mainor5251 Posted July 21, 2011 Share Posted July 21, 2011 I haven't been on the forum a whole lot lately but I'm still trying to grow the business. I'm at the point now where lack of funds has really put a strangle hold on any expanding. Haven't been able to afford to invest everything back into the business and the business has suffered because of it. I got locations that need product switched out to keep sales up but haven't been able to afford it. I also have several locations that could be upgraded but not enough funds to make it happen. I have machines that need refurbing and locating but same story. I'm still very passionate about the business and have all intentions of doing this full time eventually. Some steps that I'm taking to help be able to invest more back into the business, first we will not be renewing our lease in 6 months and opting for a cheaper place second after much consideration I have decided to take on a partner. I was very hesitant about the partner thing but have weighed the pros and cons and decided to go ahead with it. I've known the guy for 6-7 years now worked with him for the last 4, not worried about trust or loyalty. We are both at the same place in our lives, we both work for the state and both plan to leave in the next 2-2 1/2 years. So in the mean time the extra money a month (buy-in agreement) would allow us to grow the business at a decent pace over the next 2 years at which time we are both planning to cash out are retirements and use enough of it to put us at a level to at least match what we are making now. Since theres 2 of us we can concentrate on a larger service area which is key when focusing on racks. I know theres a million things that can go wrong with partnerships but at this point with growth slowed down to next to nothing what am I risking. Looking forward to doing this full time one day. Link to comment Share on other sites More sharing options...
timberframe50 Posted July 21, 2011 Share Posted July 21, 2011 Mainor there are pitt falls in everything. But it sounds like you have a solid plan. I would suggest there is a written partnership agreement, including an exit clause. I wish you the best in the new direction you have.choosen. Link to comment Share on other sites More sharing options...
mainor5251 Posted July 21, 2011 Author Share Posted July 21, 2011 Thanks Jim, yeah everything's gonna be in writing got to do so more research though not sure if the operating agreement that is talked about with an LLC with more then one person involved is enough or I need something completely separate. Link to comment Share on other sites More sharing options...
lurtsman Posted July 22, 2011 Share Posted July 22, 2011 Interesting. I'm at the point where having the money to expand is no longer a concern, but instead I'm strapped for the time and focus as other things get in the way. My effort goes into getting my wife's old car sold. Getting paper work done. Getting her forbearance on loans so we can qualify for specialized repayment programs that equate to being handed huge amounts of cash. Expanding my knowledge of corporate finance for my later career in stock fund management. I thought for a long time that cash flow would be my limiting factor in expanding the business, but it is not. One of the other draw backs is my last few locations from locating companies sucked. As such, I'm hesitant to go out and just buy locations, even though I'd like to think there are still good places they could get. KS's system is supposed to prevent them from calling the same place twice. If I was sure that would work I think I'd order more locations since I have the machines but not the time to get them out there. Since they would hit the street sooner it would pay for the locating costs. Come to think of it, it's been long enough for people to have changed minds, new businesses to open, and managers to turn over, I just might put in a small order and prep some more toy machines. Having them put out even 5 machines at a time is a real boost to your business. It doesn't make it easier that our apartment company is harassing us about using the parking lot for parking. They want the garage used exclusively for storing vehicles (you'd think THEY were the ones paying rent) and not for setting up my toy racks that enable us to pay the rent. We'll move at some point to, but the crooked laws here have created a haven for crooked land lords. 3-4 years left til we up root and I sell my business. I think that's been hurting my expansion also, it's hard to think about leaving the business, but I just can't live in Iowa the rest of my life. Why this matters to you. 16 months ago I couldn't fathom being at this point where the business generated more funds than I had time to spend on growing it. The business generates a much better return than the stock market, but it still requires you have time to do it. I wish you the best of luck with having a vending partner. I don't know that I could handle that myself, though there are a few guys on the forum I really wish I could utilize for their skill sets more. I wish I could be Kelly when I go out locating, and hillbilly when I'm refurbing machines. It's gutsy you've decided to get a cheaper lease. You may also want to go over your expenses and look for other areas to cut. After deducting health insurance and retirement contributions--which come out before we see them, we spend about 2200 per month on living expenses and my student loan repayment( 125$). I figure if you can get under 2500 per month you're doing pretty good. I should probably calculate our