Are you about starting an ice vending machine business? If YES, here’s a complete sample ice vending machine business plan template & feasibility report you can use for FREE to get started.
An ice vending machine business is a retail business that does not require face to face interaction with customers, and can be run 24 hours a day depending on the location. This business offers operators’ flexibility because it can be tailored to suit the lifestyle of the owner, thereby creating a balance between work, life and family.
Anyone can start an ice vending machine business. It isn’t financially tasking to start as you can purchase a used ice vending machine at a cheap price and still get the most out of it. The ice vending machine business doesn’t require any expertise or know-how, and any serious minded entrepreneur is likely to make good profits out of this business.
A Sample Ice Vending Machine Business Plan Template
Table of Content
- 2. Executive Summary
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 13. Startup Expenditure (Budget)
1. Industry Overview
A vending machine business is a retail business that does not require face to face interaction with customers, and can be run for 24 hours a day depending on the location. This business offers its operators flexibility because it can be tailored to suit the lifestyle of the owner, thereby creating a balance between work, life and family.
Entrepreneurs can also go into other businesses, while others can decide to make it a part-time business venture. A vending machine dispenses items such as ice, beverages, snacks, lottery tickets, alcohol, cigarettes, perfumes, toys, candy and so much more.
There are very strict laws regarding the sale of alcohol and cigarettes through vending machines due to concerns regarding underage buyers. In the uk for instance; cigarette vending machines have been banned, and in Japan, Germany and Italy, age verifications have been made mandatory.
If you are a close observer of the Vending Machine Operators industry, you will notice that the industry has struggled over the past decade. This decline was primarily caused by decreasing per capita soda consumption and a rise in the healthy eating index. However, the decline was offset slightly by rising per capita disposable income, most notably in 2015 when the industry experienced growth.
In addition, a change in product mix toward healthier snacks, beverages and other food items, along with increasing use of technology, helped companies spur demand from new consumers. These gains were mitigated, however, by increasing competition from external competitors. Over the five years to 2022, industry revenue is estimated to continue declining.
The Vending Machine Operators industry that ice vending machine business is a subset of is a thriving sector of the economy of the united states and the industry generates over billion annually from more than 21,064 vending machines scattered all around the United States of America.
The industry is responsible for the employment of over 54,291 people. Experts project the industry to grow at – 0.5 percent annual rate. Aramark Corporation and Compass Group are the market leaders in this industry.
A recent report published by IBISWorld shows that the Vending Machine Operators industry is in the decline phase of its life cycle. The report shows that over the 10 years to 2022, industry value added (IVA) is expected to decrease at an annualized rate of 1.4 percent.
In contrast, US GDP is projected to grow at an annualized rate of 2.0 percent during the same period. Typically, an industry is considered to be in the decline phase of its life cycle when IVA growth is below GDP growth over a 10-year period.
There are other signs that the industry is in the decline phase of its life cycle. One key indicator that an industry is in decline is a shrinking market as shown by declining revenue. Since 2005, the industry has experienced constantly declining revenue, except for a small growth in 2015.
Over and above, the vending machine industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale in one or two public facilities or you can choose to start on a large scale with several outlets in key cities.
2. Executive Summary
Justin Lance® Vending Company is a licensed and incorporated business with strong bias in ice vending. Although our business will be based in Dallas – Texas where we were able to secure a 40 by 40 feet warehouse, we have plans to spread across major cities in the United States.
Aside from retailing ice from our vending machines, our vending machines will also retail/dispense a wide range of goods at affordable prices from different brands. We will retail groceries, drinks, snacks, candy, hot beverages, cold beverages and other products.
We are aware that there are several retail outlets all around Dallas – Texas who are into vending machine business as well, which is why we spent time and resources to conduct our feasibility studies and market survey so as to position our vending machines in strategic places in and around Texas and also to offer much more than our competitors will be offering in terms of products.
We are aware of the trend in the vending machines cum retail industry and we are not only going to operate a system where our customers would just make purchase from our vending machines without getting useful data from them that will help us serve them better.
