The vending machine business can be profitable in a fairly short period with the right plan and products. In the US alone, vending machines brought in over $36 billion in 2020 and are expected to hit over $146 billion a year by 2027. Hospitals, schools, office buildings, and shopping malls are just a few popular sites for food and beverage machines. Convenience food is extremely popular in places like bus stations, airports, and hotels too.
You can make money from vending machines wherever there’s a lot of foot traffic. If you have enough funding to buy more than one machine, that’s great! But if resources are limited, you can still save the profits from one machine to buy additional machines down the road. The important thing is to do your research, make a business plan, offer the right products, and build trust with clients.
Find out how to form a Limited Liability Company (LLC) or Corporation for your new venture with our step-by-step guide and links to start a vending business. For over 20 years, MyCompanyWorks has helped vending startups across the US. Read on for pro tips and start forming your company at the end of our guide.
Starting a vending business can be a great way to break into self-employment. It’s easy enough to manage as a side hustle or build into a full-time business. You only need one vending machine to start and you can buy additional machines with profits, so the business can quickly start to pay for itself. So you have the idea, now where to begin?
Before you spend a dime or sign any contracts, you’ll want to do some research on profitability, market, and which types of vending machines are the best investment. You’ll also need to contact your state’s business division for the exact requirements in your area.
Vending machines are a great source of revenue for any business. The average cost of a vending machine is about $3,000 to $5,000. This would include the machine itself, the shelving unit, and all other necessary equipment like a refrigerator or freezer for cold drinks. The average cost of maintaining and stocking a vending machine can run up to a few thousand dollars a year.
Maintenance includes things like fixing broken parts or replacing light bulbs. The profit margin on most vending machines is around 50%. This means that out of every dollar you spend on your goods in a vending machine, half the money is profit.
Owning a vending machine is just part of your business. Before you spend any money, the following items need to be considered.
A vending machine can be placed in all sorts of locations, but there are some that are better than others. The best placement is in high traffic areas, so bus stations, airports, hotels, and grocery stores are just a few options to start making money. People who travel often need to eat on the go and may not have time to go into a restaurant or convenience store. Machines with snacks and drinks are very profitable when they’re set up near travelers.
IMPORTANT: You must have permission from site owners to set a vending machine on their property. A signed contract will help prevent confusion and conflicts over machine locations.
Keep the following in mind when naming your company: the name should reflect what you do and should also be easy to remember. Choose a name that describes the nature of your business. A name like “Ace’s Vending Machines” tells clients exactly what you’re selling. Try out names on your friends. Ask them if possible names communicate your message clearly. If they didn’t know you, would they be able to identify your products or services?
The most common business type for startups is the Limited Liability Company or LLC. A vending business LLC would be a good fit for most small businesses, but if you’re not sure which business type to start, an accountant or lawyer can discuss options and help you decide.
TIP: Consider forming an LLC or Corporation to protect your personal assets from tax liens and lawsuits.
The short answer – is yes. A business plan is a piece of the puzzle to let investors know your idea and give them the assurance that you can generate profits. It also helps you find an investor who shares your vision. To get financing, you will need a business plan that spells out your goals and how your business is going to meet them.
The original business plan may change over time, but it’s easier to write an effective plan at the beginning of the business. This is where business plan templates can come in handy, as they’re designed to be customizable and flexible enough to fit the needs of your company. Check out our Business Planning Resources for help and more information.
Every good business plan includes an executive summary that includes your company’s mission statement and a description of your company and the benefits you offer. Include more specific details, such as pricing and marketing strategies, in the other sections of the plan. The marketing strategy should detail how you will promote your services to potential clients, while the financial portion explains startup and ongoing costs, expenses, and revenues. A business plan is invaluable for organizing and tracking your goals, improving your methods, and collecting the tools and resources you will need for achieving your objective.
NOTE: Investors may want you to find a location – Step 5 – to estimate build-out and rent costs before you apply for funding, but you can write a basic plan that can be updated for each application.
Initial costs for a vending company can be fairly low compared to other businesses. Top-notch machines can run around $10,000, but you can save a lot of money on refurbished machines. If you’re willing to start with used equipment, you could register and open your business for around $2,500, depending on your state’s fees and requirements. If you’re leasing space, you’ll also have to pay for utility connections and any inspections required by your county. See costs to register an LLC or Corporation in your state here.
TIP: A solid business plan should include revenue and expense projections to determine how much funding you’ll need. Fundraising doesn’t have to be just for startup costs. Many small businesses apply for funding for expansion and may do so more than once. A creditworthy business is what impresses investors, so make sure bills, payroll, taxes, and business fees are all processed on time.
A unique Federal Tax ID, or Employer ID Number, is assigned to each US business that employs workers. The EIN is used in conjunction with the company’s name and address to identify the company. You can apply for a Tax ID on the IRS website you have a Social Security Number. International business owners may have to provide additional verification requirements.
TIP: Add an EIN application to your business startup order, and we’ll do the rest.