burn rate again to see if that is still accurate. Before my loans were in repayment, when we were really poor, we were making do on 1800 per month. My wife graduating and getting her job as an RN really jolted our income upwards. For months before that we had been using the business profits to keep from bottoming out. If you're really serious about expanding and hard up for cash, look for real things to cut. For instance, I change the oil on the cars. We have gone out to the movies once in the last 18 months. We only go out for food about once every two weeks. We average less than 10$ total on the meal for two. Have you checked to see if you qualify for USSA? They'll give you a better deal than any other bank. They have never charged me a fee, pay me interest on my savings and checking, pay me cash back on my card, give me great discounts on auto insurance, cheap roadside assist (1$ per month per vehicle), and when they turn a profit, they divide up amongst the members and mail them a refund check. That's my kind of bank. I use turbotax to do taxes. After all, it's cheaper than using H&R, and I learn in the process. I also get back far more in things I've never heard of that I would miss doing it without software. The software costs me like 70$ (USSA gets me 25% off) and on average gets me 500-1500 in programs I didn't know existed. If you want music and are buying CDs, you are missing out on the age of library's and cheap MP3 players (I won't recommend fraud, but I don't care about the RIAA). My wife and I got ourselves gifts in the form of two mp3 players. About 20 bucks each. Are you scanning craigslist to find the best deal on machines? I've gotten pretty picky. Since I'm strapped for time locating and not Kelly when it comes to convincing people, I'm prone to having them sitting around my house. I can see five of them from where I sit right now. :'( Speaking of libraries, they have fairly large dvd selections. If you have one conveniently located you never have to pay for a movie again. Do you have cable TV? Have you tried Hulu? Not only do I not have cable TV, I sold my television on craigslist. My computer is better for watching movies anyway. Are you regularly buying video games? This one seems to be a trap for a ton of people. Put a limit on it, say 20-30$ per month. You can either get one title every other month, or you can get a couple out of the used bin. Clothes - I've bought a couple pairs of pants at gordman's for an average of about 10$ per. Outside of that, I shop almost exclusively at good will. I don't do it because I'm a nice guy, I do it so I can get the pants and shirt together for 4 bucks. Do you have a gym membership? Do you actually go? If you aren't in there several days per week you might have a community center that you can use and pay by the session (2 bucks here) that averages out much cheaper. I work out twice per week. 4 per week comes out 16-18 bucks per month with no BS start up fees or contracts that I don't want. The gym isn't great, but it's enough to have me in excellent shape. If you do work out, you can get protein powder at walmart. Less than 16 bucks for a couple pounds of body fortress. If you're working out without protien powder it's just a waste. You could buy the powder, cut the number of work outs, and be in better shape. I'm maxing out a third of the machines there. I make the personal trainers look like wimps. The muscles come in handy when you want to carry a preassembled 6 way rack into a location. Yeah, did that last week. Just a few of the things I've found that seem to work. Now that my wife is working full time, I take care of the apartment and do all the paper work. If you manage to lose a job via lay off, you can file for unemployment. You're required to search for work, and I DO NOT recommend committing fraud. The total work search plus filing took me about 12 minutes per week on average. You are not required to want the work (though you must take it if offered), or to apply to temp agencies or hotel cleaning jobs. My paper work currently is to get a "training extension benefits" which will pay me another 26 weeks to take half time classes over the winter at a community college. It's not the same as getting paid for 12 minutes of applying, but the education has some value, and the cost is far below the benefits I'll receive even if I get no grants. Since I wanted to get this education anyway, this is a real no brainer. The paperwork will eat up a few days of my time though due to issues like them asking for an OCS code that is 6 digits and giving me 5 squares to write in. Why? >->. It seems my work is frequently getting after people at real jobs and telling them to do their job like an adult. Hopefully Mainor, something in here will give you a way to save some money and expand the business faster. I'll never forget when I was going to spend a thousand bucks on building a rack, and Nam found me a much better one for 350$ (brand new, never used, 11 NW on sentinel with wings). It taught me fiscal discipline and saved my business. I didn't learn how to get by on less because of some strange fascination with it, at least not at first, I did it because we were barely able to get by, living off food from the food bank, and every job I applied to told me to pound salt and die in a ditch (metaphorically, they didn't have the guts to say it to my face). I'm not a kinder person for it, but I am self reliant and willing to help anyone else who wants to put in the work to build a better life for themselves. Link to comment Share on other sites More sharing options...
