10 replies to this topic

[Dave]

I saw a bulk candy machine at a location and I called the owner and asked if they or anybody they new was selling a route. I talked to this person for a while and he said that he was interested in selling. He said that he had 31 Dual head machines placed and 2 in his basement. He said he would collect 300 to 400 a month. I don't know what the gross on that would be. He also said that someone had recently called and asked how much he was asking for the route and the price was $8000 That person never called back and I can see why, Seems like alot. It would take way to long to get any return on investment. What would be a realistic number to put on this type of route? I also asked if he would sell individual locations that were doing good. Any thoughts!

[CoolHand]

I saw a bulk candy machine at a location and I called the owner and asked if they or anybody they new was selling a route. I talked to this person for a while and he said that he was interested in selling. He said that he had 31 Dual head machines placed and 2 in his basement. He said he would collect 300 to 400 a month. I don't know what the gross on that would be. He also said that someone had recently called and asked how much he was asking for the route and the price was $8000 That person never called back and I can see why, Seems like alot. It would take way to long to get any return on investment. What would be a realistic number to put on this type of route? I also asked if he would sell individual locations that were doing good. Any thoughts!

<{POST_SNAPBACK}>

Figure 20% as cost of goods sold --> Gross profit from average revenue of 350 per month would be (80%*350) $280. Annually that is $3360. That would pay for the cost of the business in 2 years and five months. If they are selling gumballs at a vend cost of about 2c then cost of goods sold is 8% and gross profit is (92%*350) $322 i.e $3864 per year. Business is free after 25 months.

Your $8000 investment would be returned after about two years.... seems fair in the real world. Google for business valuation and you will see this.

Consider Option 2. The DO THE WORK YOURSELF OPTION

I pay 179 for a top of the line triple head machine (Your price would be higher, I have 200+), even if I pay a locator $30, the machine costs me 209+fill... call that 225. Multiply that by 31 and your out of pocket is $7000. I work my new locations hard and average 32$ per machine per month. For 31 machines that is about $900. My investment pays for itself in 9 months.

I personally wouldn't pay the $8000 because I can do the work myself and recoup my investment in half that or less.... but then I got skills ! I would ask you for $23000 for 31 of my machines on a working route.

Good Luck

Cool Hand Luke

[jblvending]

Figure 20% as cost of goods sold --> Gross profit from average revenue of 350 per month would be (80%*350) $280.  Annually that is $3360.  That would pay for the cost of the business in 2 years and five months.  If they are selling gumballs at a vend cost of about 2c then cost of goods sold is 8% and gross profit is (92%*350) $322 i.e $3864 per year.  Business is free after 25 months.

Your $8000 investment would be returned after about two years.... seems fair in the real world.  Google for business valuation and you will see this.

Consider Option 2.  The DO THE WORK YOURSELF OPTION

I pay 179 for a top of the line triple head machine (Your price would be higher, I have 200+), even if I pay a locator $30, the machine costs me 209+fill... call that 225.  Multiply that by 31 and your out of pocket is $7000.  I work my new locations hard and average 32$ per machine per month. For 31 machines that is about $900.  My investment pays for itself in 9 months.

I personally wouldn't pay the $8000 because I can do the work myself and recoup my investment in half that or less.... but then I got skills !  I would ask you for $23000 for 31 of my machines on a working route.

Good Luck

Cool Hand Luke

<{POST_SNAPBACK}>

Before you go through all that math.first let the person prove to you that they are making 350.00 a month.Because after you pay for your gas,maintence,and labor,it may take twice as long as 25 mths.Consider first your expenses.People get caught up on how much they will make a month and often times its no where near that figure, why, because the person selling is getting out of that business because it's not profitable.Take it from experience,never trust there word, always ask for proof, if they can't deliver,walk away from the deal

[CoolHand]

Before you go through all that math.first let the person prove to you that they are making 350.00 a month.Because after you pay for your gas,maintence,and labor,it may take twice as long as 25 mths.Consider first your expenses.People get caught up on how much they will make a month and often times its no where near that figure, why, because the person selling is getting out of that business because it's not profitable.Take it from experience,never trust there word, always ask for proof, if they can't deliver,walk away from the deal

<{POST_SNAPBACK}>

Generally people tend to oversweat the impact of gas and maintenance. It really doesn't amount to that much (Maybe couple hundred miles a month), Maintenance... my costs so far 2005=$6.

Other than that, of course you need to get proof of income. I keep books like a real business, by machine,by head, by candy, by location, by month, by season and by year. It is a real business, you should ask for the books, contact history and a tour of the route.

People dont always sell a business because it's not profitable. FYI I sold a 160 triple machine route in Miliwaukee when I moved to Mississippi. I sold it for $107,000. Of course I had all the paperwork, the new owner took a business plan to a bank and got a loan. Try getting a loan without income history and credible books!

Good Luck

[jblvending]

Generally people tend to oversweat the impact of gas and maintenance.  It really doesn't amount to that much (Maybe couple hundred miles a month), Maintenance... my costs so far 2005=$6.

Other than that, of course you need to get proof of income.  I keep books like a real business, by machine,by head, by candy, by location, by month, by season and by year.  It is a real business, you should ask for the books, contact history and a tour of the route. 

People dont always sell a business because it's not profitable.  FYI I sold a 160 triple machine route in Miliwaukee when I moved to Mississippi.  I sold it for $107,000.  Of course I had all the paperwork, the new owner took a business plan to a bank and got a loan.  Try getting a loan without income history and credible books!

