Vending Machine Business Plan
If you’re starting a vending machine business or growing your existing vending operations, a well-crafted business plan is essential for success.
The following vending machine business plan template outlines the key components to include in a great plan. This template is perfect for businesses focusing on snack, drink, and specialty vending machines.
Sample Business Plan for Vending Machine Operators
I. Executive Summary
Business Overview
[Company Name] is a vending machine business in the [location] area that provides 24/7 convenient access to food, drinks and travel essentials in strategic locations including schools, offices, parks, hospitals, transportation terminals, and gas stations.
[Company Name] vending machines are a game changer. The machines provide goods with cash or credit and have 24/7 security with its built in CCTV and an emergency button that customers can press to contact the nearest police station in case of robbery, assault, or medical emergencies.
Products Served
Here are the products that [Company name] vending machines will offer:
- Snacks: Biscuits, bread, chips
- Sweets: Candies, chocolates, ice cream
- Drinks: Canned juice and soda, small bottled water
- Travel essentials: Batteries, flashlight, toothbrush, toothpaste, sanitizer, tissue paper, etc.
- Security camera and emergency button: Add-on feature that connects the vending machine to the nearest police station for emergency calls
Customer Focus
[Company Name] will primarily serve the [location] area. The business and residential demographics of the area are as follows:
- 250,578 residents
- 166,235 workers
- Average income of $67,300
- 52,000 businesses
- 85 schools
Management Team
[Founder’s Name] is a business consultant that helps businesses grow and attract more investors. He graduated from [University] with a degree in Business Administration. He also minored in Finance and Marketing. His 15 years of business experience make him reliable in starting his own company and trusted by his clients and colleagues.
[Company Name]’s team will include highly skilled technicians for the vending machines’ repair, maintenance and upgrades.
Success Factors
[Company Name] is uniquely qualified to succeed for the following reasons:
- The city has multiple businesses, schools, and establishments that are great locations for vending machines.
- Our vending machines can be strategically placed in a high-volume area with a lot of direct traffic, and will thus be highly convenient to a significant number of passersby each day.
- The management team has a track record of success in businesses.
- Food, drinks, and travel essentials are basic needs for most people in general, so the products themselves appeal to the majority of consumers and thus the market is very broad.
Financial Highlights
[Company Name] is seeking total funding of $45,000 of capital to launch.
Specifically, these funds will be used as follows:
- Machine modifications: $10,000 (machines will be leased and then modified)
- Working capital: $20,000 to pay for salaries and expenses until [Company Name] is cash-flow positive
- Inventory: $15,000
Top line projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $200,000 | $300,000 | $400,000 | $500,000 | $600,000 |
| Total Expenses | $176,390 | $230,030 | $250,431 | $261,901 | $273,920 |
| EBITDA | $23,610 | $69,970 | $149,569 | $238,099 | $326,080 |
| Depreciation | $0 | $0 | $0 | $0 | $0 |
| EBIT | $23,610 | $69,970 | $149,569 | $238,099 | $326,080 |
| Interest | $0 | $0 | $0 | $0 | $0 |
| Pre-Tax Income | $23,610 | $69,970 | $149,569 | $238,099 | $326,080 |
| Income Tax Expense | $13,344 | $19,409 | $52,349 | $83,334 | $114,128 |
| Net Income/Surplus | $10,266 | $50,561 | $97,220 | $154,764 | $211,952 |
II. Company Overview
Who is [Company Name]?
[Company Name] is a vending machine business in the [location] area that provides 24/7 convenient access to food, drinks and travel essentials in strategic locations including schools, offices, parks, hospitals, transportation terminals, and gas stations.
[Company Name] vending machines are a game changer. The machines provide goods with cash or credit and have 24/7 security with its built in CCTV and an emergency button that customers can press to contact the nearest police station in case of robbery, assault, or medical emergencies.
[Company Name]’s History
[Company Name] is established by [Founder’s name] in [year]. Living in the busy area of [location], [Founder] is always on the go and looking for a quick snack or drink, but can never find one. So, he decided to start a vending machine business to provide access to snacks and necessities to people on the go.
[Founder’s name] is a business consultant and with his educational background, years of experience and connections, he was able to start his vending machine business.
Upon incorporation, [Company Name] was able to achieve the following milestones:
- Finalize first vending machine location
- Lease equipment and install in first location
- Launch second vending machine location
- Reach break-even
[Company Name]’s Products/Services
Here are the products that [Company name] vending machines will offer:
- Snacks: Biscuits, bread, chips
- Sweets: Candies, chocolates, ice cream
- Drinks: Canned juice and soda, small bottled water
- Travel essentials: Batteries, flashlight, toothbrush, toothpaste, sanitizer, tissue paper, etc.
- Security camera and emergency button: Add-on feature that connects the vending machine to the nearest police station for emergency calls
The contents of each machine can be customized according to the location’s needs. [Company Name] also offers in-house repair, maintenance, and upgrade services for each vending machine.
III. Industry Analysis
The Vending Machine industry has experienced growth over the past few years. The growth in the healthy eating index is a driving factor of change for the industry. When the healthy eating index increases, consumers eat less junk food, which industry operators have conventionally sold. This has caused the industry to pivot to selling more health conscious foods, expanding their offerings to include baked, organic and no-sugar-added products in their machines, in addition to traditional chips, soda and candy items, to appeal to a wider variety of consumers.