caserri Posted July 22, 2011 Share Posted July 22, 2011 Lurts, If I could give 20 rep points for that post, you'd have them. All I can give is one and it's yours! Sent using the Tapatalk Forum Viewer for Android. Link to comment Share on other sites More sharing options...
havending Posted July 22, 2011 Share Posted July 22, 2011 I haven't been on the forum a whole lot lately but I'm still trying to grow the business. I'm at the point now where lack of funds has really put a strangle hold on any expanding. Haven't been able to afford to invest everything back into the business and the business has suffered because of it. I got locations that need product switched out to keep sales up but haven't been able to afford it. I also have several locations that could be upgraded but not enough funds to make it happen. I have machines that need refurbing and locating but same story. I'm still very passionate about the business and have all intentions of doing this full time eventually. Some steps that I'm taking to help be able to invest more back into the business, first we will not be renewing our lease in 6 months and opting for a cheaper place second after much consideration I have decided to take on a partner. I was very hesitant about the partner thing but have weighed the pros and cons and decided to go ahead with it. I've known the guy for 6-7 years now worked with him for the last 4, not worried about trust or loyalty. We are both at the same place in our lives, we both work for the state and both plan to leave in the next 2-2 1/2 years. So in the mean time the extra money a month (buy-in agreement) would allow us to grow the business at a decent pace over the next 2 years at which time we are both planning to cash out are retirements and use enough of it to put us at a level to at least match what we are making now. Since theres 2 of us we can concentrate on a larger service area which is key when focusing on racks. I know theres a million things that can go wrong with partnerships but at this point with growth slowed down to next to nothing what am I risking. Looking forward to doing this full time one day. I glad to hear you are wanting to grow your business. Having a partner can be a great idea, And can be a great way to grow. In an ideal world the government would have better programs to help start and grow a business. But they rather blow it. It sounds like you have a great plan in place. But you must stick to it for the plan to work. I would also add to your plan. Longer service cycles. Its a great way to help save money. Making sure you have the right price points. ie .50 one inch and .75 or 1.00 two inch. Use racks with more one inch than two inch. Do 3 heads of two inch on top and 5 one inch on bottom. Because .50 one inch sell very well and is very profitable. You are in a great area for vending with a lot of room to grow. Trust me on that one because i am all over the area. I keep seeing newer places to get. If you need my help let me know. Link to comment Share on other sites More sharing options...
mission vending Posted July 22, 2011 Share Posted July 22, 2011 Lurts, Excellent post, though it just might qualify as the longest post ever here at TVF. This is the best part: I didn't learn how to get by on less because of some strange fascination with it, at least not at first, I did it because we were barely able to get by, living off food from the food bank, and every job I applied to told me to pound salt and die in a ditch (metaphorically, they didn't have the guts to say it to my face). I'm not a kinder person for it, but I am self reliant and willing to help anyone else who wants to put in the work to build a better life for themselves. We were in a very similar situation about three years into this vending adventure when I was in way over my head with debt. We managed to survive and like you I am willing to help those that are willing to do the work. Mainor, I know at times building a business feels like you are beating your head against the wall but if you stick with it, keep learning and improving yourself and your business eventually you WILL break through and reach your goals. Link to comment Share on other sites More sharing options...