Good Luck

<{POST_SNAPBACK}>

CoolHand,I wasn't talking about your business,not everyone has your business skills.what i was trying to do was steer this person in the right direction.Before he spends a dime for this business, he needs the facts,and has to ask the hard questions.Yes, people don't always sell just because a business is not profitable, they may sell because there moving such as yourself, there are many reasons for selling, but, in what i was saying, if they can't show proof of profits that they claim, then most of time,its not profitable.I disagree with you on the impact of gas and maintenance.These things affect the bottom line,maintenance can be anything from a oil change to tires,not counting just maintenance on machines.Again my goal here is to help this person out.

[CoolHand]

CoolHand,I wasn't talking about your business,not everyone  has your business skills.what i was trying to do was steer this person in the right direction.Before he spends a dime for this business, he needs the facts,and has to ask the hard questions.Yes, people don't always sell just because a business is not profitable, they may sell because there moving such as yourself, there are many reasons for selling, but, in what i was saying, if they can't show proof of profits that they claim, then most of time,its not profitable.I disagree with you on the impact of gas and maintenance.These things affect the bottom line,maintenance can  be anything from a oil change to tires,not counting just maintenance on machines.Again my goal here is to help this person out.

<{POST_SNAPBACK}>

I wasn't disagreeing with you at all.

The whole vehicle thing... I'd spend the same money on maintaining my vehicle even if I didn't have the route so I guess you either have a business vehicle or do a lot more miles than me!

Dont get me wrong about 'business skills'. I 'm not some hotshot MBA. I just keep records. Of EVERYTHING. One day I realised I had to organize it a little better. I happen to be quite familiar with excell and access so I built a database but I dont do anything with the data that you cant do with the 'Vending Solutions' software package.

Bottom Line "Salespeople Lie"

[Vending Chat]

I saw a bulk candy machine at a location and I called the owner and asked if they or anybody they new was selling a route. I talked to this person for a while and he said that he was interested in selling. He said that he had 31 Dual head machines placed and 2 in his basement. He said he would collect 300 to 400 a month. I don't know what the gross on that would be. He also said that someone had recently called and asked how much he was asking for the route and the price was $8000 That person never called back and I can see why, Seems like alot. It would take way to long to get any return on investment. What would be a realistic number to put on this type of route? I also asked if he would sell individual locations that were doing good. Any thoughts!

<{POST_SNAPBACK}>

Great info guys. The other thing to look at here is what should this person realistically be asking for this route. Generally, you can base that on between 75% to 100% of a year's gross in the bulk vending business. This corresponds with what Coolhand said in the beginning.

If this route is doing a gross of approx $3800 per year, $8000 is high. In this case, the locatins aren't doing much; so you are basing much of the value on the cost of the machines since you'll probably want to gradually move most of the locations anyway. You can get new double heads for about the price of $3800 not counting your locations. So, if he doesn't drop to at least $5000, he'll be sitting on them a while.

[BlueRoxie]

I wasn't disagreeing with you at all.

The whole vehicle thing... I'd spend the same money on maintaining my vehicle even if I didn't have the route so I guess you either have a business vehicle or do a lot more miles than me!

Dont get me wrong about 'business skills'. I 'm not some hotshot MBA. I just keep records. Of EVERYTHING. One day I realised I had to organize it a little better. I happen to be quite familiar with excell and access so I built a database but I dont do anything with the data that you cant do with the 'Vending Solutions' software package.

Bottom Line "Salespeople Lie"

I don't have experience with access, but have considered having someone build the Database for me and teach me to use it. Why did you choose this route instead of using "Vending Solutions" or another software package? I manage a new venture and need to track and plan routes for just over 1,300 bulk machines with 4 products each. I'm currently using Microsoft Excel to track and calculate next service date. I then export the machines to service into a Mapping program to print routes for the week. This system is very labor intensive to keep the data current. Our plan is to grow to 5,000 machines, but using Excel will consume way too much time as well as being very susceptible to human error.

[Baxson]

I don't have experience with access, but have considered having someone build the Database for me and teach me to use it. Why did you choose this route instead of using "Vending Solutions" or another software package? I manage a new venture and need to track and plan routes for just over 1,300 bulk machines with 4 products each. I'm currently using Microsoft Excel to track and calculate next service date. I then export the machines to service into a Mapping program to print routes for the week. This system is very labor intensive to keep the data current. Our plan is to grow to 5,000 machines, but using Excel will consume way too much time as well as being very susceptible to human error.

Hello,

I am in the process of building an application, web based, that will do everything you are talking about and more. If you would be interested in holding out until I am done, within the next month or so, I would love to cut you a deal and at the same time I would be more then willing to make suggestions or even tailor certain things for your company. It would be like having your own program written, but you wouldn't have to manage it. Let me know what you think!

[momunch]

Hello,

I am in the process of building an application, web based, that will do everything you are talking about and more. If you would be interested in holding out until I am done, within the next month or so, I would love to cut you a deal and at the same time I would be more then willing to make suggestions or even tailor certain things for your company. It would be like having your own program written, but you wouldn't have to manage it. Let me know what you think!

wow sounds cool keep us posted too please

[BlueRoxie]

I'm open to an on line alternative. let me kno when you are ready to take the next step.