]

Horay for Mark!

[markvend]

Lurtsman,

Let me know if you get anything going on the Baked Beans. I've tried them a few times and they end up with the sales drying up after a few months. I've only tried them in maybe 3-4 machines. Only 1 Sams has them in my geographical area and they did not keep long-term very well. I ended up tossing several extra bags I bought because the nuts were old.

Thanks,

Mark

[chris harris]

Good info.

Chris