A vending machine business entails owning and operating vending machines that distribute a variety of products such as snacks, beverages, coffee, and other items. The business owner buys or leases vending machines and positions them in high-traffic areas, such as office buildings, schools, hospitals, or shopping malls, where people can easily access them.
The vending machine collects money from clients, usually in the form of coins, bills, credit cards, or mobile payments, and then dispenses the specified product.
Steps on How to Write a Vending Machine Business Plan
Table of Content
Go Grab® Vending Machine, Inc. is a vending machine business based in Los Angles, California and with an active presence in key cities all across California. We are well-equipped and trained to serve high-quality products to customers of all ages.
Our target market includes families with young children, college students, and individuals of all ages looking for drinks and snacks on the go. We plan to operate primarily in offices, hospitals, hotels, residential areas, parks, and popular public facilities to maximize our exposure and customer reach.
To support our business, we have secured fully equipped and customized vending machines, licensed by local authorities and compliant with all health and safety regulations. Our team consists of experienced and friendly staff who are passionate about creating a memorable experience for our customers. Mildred Merrick is the founder and CEO of Go Grab® Vending Machine, Inc.
a. Our Products and Services
At Go Grab® Vending Machine, Inc., our menu features a variety of snacks, drinks, and bottled water. We also offer dairy-free and vegan options to accommodate customers with dietary restrictions. To guarantee the quality and freshness of our products, we will work with local suppliers and distributors.
b. Nature of the Business
Our vending machine business will operate the business-to-consumer business model.
c. The Industry
Go Grab® Vending Machine, Inc. will operate in the vending machine and retail industry.
d. Mission Statement
Our mission at Go Grab® Vending Machine, Inc. is to give our customers more accessible food and beverage options while promoting healthy and sustainable lifestyle choices.
e. Vision Statement
Our vision at Go Grab® Vending Machine, Inc. is to become a leading vending machine business in the United States, offering a wide range of snacks, drinks, and bottled water.
f. Our Tagline (Slogan)
Go Grab® Vending Machine, Inc. – Bring Snacks and Drinks to You!
g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)
Go Grab® Vending Machine, Inc. will be formed as a Limited Liability Company (LLC). The reason why we are forming an LLC is to protect our personal assets by limiting the liability to the resources of the business itself. The LLC will protect our CEO’s personal assets from claims against the business, including lawsuits.
h. Our Organizational Structure
- Chief Executive Officer (Owner)
- Accountant (Cashier)
- Vending Machine Operators
- Truck Driver
i. Ownership / Shareholder Structure and Board Members
- Mildred Merrick (Owner and Chairman/Chief Executive Officer) 52 Percent Shares
- Rhodes Morgan (Board Member) 18 Percent Shares
- George Jason (Board Member) 10 Percent Shares
- Victor Manson (Board Member) 10 Percent Shares
- Deborah Daniels (Board Member and Sectary) 10 Percent Shares.
- Ability to quickly adjust the menu and prices based on customer preferences
- Low startup costs compared to opening a brick-and-mortar store
- Ability to serve customers quickly and efficiently, leading to high customer satisfaction
- The business can be scaled up by adding more machines in new locations.
- Easy to manage and operate with a small team
- High mobility and flexibility, allowing the business to move to locations with high customer traffic.
- Vending machines are incorporating advanced technology such as cashless payment systems and remote monitoring to improve efficiency and customer convenience.
- Limited menu options compared to a regular store
- Fluctuations in sales during certain times of the year, such as during holiday periods and school breaks.
- The success of the vending machine business relies heavily on the location and foot traffic of each machine.
- Heavy competition from other vendors, including other vending machines and food trucks.
- Ability to expand the business by securing regular locations at popular public facilities, hospitals, offices, and schools.
- There are always opportunities to place machines in new locations that can provide a steady stream of revenue.
- The trend towards healthier food and beverage options provides an opportunity to offer healthier products in vending machines.
- There is an opportunity to incorporate new technology such as touchless payments and digital screens to enhance the customer experience.
- With busy lifestyles, there is an increased demand for convenience which can be met through vending machines.
- Opportunity to introduce new menu items and specialty snacks to attract new customers.