mainor5251 Posted July 22, 2011 Author Share Posted July 22, 2011 well the partership idea might have been short lived just found out him and his wife are gonna be looking at houses for sale tomorrow in a city an hour and a half away. The distance is no big deal in fact would give us the opportunity to cover even more but the fact that they have been going back and forth about moving for years now and if you can't even make a decision about where you are gonna live how good could you possibly be at making business decisions, might have been for the best. Link to comment Share on other sites More sharing options...
dpvnc Posted July 23, 2011 Share Posted July 23, 2011 Mainor: I am not one for partnerships. In my life I have taken it in shorts to many times trying to have partners and trusting others in business ventures.For me it always ended badly. I think you will find a way to make it work for you. One thing I did last year when I was short on cash for product was to collect locations close to home more frequently. It would give me little bursts of capital that helped me buy more products and used machines. I am not talking driving far just 10 minutes or so. I built a small route with a good amount of locations close to home. Also if you have slow sellers make up your own mystery mix it sells fairly well I use the treasure chest placard here on the forum. You can put a mix in for a cycle. Cap your own products saves you freight a little and can help get you over the hump. I recycled caps also washed them in the washing machine. Link to comment Share on other sites More sharing options...
Thrifty Posted July 23, 2011 Share Posted July 23, 2011 Even though business partnerships are usually not optimal, Me and my partner's vending business has worked out great. We think this business was made for two. I am the purchaser,admin, and servicer. He is sales. I believe it helps greatly when partners complement each other. Another thing is that with vending partnership, it seems that the worst thing is needing a higher revenue to sustain both owners, but in my opinion that is greatly dwarfed by the leverage created. With two focusing on certain areas, you can experience fast growth, less stress, and most importantly, a scale that is so much larger than you can do alone. Just my opinion, Mainor, good luck with your business, you'll do great. Link to comment Share on other sites More sharing options...
lurtsman Posted July 23, 2011 Share Posted July 23, 2011 I'd love to have someone help with sales. That is by far the hardest part of the business for me, which is ironic given that I have a great deal of persuading to do in every other area of my life. My passion is for business and economics though, so perhaps the irony should be my love for restoring under-priced machines considering the manual labor. You may be right not to go into the partnership, however my thinking isn't that it is equal parts between their lack of decision and your unwillingness to cope with his lack of decision. It would bother me to, the fact that you know it bothers you is a strong sign that it would be a problem. I really struggle with people who can't make a decision, especially if it is in their immediate future. There are times for waiting and collecting more information, and times for action. I'm more prone to be a waiter. The time to buy machines involves mostly waiting as the vast majority of deals offered are bad. The time to get locations is always NOW. Perhaps that's my challenge? Have you calculated the ROI on your business as a whole? Have you calculated out individual locations to make sure you aren't wasting time/machines on duds? When I was really expanding fast and didn't have machines in my garage I was pushing over 100% ROI for about 2 years. That grows a business pretty fast. If you know you can average that, you may want to look at where you can maintain a low cost of capital. Look for ways to free up money. Sell off things you don't want on craigslist to buy more machines. If you're self locating 100% is very reasonable, and some people may push as high as 180%. If I had the selling skills to land half the places I went to pitch, I don't doubt for a second that I could post 200% ROI every year. That makes it worth taking out money that you are paying near the inflation rate on. Your largest source of debt should be your mortgage, it can be used to pay down everything else that is costing your more interest. It however should not be paid off before investments into your business if you are posting 100%+ and paying under 4%. Edit: PS. Thanks for the kind words on my earlier post. Link to comment Share on other sites More sharing options...
