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Estimating location revenue


shepherdsflock

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I'm putting together my business plan for snack and soda vending, and I'm trying to figure out what would be a good method for estimating gross revenue from a location. I'm supposing that the experienced operators out there develop a "feel" for locations over time, but for somebody just starting out what is a good way to make a ballpark estimate of revenue from a potential location? Any advice on location types, like blue collar versus white collar, and how the estimating of those two would differ? Or the difference in estimating locations like hotels versus an employee break room in a factory?

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It's definitely not as simple as just saying there's 60 people and so figure $1 per person. That's how my locator put it years ago but I've sinced learned that's far from the truth. I'm to the point where if it's not a blue collar workplace with 90% men then I don't want to touch it. My last location I moved into has 90 people. They make circuit boards and wiring. Well, the problem is that it's probably 50/50 women/men. And they're in a nice air conditioned place where they sit down most of the day. It does about $45 a day.

On the other hand I have a dirty, hot factory where the 60 or so employees work hard all day long. I do about $100/day there. Another fairly blue collar place with all men...$24/day with maybe 20 people.

I would stick with these type of places and figure $1 a day per person. If it's an office set up or even a place where people are just in and out (where they can easily buy something somewhere else) then you have to figure 50 cents a person. An office building....don't bother (I know there are probably exceptions), I'd say 25 cents a day at best there.

If I had to do it all over again?..... I have two locations with just a combo machine in them. 20 or so people and they do about $20-$30/day depending on how busy they get. I'd love to have them all like this. No competition from outside vendors, no stress as there's only one machine to service and they're in a breakroom. They just keep working day in and day out. If they don't the location doesn't get too stressed about it. Only pop and snack, no worries about sandwiches or coffee. I literally spend 1 hour per week on each of these and that includes prekitting, filling and driving there. At $400-$500 per month imagine if I could somehow have 30 of these type of locations. About $160K/year for 30 hours a week.

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It's definitely not as simple as just saying there's 60 people and so figure $1 per person. That's how my locator put it years ago but I've sinced learned that's far from the truth. I'm to the point where if it's not a blue collar workplace with 90% men then I don't want to touch it. My last location I moved into has 90 people. They make circuit boards and wiring. Well, the problem is that it's probably 50/50 women/men. And they're in a nice air conditioned place where they sit down most of the day. It does about $45 a day.

On the other hand I have a dirty, hot factory where the 60 or so employees work hard all day long. I do about $100/day there. Another fairly blue collar place with all men...$24/day with maybe 20 people.

I would stick with these type of places and figure $1 a day per person. If it's an office set up or even a place where people are just in and out (where they can easily buy something somewhere else) then you have to figure 50 cents a person. An office building....don't bother (I know there are probably exceptions), I'd say 25 cents a day at best there.

If I had to do it all over again?..... I have two locations with just a combo machine in them. 20 or so people and they do about $20-$30/day depending on how busy they get. I'd love to have them all like this. No competition from outside vendors, no stress as there's only one machine to service and they're in a breakroom. They just keep working day in and day out. If they don't the location doesn't get too stressed about it. Only pop and snack, no worries about sandwiches or coffee. I literally spend 1 hour per week on each of these and that includes prekitting, filling and driving there. At $400-$500 per month imagine if I could somehow have 30 of these type of locations. About $160K/year for 30 hours a week.

what kinda location with 20 people does $30 a day? i have locations with 20 people that dont do 50 a week

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what kinda location with 20 people does $30 a day? i have locations with 20 people that dont do 50 a week

They're mostly in the $20-$24 range with 20 people but when they pick up the pace they get up to $30 for a couple months out of the year....although they are hiring an extra 8-10 people. So, it all comes out to $1 a day per person.

Blue collar, all men. They're making chemicals there and its a distribution center. Other one has probably 40 people but they're in and out - drivers. Figure one drink or a couple snacks per person each day and there's your $1. These are the people who make decent money, they're standing up all day or at least moving around, they're fairly young so they don't plan ahead with snacks, drinks, etc and they don't have a problem with spending a few dollars every day.

Again, going forward I would be extremely picky to only go for these type of accounts. And if it doesn't work out then you only have to move one, maybe two machines instead of going into these giant companies with 4-6 machines and having to show up every other day. It's big money while it lasts but it's a constant battle. There is so much less stress on these smaller accounts that do the volume. Walk in the door and 15 minutes later walk out with $80-$90. Rinse. Repeat.