- Possibility to partner with local businesses or organizations to provide catering services.
i. How Big is the Industry?
The vending machine industry is indeed a big industry. The global vending machine market was valued at $18.28 billion in 2019 and is expected to reach $25.25 billion by 2027, growing at a 6.7% CAGR between 2021 and 2027. From 2019 to 2027, the market is predicted to generate an additional $6.97 billion in sales.
ii. Is the Industry Growing or Declining?
Yes, the vending machine industry is growing and available data shows that more entrepreneurs and even conglomerates are venturing into the vending machine retail business to reach out to a specific target market.
iii. What are the Future Trends in the Industry
As consumers continue to prioritize healthier and more diverse drinks and snack options, vending machines may need to adapt their menus to meet these changing preferences. This could include offering more options. Vending machines may increasingly integrate technology into their operations, such as touchless payments and digital screens to enhance the customer experience.
iv. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to vending machine business, and here are some of them;
- Art vending machines
- Beauty product vending machines
- Drinks and snacks vending machines
- Healthy vending machines
- Personal protective equipment (PPE) vending machines
- Pet care vending machines
- School supplies vending machines
- Sneaker vending machines
v. Can You Sell a Franchise of Your Business in the Future?
Go Grab® Vending Machine, Inc. has plans to sell franchises in the nearest future and we will target major cities with thriving markets in the United States of America.
- An economic downturn can lead to a decrease in consumer spending and a reduction in vending machine usage.
- Changes in consumer preferences and trends can affect the demand for certain products and potentially impact sales.
- The vending machine industry is highly competitive, and new entrants or existing competitors may impact market share and revenue.
- The COVID-19 pandemic has highlighted the importance of health and safety, which may affect customer behavior toward vending machines.
- The vending machine industry is subject to various regulations which can impact business operations and costs.
i. Who are the Major Competitors?
- AVT Inc.
- Express Vending
- Farmers Fridge
- Fresh Healthy Vending
- Gilly Vending
- Healthy You Vending
- Procter & Gamble
- 24 Hour Vending.
ii. Is There a Franchise for Vending Machine Business?
Yes, there are franchise opportunities for vending the machine business, and some of them are;
- American Vending Machines
- Fresh Healthy Vending
- Healthy You Vending
- Healthy Cravings Naturals2Go
- HUMAN Healthy Vending
- Seaga Manufacturing
- U-Turn Vending.
iii. Are There Policies, Regulations, or Zoning Laws Affecting Vending Machine Business?
Yes, there are county or state regulations and zoning laws for vending machine businesses in the United States. Before they may operate, many counties and states require vending machine businesses to get a business license. Municipal zoning restrictions may limit the location of vending machines. Vending machines, for example, may be outlawed in residential areas or confined to specific types of commercial zones.
Vending machine firms in some counties or states are required to get permits for each machine they operate. Vending machine firms may be subject to health and safety standards, such as food handling, storage, and temperature control requirements.
Depending on the region and type of products sold, vending machine firms may be liable to sales tax or other taxes. Businesses that sell vending machines must follow the Americans with Disabilities Act (ADA), which requires accessible design for individuals with disabilities.
a. Who is Your Target Audience?
i. Age Range
Our target market comprises people of all ages.
ii. Level of Educational
We don’t have any restrictions on the level of education of those who will make use of our vending machines.
iii. Income Level
There is no cap on the income level of those who will make use of our vending machines.
There is no restriction when it comes to the ethnicity of the people who will make use of our vending machines.
There is no restriction when it comes to the language spoken by the people who will make use of our vending machines.
vi. Geographical Location
Anybody from any geographical location is free to use our vending machines wherever they are located.
Go Grab® Vending Machine, Inc. will not restrict any customer from purchasing drinks and snacks from us based on their lifestyle, culture, or race.
b. Advertising and Promotion Strategies
- Deliberately Brand All Our Vending Machines with Attractive and Bright Colors.
- Tap Into Text Marketing.
- Make Use of Billboards.
- Share Our Promos in Local Groups and Pages.
- Turn Our Social Media Channels into a Resource
- Develop Our Business Directory Profiles
- Build Relationships with players in the retail industry and the public facility management industry.
i. Traditional Marketing Strategies
- Marketing through Direct Mail.
