Vending Machine Business Plan
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Executive Summary
Business Overview
Healthy Snacks Vending is a startup vending machine company based in the city of Buckeye, Arizona, a growing Phoenix suburb. The company is founded by Chris Garcia, a recent University of Arizona graduate with a Bachelor’s degree in Marketing and Sales. Now that Chris has obtained his degree, he is equipped with the skills and know-how to start his new company, Healthy Snacks Vending. Chris is confident that his ability to effectively communicate the value of his company and network with proprietors will ensure his new vending machine business will be a profitable venture.
As its name implies, Healthy Snacks Vending will stock healthy options in its vending machines. Chris will target several proprietors in a new commercial development that has just been built in a growing area of town. New developments include an array of corporate offices, a high school, a hospital, and several retail establishments.
Product Offering
The following are some of the healthy snack products that Healthy Snacks Vending will carry:
- Bottled Water
- Fruit Juice
- Tea
- Fresh Fruit
- Fruit Cups
- Applesauce
- Granola Bars
- Cereal Bars
- Yogurt
- Nuts and Seeds
Customer Focus
Healthy Snacks Vending will target all proprietors in the new Buckeye commercial development. It will target the owners of the commercial buildings as well as the school and the hospital. Healthy Snacks Vending’s end-users will be people in the area looking for a healthy alternative to traditional vending machine options (e.g., soda, candy, and chips).
Management Team
Healthy Snacks Vending will be owned and operated by Chris Garcia. Chris is a University of Arizona graduate with a Bachelor’s degree in Marketing and Sales. Chris has most recently been working as a manager in a local convenience store while pursuing his degree. He has over ten years of experience in the retail industry, working his way up from a sales associate to manager in the first two years. Chris is confident that his skills in management, communications, marketing, and sales will help him establish himself as a successful vending machine owner/operator. Chris will handle all marketing and sales for the company as well as manage the relationships and contracts with business proprietors, source and purchase the vending machines, and continually seek out opportunities for new locations to place vending machines.
Chris has recruited fellow University of Arizona graduate, Stephen Smith, to manage the vending machine inventory. Stephen has a Bachelor’s degree in Business Administration and is skilled in purchasing, budgeting, and controlling inventory. Chris relies on Stephen’s ability to source the most cost effective healthy snack products as well as his ability to ensure there is the right amount and mix of products available to ensure profitability.
Success Factors
Healthy Snacks Vending will be able to achieve success by offering the following competitive advantages:
- First-mover advantage in this new Buckeye development. There are currently no other vending machines in or near these recently built establishments.
- Healthy snack options will be offered, giving people a healthier option over typical vending machine snacks.
- Healthy Snacks Vending is investing in new vending machines that will take multiple forms of payment including credit cards, debit cards, and contactless payment options to give people more flexibility in the way they can pay.
Download the vending machine business plan template (including a customizable financial model) to your computer here <–
Financial Highlights
Healthy Snacks Vending is seeking $100,000 in debt financing to launch its vending machine business. The funding will be dedicated towards purchasing the initial vending machines and inventory. Funding will also be dedicated towards three months of overhead costs to include payroll, sales, and marketing costs. The breakout of the funding is below:
- Vending machines: $50,000
- Inventory: $10,000
- Three months of overhead expenses (payroll, sales, and marketing): $30,000
- Working capital: $10,000
The following graph below outlines the pro forma financial projections for Healthy Snacks Vending.
Company Overview
Who is Healthy Snacks Vending?
Healthy Snacks Vending is a startup vending machine company based in the city of Buckeye, Arizona. The company is founded by Chris Garcia, a recent University of Arizona graduate with a Bachelor’s degree in Marketing and Sales. Chris is confident that his ability to effectively communicate the value of his company and network with proprietors will ensure his new vending machine business will be a profitable venture.
Healthy Snacks Vending will stock healthy options in its vending machines. Chris will target all proprietors in a new commercial development that has just been built in a growing area of town. New establishments include an array of corporate offices, a high school, a hospital, and several retail stores.
