If you’re looking for a business with low start-up costs and minimal overhead, a vending business could be the right fit for you. With a little knowledge and work, you can have your own vending machine business up and running in no time.
Here are the steps you can take to get started on becoming a vending business owner.
13 Steps to Launching a New Vending Machine Business
1. Choose Your Type of Vending Machine Business
The first step in launching a vending machine business is to identify the type of vending machine business you want to launch. You might choose from the following types among others:
- Snack vending machines
- Fresh food vending machines
- Beverage vending machines
- Food and beverage machines
- Ice vending machines
- Toy vending machines
- Specialty vending machines
- Beauty vending machines
- Ice vending machines
- Candy machines
- Gumball machines
- Custom vending machines
Learn more about the types of vending machine businesses.
2. Name Your Vending Machine Business
Give your vending machine business identity so people will think of it as a well-known and respected brand. You can take the name of your vending machine business from your industry, focus on a geographical location, or use your own name among other options.
The main goal for naming your vending business is to make it sound appealing and trustworthy to business or property owners so they are more likely to work with you.
3. Choose a Legal Form for Your Business
By incorporating your vending machine business, you will limit your personal liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). You can also operate as a sole proprietorship.
The business structure you choose will have both legal and tax implications in regard to the amount of taxes you pay and which state or federal tax forms you need to file.
Read our article comparing the most common vending machine business structures.
4. Determine What Types of Vending Business You Will Start
When starting a vending machine business, you have a few options:
- Buy new or used vending machines and create your own vending machine route. With this method, you will have full control over the types of vending machines you install, what items they offer, and where they are located.
- Lease or rent vending machines from a vending machine company. With this option, you won’t need to invest in buying new or used vending equipment but you will surrender some control to the vending machine company as far as locations and pricing go.
- Buy or lease vending machines with existing locations. If you’re looking for a turnkey solution, buying or leasing an existing vending route is your best option. With this method, you will have access to pre-established customers and prime locations for your machines.
- Purchase an existing vending machine route. This is a good option if you want to purchase machines, locations, and customers all at once.
5. Write a Vending Machine Business Plan
As a vending machine business owner, you should develop a business plan.
A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, an analysis of the vending industry, financial projections, and information about the management team, among other things.
Read our article about how to write a vending machine business plan.
6. Apply for the Necessary Permits and Licenses
There may be necessary business licenses and permits you need to obtain before launching your vending machine business.
For example, you will need a sales tax permit if you plan to sell taxable items through your vending machines. You might also need a business license, which you can get from your local city or county clerk’s office.
To find out what other licenses and permits you might need, contact your state’s licensing board and/or the Small Business Administration (SBA).
You must also register your vending machine business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.
Registering with the federal government is also essential so you can properly pay taxes for your business. If you plan to hire employees, you will also need an Employer Identification Number (EIN), which you can apply for at the IRS website.
Read our article about obtaining the proper vending machine business licenses.
7. Determine Your Budget & Apply for Funding as Needed
In developing your vending machine business plan, you will figure out how much funding you need to start and grow your business.
If you have your own funds to invest in your vending machine business, you may consider taking advantage of those funds. In addition to your personal funds, other forms of potential funding for your vending machine business include traditional bank loans, SBA loans, credit cards, angel investors, and family and friends.
Read our article about the costs associated with starting a vending machine business to help you determine if funding is needed.
Read our article about how to fund your vending machine business.
8. Get the Technology & Software Needed to Run Your Business Efficiently
When you start your vending machine business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with internet access and accounting software for tracking expenses and revenues.
You may also want to invest in a vending management software system, which can help you track inventory levels, monitor machine locations and sales, and even provide customer service.
In addition, if you plan to accept credit and debit card payments from customers, you will need to invest in a credit card reader for your vending machines.
9. Purchase a Few Vending Machines
Now that you know what type of vending business you want to start, it’s time to purchase your first vending machines. You can buy new, used, or refurbished vending machines, with the price varying depending on the condition and features of the machine.
Some factors to consider when purchasing a vending machine include:
- Capacity – How many vending machine options and/or products can the machine hold?
- Refrigeration – Does the vending machine need to be able to cool drinks?
- Size – Will the machine fit in the space you have available?
10. Find Profitable Vending Machine Locations
Now that you have your own vending machines, it’s time to find profitable locations for them. You’ll want to choose high-traffic areas with a lot of foot traffic, such as:
- Shopping malls
- Grocery stores
- Laundromats
- Office buildings
- College campuses
- Nursing homes
You can approach businesses about renting space for your vending machines or look for public spaces that allow vending machines. Once you have a few locations lined up, you can move on to stocking your machines.
11. Stock Your Vending Machines
You’ll need to purchase products to stock your vending machines. If you’re selling snacks and drinks, for example, you’ll need to buy drinks and snacks in bulk. When stocking your machines, consider the following factors:
- Product expiration date – You’ll need to rotate your products so they don’t expire and customers don’t end up with stale snacks.