- Print Media Marketing – Newspapers & Magazines.
- Broadcast Marketing -Television & Radio Channels.
- OOH Marketing – Public Transit like Buses and Trains, Billboards, Street shows, and Cabs.
- Leverage direct sales, direct mail (postcards, brochures, letters, fliers), tradeshows, print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.
ii. Digital Marketing Strategies
- Affiliate Marketing
- Content Marketing.
- Email Marketing.
- Influencer Marketing.
- Mobile Marketing.
- Social Media Marketing Platforms.
- Search Engine Optimization (SEO) Marketing.
iii. Social Media Marketing Plan
- Start using chatbots.
- Create a personalized experience for our customers.
- Create an efficient content marketing strategy.
- Create a community for our target market.
- Regularly update our profiles with a diverse content strategy.
- Use brand advocates.
- Create profiles on relevant social media channels.
- Run cross-channel campaigns.
c. Pricing Strategy
When working out our pricing strategy, Go Grab® Vending Machine, Inc. will make sure it covers profits, insurance, premium, license, and economy or value and full package. In all our pricing strategy will reflect;
- Cost-Based Pricing
- Competition-Based Pricing
- Penetration Pricing
- Value-Based Pricing.
Sales and Distribution Plan
a. Sales Channels
Our sales channel strategy will involve using partners and third parties—such as referral partners, affiliate partners, strategic alliances in the retail industry, the public facility management industry, and freelancers to help refer customers to us.
Go Grab® Vending Machine, Inc. will also use marketing’s four Ps: place, pricing, product, and promotion. We will create visible, in-demand products that are competitively priced and advertised to our clients by carefully integrating all these marketing methods into a marketing mix.
b. Inventory Strategy
The fact that we will need regular supplies of drinks, snacks, and bottled water, means that Go Grab® Vending Machine, Inc. will operate an inventory strategy that is based on a day-to-day methodology for ordering, maintaining, and processing items in our warehouse.
We will prioritize freshness, quality, and timely availability while minimizing waste and optimizing costs. Go Grab® Vending Machine, Inc. will make sure we work with “Just-in-time (JIT) inventory” – (JIT involves holding as little stock as possible, negating the costs and risks involved with keeping a large amount of stock on hand.)
c. Payment Options for Customers
Here are the payment options that Go Grab® Vending Machine, Inc. will make available to her clients;
- Cash (inserting coins or bills into the machine to make a purchase)
- Contactless payments
- Credit/debit cards
- Mobile payments (such as Apple Pay or Google Wallet, which allows customers to make purchases using their smartphones)
- Loyalty cards
- Prepaid cards.
d. Return Policy, Incentives, and Guarantees
At Go Grab® Vending Machine, Inc., our customers are our top priority, hence our vending machine business offers a 30-day return policy for all purchases. If you are not satisfied with your purchase, please contact us within 30 days of the purchase date to arrange a return.
Returned items must be in their original packaging, unused, and in the same condition as when they were received. Please note that the customer is responsible for the return costs. Go Grab® Vending Machine, Inc. also offers various incentives to our customers, including loyalty programs and discounts for bulk purchases.
For example, customers who make frequent purchases from our vending machines can join our loyalty program, which provides exclusive discounts, special offers, and rewards for their continued business. Additionally, we offer discounts for bulk purchases, such as buying multiple items at once.
e. Customer Support Strategy
Customers’ feedback will be sought as part of our customer service strategy. This will help us provide excellent customer service to our clients. We will work in partnership with stakeholders by using a good CRM platform to do this.
Our operational plan will cover the day-to-day operations of the business, including procurement, vending machine restocking, equipment maintenance, staffing, and customer service.
a. What Happens During a Typical Day at a Vending Machine Business?