Healthy Snacks Vending History
Healthy Snacks Vending is a new vending machines business that will be owned and operated by Chris Garcia. Chris is a University of Arizona graduate with a Bachelor’s degree in Marketing and Sales. Chris has most recently been working as a manager in a local convenience store while pursuing his degree. He has over ten years of experience in the retail industry, working his way up from a sales associate to manager in the first two years. Chris is confident that his skills in management, communications, marketing, and sales will help him establish himself as a successful vending machine owner/operator.
Since incorporation, Healthy Snacks Vending has achieved the following milestones:
- Registered Healthy Snacks Vending, LLC to transact business in the state of Arizona.
- Reached out to multiple proprietors in the area to initiate the process of negotiating contracts to put vending machines in their buildings.
- Has secured contracts with two proprietors.
- Recruited Stephen Smith to be the Inventory Manager and Kim Miller to be the Accountant.
Healthy Snacks Vending Services
The following are some of the healthy snacks that Healthy Snacks Vending will provide:
- Bottled Water
- Fruit Juice
- Tea
- Fresh Fruit
- Fruit Cups
- Applesauce
- Granola Bars
- Cereal Bars
- Yogurt
- Nuts and Seeds
Industry Analysis
The U.S. Vending Machine Operators industry is a $8.9B market in 2022 and is expected to increase by 3.5% this year. Rising per capita disposable income and increased consumer spending have helped drive industry growth.
The primary challenge for industry operators is high competition. If there are multiple vending machines in a small area, a company’s ability to differentiate its products, pricing, or payment options will be the key to success.
Changes in consumer behavior have posed a challenge for many industry operators. A growing number of consumers are seeking healthier snack choices. For this reason, vending machines that offer junk food items are seeing less revenue than those offering healthy alternatives. Additionally, less consumers are carrying cash, while a growing number prefer contactless payment options. New vending machines that take card and contactless forms of payment are likely to bring in more revenue for industry operators than cash-based machines.
Download the vending machine business plan template (including a customizable financial model) to your computer here <–
Customer Analysis
Demographic Profile of Target Market
Healthy Snacks Vending will target proprietors in a new commercial development that has just been built in Buckeye, Arizona. Establishments in the area include an array of corporate offices, a high school, a hospital, and several retail stores.
Healthy Snacks Vending’s end-users will be people in the area looking for a healthy alternative to traditional vending machine options (e.g., soda, candy, and chips).
The precise demographics for Buckeye, Arizona are:
Total Percent
    Total population 590,157 100%
        Male 284,873 48.30%
        Female 305,284 51.70%
        Under 5 years 41,749 7.10%
        5 to 9 years 43,509 7.40%
        10 to 14 years 41,324 7.00%
        15 to 19 years 43,301 7.30%
        20 to 24 years 48,119 8.20%
        25 to 34 years 106,407 18.00%
        35 to 44 years 73,788 12.50%
        45 to 54 years 64,669 11.00%
        55 to 59 years 35,109 5.90%
        60 to 64 years 27,995 4.70%
        65 to 74 years 39,539 6.70%
        75 to 84 years 17,394 2.90%
        85 years and over 7,254 1.20%
Total housing units 260,024 100%
Customer Segmentation
Healthy Snacks Vending will primarily target the following customer profiles:
- Proprietors of businesses in the area
- Staff and visitors of corporate offices, the hospital, and retail establishments
- Students, teachers, and administration staff at the school
Competitive Analysis
Direct and Indirect Competitors
Healthy Snacks Vending will face competition from other companies with similar business profiles. A description of each competitor company is below.
Snack Food Vending, LLC
Snack Food Vending, LLC is an established vending machine company that operates in Phoenix, Arizona and surrounding areas. Snack Food Vending, LLC provides a wide variety of snack options in vending machines throughout the region. Most of Snack Food Vending, LLC’s vending machines are located in busy retail locations, schools, and hotels. This vending machine company stocks traditional snacks and healthy snacks. Snacks include soda, water, candy, chips, apples, granola bars, gum, tea, fruit cups, and energy drinks. Most of Snack Food Vending, LLC’s machines have been in service for several years and are cash-based machines.