Moving forward, more vending machines will likely include touch screens, remote monitoring systems and point-of-sale systems. However, the level of technology advancement and acceptance are still relatively low in this industry, providing massive room for technology growth in the future. Technology advancements will likely help companies enhance their customer experience, improve operational efficiencies and expand their customer bases by being able to expand product portfolios.
Moreover, there have been an increasing number of industry operators that cooperate with brands to customize vending machines for marketing purposes. Vending machines enable products to sell in more locations with lower costs. Therefore, some brands and retailers may take advantage of the ubiquitous nature of vending machines to meet their business goals, as well as extend brand awareness by adding distribution channels.
As external competition is anticipated to intensify. Industry operators are likely to innovate products to expand their customer bases and improve operational efficiency. Some operators may develop a market niche to provide customized vending machines and services for meeting clients’ business goals.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve residents, businesses and schools in the [location] area.
The demographics of the town in which our location resides is as follows:
| Omaha | |
|---|---|
| Total Population | 426,835 |
| Square Miles | 6.89 |
| Population Density | 3,789.20 |
| Population Male | 48.04% |
| Population Female | 51.96% |
| Target Population by Age | |
| Age 18 to 24 | 11.87% |
| Age 25 to 34 | 14.70% |
| Age 35 to 44 | 12.15% |
| Age 45 to 54 | 13.54% |
| Age 55 to 64 | 11.82% |
| Target Population by Income | |
| Income $50,000 to $74,999 | 11.16% |
| Income $75,000 to $99,999 | 10.91% |
| Income $100,000 to $124,999 | 9.07% |
| Income $125,000 to $149,999 | 9.95% |
| Income $150,000 to $199,999 | 12.20% |
| Income $200,000 and Over | 32.48% |
Customer Segmentation
We will primarily target the following customer segments:
- Business establishments: These are businesses that do not have a cafeteria, but have employees that need access to snacks and drinks during the work day.
- Schools: Students are a huge market for the business as kids consistently need snacks and beverages throughout the school day and at after school activities.
- Commuters: Local residents and tourists need access to food, drinks and travel essentials when entering and exiting the city. Having vending machines in transportation terminals and gas stations will be convenient for commuters and travelers alike. The security feature of the vending machines is also helpful in addressing emergency situations in accident and crime-prone areas of the city.
V. Competitive Analysis
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s business is not limited to its location because vending machines are portable and can be set up anywhere with electricity. Thus, it is easy to set up and distribute in all strategic points within the city.
- Great service: The company will offer in-house repairs, maintenance and upgrades to every vending machine that it manages.
- Management: Our management team has years of experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 20 years, [Founder’s Name] knows all the local leaders, newspapers and other influences. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Convenient locations
- Significant personal attention
- High-end security features
Promotions Strategy
[Company Name] will target businesses, schools and other public locations to secure locations for its vending machines. [The Company’s] promotions strategy to reach these businesses includes:
Telephone Marketing
The company will implement an aggressive phone sales blitz to target businesses and schools to let them put their vending machines in their locations.
Direct Mail
The company will create appealing marketing collateral to target businesses and schools to want to put their vending machines in their locations.
Website
The company will create a website that clearly communicates its value proposition and product and service offering. The website will also include contact forms and direct contact information for potential clients to easily connect with the company.
VII. Operations Plan
Functional Roles
[Company Name] headquarters will offer 24-hour maintenance and repair services.
The Company intends to employ [x] admin staff, [x] technicians, and [x] delivery personnel. In order to execute on [Company Name]’s business model, the Company needs to perform several functions. [Company name] anticipates using the services of X employees, divided into the following roles:
Service Functions
- Technicians
- Delivery personnel
- Customer service representatives
- General & administrative functions including marketing, bookkeeping, etc.
Milestones
[Company name]’s long term goal is to become the premier vending machine business in [city]. We seek to be the standard by which other providers are judged.
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
- Finalize first vending machine location
- Lease equipment and install in first location
- Launch second vending machine location
- Reach break-even
VIII. Management Team
Management Team Members
[Founder’s Name] is a business consultant that works for a company that helps businesses grow and attract more investors. He graduated from [University] with a degree in Business Administration. He also minored in Finance and Marketing. His 15 years of business experience makes him reliable in starting his own company and trusted by his businesses clients and colleagues.
[Company Name]’s team will include highly skilled technicians for the vending machines’ repair, maintenance, and upgrade.
Hiring Plan
[Founder] will serve as the Supervisor of [Company Name]. In order to launch, we need to hire the following personnel:
- Delivery personnel
- Technicians
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from items sold from its vending machines.
The primary cost will be cost of goods sold; mainly the items stocked in our machines.
Capital Requirements and Use of Funds
[Company Name] is seeking total funding of $45,000 of capital to launch.
Specifically, these funds will be used as follows:
- Machine modifications: $10,000 (machines will be leased and then modified)
- Working capital: $20,000 to pay for salaries and expenses until [Company Name] is cash-flow positive
- Inventory: $15,000
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