We will also go ahead to ensure that we position money changers in some of our busiest vending machine locations so that our customers will not find it difficult looking for change to make purchase from our vending machines.
We have put plans in place to operate a mini but standard call center / customer complaint center that will operate on a 24 hours a day and 7 days a week for the sole purpose of resolving customer’s complaints as fast as we can within the scope of our business.
Justin Lance® Vending Company is a family business that is owned by Justin Lance and his immediate family members. The business will be managed by his son Andrew Lance a graduate of Business Administration who has extensive experience working with one of the leading retailing outlets in the United States of America.
He will bring his wealth of experience and expertise to help build and grow Justin Lance® Vending Company to compete favorably with other leading vending machine businesses in the United States of America.
3. Our Products and Services
Justin Lance® Vending Company is in the vending machines cum retailing industry for the purpose of making profits and we will ensure that aside from vending ice, we will also make available a wide range of products from top manufacturing brands in the United States.
Here are some of the goods that will be available in our vending machines;
- Hot beverages
- Cold beverages
- Other products
4. Our Mission and Vision Statement
- Our vision is to build an ice vending machine business that will have active presence all over Dallas – Texas and other key cities in the United States of America.
- Our mission is to establish an ice vending machines business that will make available a wide range of products from top manufacturing brands at affordable prices to the residents of Dallas – Texas and other key cities in the United States.
Our Business Structure
Justin Lance® Vending Company does not intend to start an ice vending machine business whose vending machines can only be found in few outlets around Dallas – Texas; our intention of starting an ice vending machine business is to build a standard vending machine business with vending machines in strategic positions in key cities all around Dallas – Texas and of course other key cities spread across the United States.
We will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business. In putting in place a good business structure, we will ensure that we hire only people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Executive Officer (Owner)
- Merchandize Manager
- Admin and Human Resources Manager
- Sales and Marketing Manager
- Information Technologist
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Defines job positions for recruitment and managing interviewing process
- Carries out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
- Helps to ensure consistent quality of goods and products on our vending machines
- Responsible for the purchase of products for the organizations
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
Sales and Marketing Manager
- Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyze the volumes of transactional data generated by customer purchases
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding increase sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps increase sales and growth for the company
- Manages the organization vending machine network and website
- Responsible for installing and maintenance of vending machines, computer software and hardware for the organization
- Manages the organization’s CCTV
- Handles any other technological and IT related duties.
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization
6. SWOT Analysis
Our intention of starting our ice vending machine business with a dozen vending machines installed in strategic locations all around Dallas – Texas is to test run the business for a period of 3 to 6 months to know if we will invest more money, expand the business and then install 50 ice vending machines first all – around Dallas – Texas before spreading to key cities in the United States.
We are quite aware that there are several vending machines all over Dallas – Texas and even in the same locations where we intend installing ours, which is why we are following the due process of establishing a business.
We know that if proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be well – equipped to confront our threats.
Justin Lance® Vending Company employed the services of an expert HR and Business Analyst with bias in retailing to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Justin Lance® Vending Company;
The strategic locations we intend installing our ice vending machines, the business model we will be operating on, ease of payment, wide range of products, competent team members and our excellent customer service culture will definitely count as a strong strength for Justin Lance® Vending Company.
A major weakness that may count against us is the fact that we are a new ice vending machine business and we don’t have the financial capacity to compete with multi – billion dollars’ retail outlets that also run vending machine business when it comes to retailing at a rock bottom prices.
The fact that we are going to install our ice vending machines in some of the busiest streets in Dallas – Texas in an ideal climatic condition, provides us with unlimited opportunities to sell our ice and other products to a large number of people.
We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our ice vending machine locations; we are well positioned to take on the opportunities that will come our way.
Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing power. Some other threats that may likely confront us is the arrival of a new retail outlet or new vending machines in same location where ours is located and also seasonal fluctuations cum unfavorable climatic conditions.