Hillbilly Posted July 23, 2011 Share Posted July 23, 2011 Hang in there buddy.You'll make it. We all have the ups and downs. One of the things Irealized early on in this business, was that you can't sell out of an emptywagon. (Thanks havending) You have to have product for the machines. I made a list of staple items and make sure that I always have them onhand. It is the first thing I order after servicing each time. Gettingready for the next service cycle. Working with Andy emphasized this. Wecleaned his warehouse out in 6 days. He reordered the next day. The good thing aboutusing the same staple items is that normally you can just change the displayand sales will spike again. For example I use Sticky Mix and Sticky Hands mixedtogether and have several displays from Cardinal and A&A. At 11.95 and12.95 a bag it will stretch a long way. If you do thepartnership, be very careful. I too fell victim to a partnershipinvolving a friend. Never again, (except maybe Andy) will I make that mistake. I was the one who had the liability for the business. It cost me agreat deal of money. Anything I can do tohelp, just let me know. Lurts: Good post, ThankYou for the Accolade. Link to comment Share on other sites More sharing options...
mainor5251 Posted July 23, 2011 Author Share Posted July 23, 2011 Thanks for all the good advice guys. I have managed to come up with enough cash to change out most of the product and upgrade at least 1 account, putting in an order next week. Gonna work on getting 40 A&A's refurbed and getting them new homes where they are making me money. Link to comment Share on other sites More sharing options...
lurtsman Posted July 26, 2011 Share Posted July 26, 2011 Thanks for all the good advice guys. I have managed to come up with enough cash to change out most of the product and upgrade at least 1 account, putting in an order next week. Gonna work on getting 40 A&A's refurbed and getting them new homes where they are making me money. Is it stupid that I'm jealous you get to refurbish those machines? Yeah, it probably is. Either way, go get em Link to comment Share on other sites More sharing options...
mainor5251 Posted July 28, 2011 Author Share Posted July 28, 2011 Spent the day ordering product. Have a limited amount of funds so I tried to spread it around. Ordered from A&A, Brand and VSI. A&A: 2" string pets, 2" Harley Davidson key chains, 2" Sponge Bob figurines/tattoos, NFL stickers and some parts Brand: 1" Swampland and 1" glow n dark sqwishland VSI: Bullseye Boys Tattoos 6 and Sugar Tattoos 10 This will be the first at flat vending for me, I have sold some machines in the past but never placed any. I bought 1 3 column A&A machine newly refurbished for $156 shipped Plan is to change out to some new product at exsisting locations, add a sticker/tattoo machine to 1 location, and refurb and place some more single head gumball machines at least until I can get some more .50 mechs for 1" Link to comment Share on other sites More sharing options...
will.vend Posted July 29, 2011 Share Posted July 29, 2011 good luck with the flat vending mainor, call mike at flatline he is very helpful, flatline has a good selection of tattoos 1-877-499-3528 Link to comment Share on other sites More sharing options...
mainor5251 Posted August 3, 2011 Author Share Posted August 3, 2011 I love the FedEx and UPS deliveries, everything come in today except some tattoos from VSI Link to comment Share on other sites More sharing options...
mainor5251 Posted August 3, 2011 Author Share Posted August 3, 2011 when I was looking at the key chains I noticed there didn't seem to be as many regular size as the mini's, I wouldn't make a big deal but I specifically asked my sales person if it was half and half and she said yes. I wanted all regular but they said they were out. Looks like they were running low on the regular so they decided to skim a little. Count was 176 minis and 74 regular. They will get a call tomorrow. As long as we let them get by with stuff like this its gonna continue and probably get worse. Link to comment Share on other sites More sharing options...
havending Posted August 4, 2011 Share Posted August 4, 2011 when I was looking at the key chains I noticed there didn't seem to be as many regular size as the mini's, I wouldn't make a big deal but I specifically asked my sales person if it was half and half and she said yes. I wanted all regular but they said they were out. Looks like they were running low on the regular so they decided to skim a little. Count was 176 minis and 74 regular. They will get a call tomorrow. As long as we let them get by with stuff like this its gonna continue and probably get worse. [/quote Make sure you let us know how it comes out. I was looking to order the large ones. Sent from my Desire HD using Tapatalk Link to comment Share on other sites More sharing options...
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