- Variety – Offering a variety of vending machine products will appeal to more customers and increase the chances that they’ll make a purchase.
12. Market Your Vending Machine Business to Potential Customers
Before you start selling your products, you have to let the world know you exist. The first step is to create a website so people can learn more about your products and how they will benefit from them.
After you launch your website, start promoting it through social media channels, such as Facebook, LinkedIn, and Twitter. Also, consider networking with other people in the vending machine industry through social media and blogs so they can help promote your business.
You also need to start gathering the materials needed to execute your promotions strategy, which is your strategy for attracting new customers. You will want to consider preparing for the following promotional strategies for your vending machine business:
- Banners
- Door Hangers
- Flyers
Read our article about how to market your vending machine business for more tips.
13. Get New Customers & Grow Your Business
When you promote your products, you’ll start to get interested from potential customers.
Make sure you’re ready to serve new and potential customers. Also, be sure to establish systems to ensure consistency and reduce costs. And, find and train the right people to help you grow your vending machine business.
Read our article about how to effectively grow your vending machine business to learn more.
How to Start a Vending Machine Business FAQs
Why Start a Vending Machine Business?
The vending machine industry is a $42 billion industry with a lot of opportunity for growth. Vending machines are a convenient way for customers to purchase snacks and drinks without having to wait in line or find a store clerk.
In addition, vending machines are a relatively low-cost business to start, with used machines costing as little as $500. And, with the right location, a vending machine business can be a high-profit venture.
What is Needed to Start a Successful Vending Machine Business?
To start a successful vending machine business, you'll need to purchase machines, stock them with products, find locations for them, and market your business to potential customers.
You'll also need to establish systems to ensure consistency and efficiency in your business. Also, you’ll want to find and train the right people to help you grow your vending machine business.
What are the Pros & Cons of Starting a Vending Machine Business?
PROS:
Vending machines are a convenient way for customers to purchase snacks and drinks without having to wait in line or find a store clerk.
In addition, vending machines are a relatively low-cost business to start, with used machines costing as little as $500.
With the right location, a vending machine business can be a high-profit venture.
CONS:
Vending machines can be expensive to maintain and restock.
They can also be subject to theft and vandalism.
It can be difficult to find locations for your machines that will generate enough traffic to make your business profitable.
How Much Does It Cost to Start a Vending Machine Business?
The cost of starting a vending machine business can vary depending on the number and type of machines you purchase, the products you stock them with, and the locations you choose for them.
In general, you can expect to spend between $500 and $5,000 to get started.
How Much Profit Can a Vending Machine Business Make?
A vending machine business can be a highly profitable venture. With the right location, a single machine can generate hundreds of dollars in revenue each month.
And with multiple machines, your profit potential can grow exponentially.
What are the Most Important Things to Consider When Starting a Vending Machine Business?
When starting a vending machine business, the most important things to consider are the costs of starting and maintaining your business, the locations of your machines, and your vending machine offerings.
You'll also need to establish systems to ensure consistency and efficiency in your business. Also, you’ll want to find and train the right people to help you grow your vending machine business.
Can I Start a Vending Machine Business with No Money?
It is possible to start a vending machine business with no money by finding used machines or negotiating payment terms with vendors. However, you will need to have some money to stock the machines and promote your business.
How Do I Find Locations for My Vending Machines?
The best way to find locations for your vending machines is to talk to businesses in your area about placing vending machines on their premises. You can also look for high-traffic areas, such as malls, airports, or bus stations.
What are Some Tips for Starting a Vending Machine Business?
Here are some tips for starting a vending machine business:
- Purchase used machines or negotiate payment terms with vendors to save on costs.
- Find high-traffic locations for your machines, such as small businesses, schools, hospitals, or airports.
- Stock your machines with popular items that will appeal to your target audience.
- Establish systems for managing and restocking your machines to ensure efficiency.
- Train employees to help you run your business smoothly.
With these tips, you can get your vending machine business up and running in no time!
Where Can I Find a Simple Checklist for Starting a Vending Machine Business?
A simple checklist to use when starting a vending machine business is as follows:
- Choose Your Type of Vending Machine Business: This should be based on your capabilities and how much experience you have. Remember to keep your interests, skills, and experience in mind at all times.
- Name Your Vending Machine Business: This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
- Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation, or another option will depend on your business. Ensure that you are aware of all the implications of each type of business.
- Determine Your Vending Machine Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
- Write a Vending Machine Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
- Apply for the Necessary Permits and Licenses: In most locations, you will be required to apply for a business license and/or permits before you can begin operations.
- Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
- Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
- Market Your Vending Machine Business to Potential Customers: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so you can provide them with the products they truly need.
- Get Customers & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your products.
Summary
Starting a vending machine business can be a great way to become your own boss and earn passive income. However, there are several things you need to do in order to get started, such as finding locations for your machines, stocking them with popular items, and establishing systems for managing and restocking your inventory. With these tips in mind, you can launch your own vending machine business in no time!
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