7. MARKET ANALYSIS
- Market Trends
Ice vending machine business is part of the retailing industry and the retailing business has been in existence for as long as human started trading goods, but one thing is certain, the retailing industry is still evolving especially with the advent of technology.
The introduction of technology is of course what gave birth to vending machines. In recent time, you can find vending machines designed specifically to dispense several goods ranging from snacks to drinks to groceries and to even cigar et al.
It is now a common phenomenon for vending machines companies to leverage on technology to effectively predict consumer demand patterns and to strategically position their vending machines to meet their needs; in essence, the use of technology help vending machines businesses to maximize supply chain efficiencies. No doubt data collected from customers goes a long way to help vending machine businesses.
Another common trend in the retailing industry of which ice vending machine falls under is the pricing system. Aside from having varieties of products in a vending machine, one of the easiest ways for vending machines and retail stores to sell the goods on their racks or vending machines as fast as they can and keep re – stocking is to ensure that the prices of their goods are a bit lower than what is obtainable elsewhere.
For example, it is common to see items with prices in this format; $3.99, $99 and $199 et al as against $4, $100 and $200. As small as the price difference is, consumers are likely going to be swayed to make purchase because of that.
8. Our Target Market
Perhaps the vending machines business has the widest range of customers; everybody on planet earth has one or more things that they would need in a retail shop or from a vending machine. It is difficult to find people around who don’t patronize retail shops or vending machines when they come across one.
In view of that, we have positioned our ice vending machines in strategic locations to service the residents of Dallas – Texas and other key cities in the United States of America. We have conducted our market research and we have ideas of what our target market would be expecting from us.
Aside from ice vending, we are in business to retail a wide range of products via our vending machines to the following groups of people;
- Event Planers
- Sports Men and Women
Our Competitive Advantage
The competitions that exist in the vending machine line of business is stiff simply because anyone can start an ice vending machine business. It isn’t financially tasking to start, as you can purchase a used vending machine even that of a popular brand at a cheap price, and still get the most out of it. The ice vending machine business doesn’t require any expertise or know-how, and any serious minded entrepreneur is likely to make good profit out of this business.
Justin Lance® Vending Company is launching a standard ice vending machine business that will indeed become the preferred choice of residents of Dallas – Texas and in every other locations where our ice vending machines will be installed.
One thing is certain, we will ensure that we have a wide range of products available in our ice vending machines at all times. It will be difficult for customers to visit our ice vending machines and not see the product that they are looking for.
One of our business goal is to make Justin Lance® Vending Company a one stop shop (vending machine) for all our customers. Our excellent customer service culture, highly competitive prices, reliable and easy to use payment option and the visibility of our vending machines and competent team members will serve as a competitive advantage for us.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Justin Lance® Vending Company is established with the aim of maximizing profits in the vending machine line of business and we are going to go all the way to ensure that we do all it takes to sell a wide range of products to a wide range of customers.
Justin Lance® Vending Company will generate income by retailing the following products via our vending machine;
- Hot beverages
- Cold beverages
- Other products
10. Sales Forecast
One thing is certain, when it comes to vending machine business, if your vending machines are well stocked and centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in Dallas – Texas and we are quite optimistic that we will meet our set target of generating enough profits from our first six months of operation and grow the business and our clientele base.
We have been able to critically examine the vending machine industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projection is based on information gathered on the field and some assumptions that are peculiar to startups in Dallas – Texas.
- First Year: $240,000
- Second Year: $550,000
- Third Year: $950,000
N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and or competitors positioning their vending machines in same locations where ours. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing and Sales Strategy
Before choosing locations for installing our ice vending machines, we conducted a thorough market survey and feasibility studies in order for us to be able to penetrate the available market and become the preferred choice for residents of Dallas – Texas. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.
We hired experts who have good understanding of the vending machine business to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Dallas – Texas and every other city we intend installing our vending machines.