SNACKS! Vending
SNACKS! Vending is a Phoenix-based vending machine company that stocks healthy snack food options including applesauce, sandwiches, tea, water, crackers, and fresh fruit. SNACKS! Vending machines are primarily placed in areas around downtown Phoenix including hospitals, office parks, and shopping malls. SNACKS! Vending has established itself as the reliable source for healthy snack options in the city.
Healthy Eating Vending Machine Co.
Healthy Eating Vending Machines Co. offers a wide variety of healthy snacks for patrons on-the-go. Snacks include fresh fruit and vegetables, salads, sandwiches, juice, tea, water, and sunflower seeds. Healthy Eating Vending Machine Co. is a fairly new establishment with just a handful of machines placed in a few commercial locations in Buckeye, Arizona. This vending machine company offers premium healthy snacks at relatively higher prices than competitors.
Download the vending machine business plan template (including a customizable financial model) to your computer here <–
Competitive Advantage
Healthy Snacks Vending will be able to offer the following advantages over its competition:
- All Healthy Snack Vending machines will be the newest models, with multiple payment options including credit, debit, and contactless payment choices.
- Healthy Snack Vending will offer patrons a wide range of affordable, healthy alternatives to traditional junk food available in most vending machines.
- Healthy Snacks Vending will target all proprietors in the new commercial development in Buckeye, Arizona enabling the company to have the first vending machines placed in these buildings.
Marketing Plan
Brand & Value Proposition
Healthy Snacks Vending will offer the unique value proposition to its customers:
- The only vending machines offering affordable, healthy snacks in the area.
- Multiple forms of payment accepted including credit, debit, and contactless pay for flexibility in payment options.
- Moderate pricing that is on par or slightly less than the competition.
Promotions Strategy
The promotions strategy for Healthy Snacks Vending is as follows:
Word of Mouth/Referrals
Chris Garcia will leverage his effective communication and word of mouth marketing skills to create interest among local proprietors to get his vending machines placed in their buildings. He has already obtained commitments from two such proprietors who will spread the word to others.
Professional Associations and Networking
Healthy Snacks Vending will become a member of the local vending association and participate in industry events to network and build relationships with other industry professionals in the area.
Print Advertising
Healthy Snacks Vending will invest in professionally designed print ads to display in local magazines, newspapers, and direct mailers targeting local business owners that could benefit from putting a vending machine with healthy snacks in their establishments.
Website/Social Media Marketing
Healthy Snacks Vending will create and maintain an informative website that will list the products that Healthy Snacks Vending is able to provide and the locations of its vending machines. The website will also list their contact information for proprietors that may be interested in putting a Healthy Snacks Vending machine in their establishment.
In addition to the website, Healthy Snacks Vending will maintain an active social media presence on multiple channels including Facebook, Instagram, Twitter, YouTube, and TikTok to promote its business.
Pricing
The pricing of Healthy Snacks Vending will be moderate and on par or slightly below that of competitors to ensure Healthy Snacks Vending won’t be overlooked as being too expensive if other vending machine operators place their machines nearby.
Operations Plan
The following will be the operations plan for Healthy Snacks Vending.
Operation Functions:
- Chris Garcia will be the Owner and Marketing Director of the company. He will oversee all marketing and sales efforts as well as manage all contracts and client relations. Chris has spent the past year recruiting the following staff:
- Stephen Smith – Inventory Manager who will source, purchase, and stock all vending machine inventory.
- Kim Miller – Accountant/Bookkeeper who will provide all client accounting, tax payments, and monthly financial reporting for the company.
Download the vending machine business plan template (including a customizable financial model) to your computer here <–
Milestones:
Healthy Snacks Vending will have the following milestones complete in the next six months.
7/1/2022 – Finalize contracts with two initial proprietors to place vending machines in their establishments.
7/15/2022 – Finalize personnel employment contracts for Stephen and Kim.
8/1/2022 – Purchase initial vending machines for the first two locations.
8/15/2022 – Install vending machines in the first two locations.
8/22/2022 – Source products and stock the vending machines.