An EIN is one of the first things you should apply for if you want to open a business bank account, hire employees, and register to pay taxes. If your business is registered as a ‘’Doing Business As’’, or DBA this won’t be necessary unless you hire staff. If you don’t have an EIN, your personal social security number will be required in place of the EIN. To keep personal and business matters completely separate, we suggest that all businesses should register for an EIN.
All business payments and deposits should be run through a business bank account. When you have established solid payment history, you can also apply for credit cards in the business name. We have partnered with several business banks to make the process easy. You can also contact your personal bank or credit union to research their business options. There are many online business banks too.
Business requirements depend on a variety of factors, so it’s worth taking the time to interview a few before deciding which solution works best for your company.
If you have a garage, you might be able to start your operating your business at home. Check with local business authorities to be sure, but working out of your garage can save a lot of money. If you’re not able to run your business at home, contact a commercial real estate broker to locate a space that fits your budget and need. Check out our Vendor Network for commercial leasing brokers.
Businesses may not need to be licensed by the federal government but will have to obtain a state permit to set up and run vending machines. Search local and state websites for licensing requirements, or order a business license compliance package with your business formation order.
The price of vending machine insurance varies by region, with the average cost coming in between $300 – $1000. Common business insurance policies include Owner’s Policy, General Liability, and Workers’ Compensation, but there may be other required policies in your state. If you need help finding a business insurance agent, check out our partners Hiscox and netQuote. They offer free quotes and are happy to help you find the right business insurance for your company.
If you’re doing your own books, accounting software like Quickbooks Online is simple to set up and use. You can also hire a professional bookkeeper or accountant to do the work for you. Visit our Vendor Network for a list of recommended and qualified financial experts in your area.
For the small business owner, paperwork can often be a hassle. Everything from invoices, receipts, and bills to legal and business documents need to be organized and readily accessible. There are many ways to organize paperwork, from using cloud storage to the good ol’ paper filing cabinet. Start a system that’s easiest for you to manage. You’ll need to file paperwork in the following categories:
IMPORTANT: All tax returns should be kept for at least 7 years after they are filed. Most other paperwork can be kept for 3 years.
You can skip this step if you’re starting out alone. Bookmark this page for when you’re ready to hire additional help.
Posting jobs online is a good way to find both full-time and part-time employees. Some of the best platforms for this are Indeed, LinkedIn, and your local job advertisement sites. Keep these tips in mind before you post your job ads for the best results:
Take the time to spell out your expectations in a company handbook. Things like proper conduct, uniforms, reviews, and policies and procedures should be clearly defined. You can save a lot of time and effort by using employee training templates to write your handbook.
Job descriptions should be clear and easy to understand. When you have a written job description, it’s an easy reference guide for both you and the employee. Each job description should include expected tasks to be performed. Will your technicians need to be able to lift heavy objects? Does your business run after regular business hours? What are the uniform requirements?
These items can be addressed in each job description, so there’s no question about expectations. List as many details as possible to clearly define employee roles and help potential candidates decide if the vending business is right for them.
TIP: Posting a clear job description in job ads will reduce unqualified applications and unnecessary interviews.
You may receive hundreds of resumés for one job opportunity. Be prepared to weed out those who don’t even have the skills required for the position. Indeed.com has free recruitment tips to help you find the right help for your business.
NOTE: On average, small businesses interview between 6 and 10 candidates to hire one employee.
Having a website is like posting a digital Yellow Pages ad. Since the internet is usually the first place someone looks for information, an active website can be used to share contact information, products, and policies.
Since you’ll be working directly with other businesses, research business-to-business (also called B2B) sales to find out how you can use email and social media marketing to reach qualified prospects.
Vending machine startups are a great idea for many entrepreneurs. Use our exclusive Startup Wizard to work through the step-by-step process to form your LLC, Corporation, or DBA in any state. The Startup Wizard is included free with every vending business startup package.
Starting a vending business can be a great way to make money. You’ll need to invest in tools, equipment, licenses, insurance, and recruiting before you start generating revenue. Sticking to a solid business plan will help you to track progress, fix what doesn’t work, and apply for funding with investors. Researching your local market will help you decide on what kinds of machines and products you want to carry.
Writing your business plan, developing a contract, practicing your sales pitch for new clients and investors, and working on a regular schedule to keep a good rapport with site owners are all important tasks for a profitable vending machine venture.
MyCompanyWorks can start your business startup order in as little as one business day. We offer a complete business package for vending machine owners. Startup wizard, all the forms, and help you’ll need to run your business available in one place. You can find lots of helpful articles and resources to run a successful company on our blog.
Don’t see what you’re looking for? Go to our Frequently Asked Questions (FAQ) page for answers to common startup questions. Call or chat with our friendly support team to start your vending company today.
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This entry was posted on Tuesday, April 26th, 2022 at 12:56 pm and is filed under Starting A Business, Incorporation, Limited Liability Company, New Business Ideas. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.