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The best rule of thumb I have heard is $1-2 per white collar per week and $3-4 per blue collar per week. Keep in mind that most businesses are a blend of white and blue collar. Of course there are locations that don't fit these models (both more and less), but they are the most accurate to what I see.

Loach, it looks like you have a couple decent accounts there but they are not the norm at least not in my area.

JD

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The best rule of thumb I have heard is $1-2 per white collar per week and $3-4 per blue collar per week. Keep in mind that most businesses are a blend of white and blue collar. Of course there are locations that don't fit these models (both more and less), but they are the most accurate to what I see.

Loach, it looks like you have a couple decent accounts there but they are not the norm at least not in my area.

JD

I think your numbers are pretty much right on - when you average everything out. A couple of mine are $5-6 per week but I have others that are more like $2-3.

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So, it sounds like if I conservatively estimate $2 per employee per week, that should be a pretty good indicator as to whether or not a location can generate the revenue to be profitable. I want to focus on blue collar factory locations, since that is the environment I have the most experience working in. Since I've worked in those locations and know how the people think and act, I think it would make the most sense for me to stick with what I know.

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So, it sounds like if I conservatively estimate $2 per employee per week, that should be a pretty good indicator as to whether or not a location can generate the revenue to be profitable. I want to focus on blue collar factory locations, since that is the environment I have the most experience working in. Since I've worked in those locations and know how the people think and act, I think it would make the most sense for me to stick with what I know.

$2 is probably too conservative for a blue collar account. If you over estimate the sales you have machines that need new homes when you can find one or get stuck with high volume machines in a low volume account. When you drastically under estimate sales you get stuck servicing every day which is impossible for some people (schedule wise).

If you find an account you can always post it out here and ask. I'm sure someone here will have the same type/size account. I still do this if I'm really not sure, or I'm buying new equipment and really need to be right.

JD

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  • 7 months later...

If you find an account you can always post it out here and ask. I'm sure someone here will have the same type/size account. I still do this if I'm really not sure, or I'm buying new equipment and really need to be right.

JD

Here's what I'm working on right now: a manufacturing facility with a large front office area. The manufacturing floor has about 40 people. The front office space is two stories and houses the office staff of the manufacturing company, plus two other companies lease the upstairs office space. The total white collar headcount is around 100. So, I've got a total of about 140 people between the two areas of the building. It has two break rooms, one for the manufacturing area and one for the office area.

I'm planning on putting two soda and two snack machines in, one of each in the two break rooms. Do you guys think this type of location could generate over $200/week?

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Here's what I'm working on right now: a manufacturing facility with a large front office area. The manufacturing floor has about 40 people. The front office space is two stories and houses the office staff of the manufacturing company, plus two other companies lease the upstairs office space. The total white collar headcount is around 100. So, I've got a total of about 140 people between the two areas of the building. It has two break rooms, one for the manufacturing area and one for the office area.

I'm planning on putting two soda and two snack machines in, one of each in the two break rooms. Do you guys think this type of location could generate over $200/week?

I can see it doing $200/week but I would check to see if there is any convenient stores or any quick options for snacks/beverages nearby that may take away from your sales. I have a location with about 20 blue-collar people on staff and about 15 white-collar and it does about $65/week. I would venture to say that the blue-collar do about $50/week ($2.5/person) and the 15 white-collar do about $15/week ($1/person). Based off of my rough math, you should do about $100 from the blue collar and $100 from the office workers. I would say $175-$250 but closer to the $200 mark.

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I agree most of your sales will come from the blue collar breakroom. I would try to look at this location as two different accounts. Keep your equipment costs in line with each type of account. You will make back your investment slower on the office area (any office area unless it is a bunch of telemarketers or collection a agency or even a dish network call center). If you pick up a couple of used machines for $700, where else can you make $100 to $150 a month on that investment. Not in rentals, not in CD's and not in stocks right now. Keep your prices in line and go for it. Not every account will be a out of the park home run but with each small investment you will be developing a stream of income. So to answer your question, buy right and enjoy.

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I agree most of your sales will come from the blue collar breakroom. I would try to look at this location as two different accounts. Keep your equipment costs in line with each type of account. You will make back your investment slower on the office area (any office area unless it is a bunch of telemarketers or collection a agency or even a dish network call center). If you pick up a couple of used machines for $700, where else can you make $100 to $150 a month on that investment. Not in rentals, not in CD's and not in stocks right now. Keep your prices in line and go for it. Not every account will be a out of the park home run but with each small investment you will be developing a stream of income. So to answer your question, buy right and enjoy.

My term would be a "bread and butter" account. Take good care of them and you can keep that type of account pretty much for as long as you want.

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