Magiccity726 Posted June 20, 2016 Share Posted June 20, 2016 I'm not considering selling my route now but just thinking long term. Can I sell my business even if I don't have contracts for the majority of my locations? In this case I would just be selling machines that are at a location. How much would this decrease the value of my business? How would you determine the value of the business? Any input would be greatly appreciated. Thank you. Link to comment Share on other sites More sharing options...
AZVendor Posted June 20, 2016 Share Posted June 20, 2016 If you're selling just the machines due to a lost account then you'll have to sell them at used, not location ready, machine prices. Whether they work and look good or not, someone will need to do work on them to make them location ready. If you're dumping accounts that don't do much then you can probably only get the equipment value for them but if the accounts do good volume you can ask as much as you want with 12 month's gross being a good starting point. If you had contracts that might be worth more to some buyers but 80-90% of locations aren't under contract anyway. To get maximum value you need good product prices (from the vendor's standpoint), low commissions, fully working and lit machines with validators on all. Link to comment Share on other sites More sharing options...
Magiccity726 Posted June 20, 2016 Author Share Posted June 20, 2016 Thanks AZVendor! Im expanding and prefer to have contracts but most locations prefer not to sign. Link to comment Share on other sites More sharing options...
Southeast Treats Posted June 20, 2016 Share Posted June 20, 2016 If you are looking at your exit strategy (selling the whole thing when you are ready), the contracts are a minor issue in my view, since very few locations will have them with any vendor. A good long term track record is, to me, a better indicator of account stability. A buyer will want to see a clean set of books, a good list of equipment, and tax records (to back up your books). Selling value can be determined several ways, but any buyer will want to see how well the business has performed over the last 24 to 36 months, looking at totals and trends. That will be more important than contracts except for perhaps the largest locations and any which have been won on a bidding system (government, non-profits, etc). Link to comment Share on other sites More sharing options...
Magiccity726 Posted June 20, 2016 Author Share Posted June 20, 2016 Thank you Southeast Treats! Do you have any thoughts on business loans? I'm currently generating a decent amount of revenue and I have about 30 machines basically ready to go. Problem is that I have locators and I don't deliver my own machines I have to pay someone. I basically could get 10 locations next week if I had the cash. Any thoughts or tips would be great. Thanks. Link to comment Share on other sites More sharing options...
smartvendnw Posted June 20, 2016 Share Posted June 20, 2016 I might have to start a new thread regarding contracts. You guys know I'm new to the game here, but 8 locations and each has a contract or what I call an agreement. I would never place a machine with out it. I thought I was SOP. Interesting... BT$ Link to comment Share on other sites More sharing options...
Southeast Treats Posted June 20, 2016 Share Posted June 20, 2016 I try to get a signed agreement with my new locations, but they are basically at will agreements, not contracts in the sense that there is a guaranteed time frame that I will have the location. Just sets out that I will retain ownership of the machines and contents and the location does not pay for repairs, etc... and of course commissions if that applies. If you provide good service you will keep most of your locations for a long time, but if they are unhappy with you they will find a way to get you out of there contract or no .... I am not a huge fan of borrowing money, but I do understand being held back by lack of capital! I will sometimes finance a new machine for a big location but I have not just gone out and borrowed for expansion cash. The more you owe, the more your cash flow just goes to pay the creditors instead of paying you. Link to comment Share on other sites More sharing options...
arkhusker Posted June 23, 2016 Share Posted June 23, 2016 Vending contracts are a waste of paper in most places. If they want out they will get out and it would be bad business to sue a company that wants out. An agreement like Southeast mentioned is better to protect you and your equipment but that's about it. Link to comment Share on other sites More sharing options...
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