In summary, Justin Lance® Vending Company will adopt the following sales and marketing approach to win customers over;
- Print handbills about our vending machine and its location, and also give our vending machines unique look, by painting them with bright colors or putting a large neon sign on it, so that it is easily recognizable to customers.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get our message across.
- Creating a basic website for our business so as to give our business an online presence.
- Directly market our vending machine business.
- Join local vending machine associations for industry trends and tips
- Provide discount days for our customers
- Advertise our business in community based newspapers, local TV and radio stations
- List our business on yellow pages’ ads
- Encourage the use of Word of mouth marketing (referrals)
11. Publicity and Advertising Strategy
Despite the fact that our ice vending machines will be well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our ice vending machine business.
Justin Lance® Vending Company has a long term plan of installing our ice vending machines in various locations in major cities in the United States which is why we will deliberately build our brand to be well accepted in Dallas – Texas before venturing out.
As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Justin Lance® Vending Company;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community programs
- Leverage on the internet and social media platforms like Instagram, Facebook, twitter, et al to promote our brand
- Install our billboards in strategic locations all around Dallas – Texas
- Engage in roadshows from time to time to create awareness for our ice vending machine business
- Distribute our fliers and handbills in target areas
- Position our Flexi Banners at strategic positions in the location where our ice vending machines are located.
12. Our Pricing Strategy
Pricing is one of the key factors that gives leverage to a vending machine business, it is normal for consumers to go to places (vending machines) where they can get goods at cheaper price which is why big players in the retail industry like Aramark Corporation, Compass Group and Walmart will attract loads of consumers. Products in their stores are tagged with the cheapest price you can get anywhere in the United States.
We know we don’t have the capacity to compete with Aramark Corporation, Compass Group and Walmart or any other big retail store, but we will ensure that the prices of all the products that are available in vending machine are competitive with what is obtainable amongst retail stores within our level.
- Payment Options
Due to the nature of vending machines, there are no options when it comes to payment for items purchased other than to insert your money in the vending machine and then the machine will dispense what you paid for. We will ensure that we position money changers around our busiest ice vending machine locations so as to make change available to our customers.
13. Startup Expenditure (Budget)
When it comes to starting an ice vending machine business, the major areas that you would spend the bulk of your cash is in the purchase of ice vending machines and of course renting or leasing a warehouse facility. Aside from that, you are not expected to spend much except for paying of your employees, and the purchase of vans.
These are the key areas where we will spend our startup capital;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
- Marketing promotion expenses for the grand opening of Justin Lance® Vending Company in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring Business Consultant – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- Cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $105,600.
- Cost for the Warehouse remodeling (construction of racks and shelves) – $20,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits – ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost for Start-up inventory (stocking with a wide range of products) – $100,000
- Storage hardware (bins, rack, shelves, food case) – $3,720
- The cost for the purchase of vending machines – $25,000
- The cost for the purchase of 2 fairly used delivery vans- $20,000
- Cost for store equipment (cash register, security, ventilation, signage) – $13,750
- Cost of purchase and installation of CCTVs: $10,000
- The cost for the purchase of vending machines, furniture and gadgets for the office (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $50,000.
- The cost of Launching a website: $600
- The cost for our opening party: $7,000
- Miscellaneous: $10,000
We would need an estimate of five hundred thousand dollars ($500,000) to successfully set up our ice vending machine business in Dallas – Texas.
Generating Startup Capital for Justin Lance® Vending Company
Justin Lance® Vending Company is a family registered business that is solely owned and financed by Justin Lance and his immediate family members. They do not intend to welcome any external business partners which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.
These are the areas we intend generating our startup capital;
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from the bank
N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
It is an established fact that, the future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our most important goals of starting Justin Lance® Vending Company is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to retail our ice and other related merchandize a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Justin Lance® Vending Company will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Vending machines: In Progress
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of facility for warehouse and remodeling: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Compilation of our list of products that will be available in our vending machines / warehouse: Completed
- Establishing business relationship with vendors – suppliers of all our needed products and vending machines: In Progress