Management Team
Healthy Snacks Vending will be owned and operated by Chris Garcia. Chris is a University of Arizona graduate with a Bachelor’s degree in Marketing and Sales. Chris has most recently been working as a manager in a local convenience store while pursuing his degree. He has over ten years of experience in the retail industry, working his way up from a sales associate to manager in the first two years. Chris is confident that his skills in management, communications, marketing, and sales will help him establish himself as a successful vending machine owner/operator. Chris will handle all marketing and sales for the company as well as manage the relationships and contracts with business proprietors, source and purchase the vending machines, and continually seek out opportunities for new locations for his vending machines.
Chris has recruited fellow University of Arizona graduate, Stephen Smith, to manage the vending machine inventory. Stephen has a Bachelor’s degree in business administration and is skilled in sourcing and budgeting. Chris relies on Stephen’s ability to source the most cost effective healthy snack products and ensure there is the right amount and mix of products available to increase profitability.
Financial Plan
Key Revenue & Costs
The revenue driver for Healthy Snacks Vending is the payment received for each product purchased from one of its vending machines. Prices will range from $1.00-$5.00 per healthy snack item.
The cost drivers will be the fees paid to proprietors. Each proprietor contract will have its own fee schedule. However, in general, Healthy Snacks Vending will pay between 5%-15% of its revenue per vending machine to the proprietor. The expenses will be the payroll cost, vending machine maintenance cost, and marketing materials.
Funding Requirements and Use of Funds
Healthy Snacks Vending is seeking $100,000 in debt financing to launch its vending machine business. The funding will be dedicated towards purchasing the initial vending machines and inventory. Funding will also be dedicated towards three months of overhead costs to include payroll, sales, and marketing costs. The breakout of the funding is below:
- Vending machines: $50,000
- Inventory: $10,000
- Three months of overhead expenses (payroll, sales, and marketing): $30,000
- Working capital: $10,000
Download the vending machine business plan template (including a customizable financial model) to your computer here <–
Key Assumptions
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Number of Vending Machines in Operation: 10
- Total Average Revenue from All Machines Per Month: $5,000
- Average Fees Paid to Proprietors Per Year: $6,000
Financial Projections
Income Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
| Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
| Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
| Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
| Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
| EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
| Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
| PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
| NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
| Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
| Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
| Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
| Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
| TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
| Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
| Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
| Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Investment | ($180,950) | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
| Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
| Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
Vending Machine Business Plan FAQs
A vending machine business plan is a plan to start and/or grow your vending machine business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections. There are a number of different kinds of vending machines, some examples include: Candy Vending Machines, Snack Vending Machines, Ice Cream Vending Machines, Beverage Vending Machines, Coffee Vending Machines, Specialty Vending Machines, Custom Vending Machines, and Bulk Vending Machines. Other vending machine businesses include beauty, video game, water, beer and other unique items. Vending Machines are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding. A well crafted vending machine business plan is essential for securing funding from any type of potential investor. Starting a vending machine business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster. 1. Write A Vending Machine Business Plan – The first step in starting a business is to create a detailed vending machine business plan that outlines all aspects of the venture. This should include market research on the vending machine industry and potential target market size, information on the services and/or products you will offer, marketing strategies, pricing details and a solid financial forecast.  2. Choose Your Legal Structure – It’s important to select an appropriate legal entity for your vending machine business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your vending machine business is in compliance with local laws. 3. Register Your Vending Machine Business – Once you have chosen a legal structure, the next step is to register your vending machine business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 4. Identify Financing Options – It’s likely that you’ll need some capital to start your vending machine business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 5. Choose a Location – Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 6. Hire Employees – There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 7. Acquire Necessary Vending Machine Equipment & Supplies – In order to start your vending machine business, you’ll need to purchase all of the necessary equipment and supplies to run a successful operation. 8. Market & Promote Your Business – Once you have all the necessary pieces in place, it’s time to start promoting and marketing your vending machine business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. Learn more about how to start a vending machine business: You can download our example vending machine business plan PDF here. This is a business plan template you can use in PDF format. What Is a Vending Machine Business Plan?
What are the Main Types of Vending Machines Businesses?
How Do You Get Funding for Your Vending Machine Business Plan?
What are the Steps To Start a Vending Machine Business?
Where can I get a Vending Machine Business Plan PDF?
