The vending machine business has many advantages, and does not require too much capital like other businesses. By preparing and implementing a proper business plan, you can surely fulfill your dream of being a successful entrepreneur. Let us look at the steps to be taken to set up this business.
Arrange for Funds
Firstly, a lot of focus needs to be given to ascertain the initial capital requirements. Once you have a well-drafted plan, you can approach a bank, or a financial institution, to finance your enterprise. The funds can help you buy a machine and pay your suppliers.
Buy Good Quality Equipment
The sales can get adversely impacted if the equipment continues to have problems consistently. At the beginning of any venture, it is unaffordable to lose customers just because there is a technical problem with your machine. So, the important thing is to buy good quality equipment which will last long.
You should consult a technical person while buying the equipment so that you make an informed decision.
Good Location is the Key
Location is the key because the sales and profits would depend on how strong a customer base you have. If your machine is in a crowded locality, then your profit margins can be higher.
So, you need to identify a good spot to start off, such as a famous or busy street, shopping mall, airport, or a business hub. Once you earn some revenue, you can increase the number of machines by tapping other high-traffic locations.
Decide What Products to Sell
You should decide which product to sell depending on the locality where your machine is located. Ideally, selling products which are bought by all age groups would be more profitable. So, soft drinks and candies are a cool idea indeed.
If you are selling products which have a very short life, then adopting good marketing strategies and inventory management becomes even more important, as you won't be able to sell them, once they lose their taste.
Your business will grow if you target your customers appropriately. Also, by offering some discounts initially, you can get more customers to shop from your machine.
Placement of the machine is the key here, and one must be aware where the target customers are most likely to be found. For example, a gum vending machine would do well at places frequented by youngsters.
Remember that client retention is as important as getting new clients, and it is possible only by delivering good service and quality consistently.
Running a Franchise
Running a franchise of an established company will help you to establish yourself faster than selling your own products. Since that company already has a decent market share for its products, you do not need to spend as much on branding and marketing their products.
In order to make this a big success, you should provide personal attention and think of creative marketing strategies. Though there is no need for owners to be present at the premises, you would be able to communicate with your customers directly if you are there. This helps in developing customer relations, and you can also get prompt feedback.
Business insurance is of prime importance for all businesses, whether large or small, and this field is no exception. If you have tied up with an insurance company, you can get monetary compensation for any kind of loss due to theft, vandalism, or fire.
Secure the Equipment
Having an insurance cover does not mean that you should be careless about the security of your machine. You can keep a security guard and/or install CCTV cameras so that you can monitor what is going on, even if you are not present at the place.
This business rarely goes into a loss; however, to gain exceptional profits, you would have to be smart with your strategies!