- Restocking the vending machines
- Cash Collection from the vending machines
- Maintenance of vending machines
- Inventory Management
- Ongoing Customer Service
- Administrative Tasks
- Marketing/website upkeep
- At the end of the day, the vendor cleans and sanitizes the vending machine, restocks supplies, and secures the equipment for the next day’s service.
b. Production Process
There is no production process for vending machine business.
c. Service Procedure
The service procedure for a vending machine business is focused on maintaining the machines in good working order, keeping them stocked with desirable products, and providing excellent customer service to ensure customer satisfaction and repeat business.
d. The Supply Chain
The supply chain for our vending machine business includes working with suppliers, transportation providers, and distributors to ensure that products are efficiently and effectively procured, loaded into the vending machines, and delivered to customers. Effective communication and planning are essential for managing the supply chain and meeting consumer demand.
e. Sources of Income
Go Grab® Vending Machine, Inc. will make money from selling drinks, water, and snacks.
a. Amount Needed to Start Your Vending Machine Business?
To successfully set up our vending machine in the United States of America, Go Grab® Vending Machine, Inc. would need an estimated $150,000 in funding. Please keep in mind that this figure covers all of our employees’ salaries for the first month of operation.
b. What are the Costs Involved to Open a Vending Machine Business?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $1,300.
- Business Consultant Fee – $2,500.
- Business registration fee: $750
- Vending machines: $70,000
- Initial inventory: $10,000
- Permits and licenses: $500-$2,000
- Insurance: $500-$1,000
- Marketing and branding (logo design, website, social media): $500-$2,000
- Website: $600
- Opening party: $3,000
- Miscellaneous: $2,000
c. Do You Need to Build a Facility? If YES, How Much will it Cost?
Go Grab® Vending Machine, Inc. will not build a new facility for our vending machine business because by nature the vending machine business leverages public facilities to install their vending machines.
d. What are the Ongoing Expenses for Running a Vending Machine Business?
- Product costs (supplies)
- Machine maintenance
- Location fees
- Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
- Salaries of employees
- Marketing costs.
e. What is the Average Salary of your Staff?
- Chief Executive Officer – $55,000 Per Year
- Manager – $45,000 Per Year
- Accountant – $35,630,000 Per Year
- Truck Driver – $27,100 Per Year
- Vending Machine Operators – $26,000 Per Year
f. How Do You Get Funding to Start a Vending Machine Business?
- Personal savings
- You can apply for a small business loan from a bank or other financial institution
- You can use crowdfunding platforms such as Kickstarter or GoFundMe to raise money for your vending machine business.
- Research and apply for grants that are applicable to your vending machine business.
- Consider partnering with an investor who can provide funding in exchange for a percentage of ownership in the business.
- You can also seek funding from friends and family members who are willing to invest in your vending machine business.
a. How Much Should You Charge for Your Product/Service?
We will usually charge based on the products in stock in our vending machines.
b. Sales Forecast?
- First Fiscal Year (FY1): $120,000
- Second Fiscal Year (FY2): $240,000
- Third Fiscal Year (FY3): $300,000
c. Estimated Profit You Will Make a Year?
- First Fiscal Year (FY1) (Profit After Tax): $50,000
- Second Fiscal Year (FY2) (Profit After Tax): $120,000
- Third Fiscal Year (FY3) (Profit After Tax): $180,000
d. Profit Margin of a Vending Machine Business Product/Service
The ideal profit margin we hope to make for Go Grab® Vending Machine, Inc. will be between 15 and 35 percent depending on the type of products retailed.
a. How do you intend to grow and expand? By opening more retail outlets/offices or selling a Franchise?
Go Grab® Vending Machine, Inc. will grow our vending machine business by expanding to major cities in the United States and by selling franchises not just in the United States, but also in Canada and the United Kingdom.
b. Where do you intend to expand to and why?
Go Grab® Vending Machine, Inc. plan to expand to the following cities;
- Atlanta, Georgia
- Boston, Massachusetts
- Chicago, Illinois
- Dallas, Texas
- Las Vegas, Nevada
- Los Angeles, California
- New York City, New York
- San Antonio, Texas
- Phoenix, Arizona
- San Diego, California.
We are expanding to these cities because, these cities have large populations, a thriving business environment, and a diverse consumer base that may be receptive to new and innovative vending retailing concepts.
The founder of Go Grab® Vending Machine, Inc. Mrs. Mildred Merrick plans to exit the business via family succession. Go Grab® Vending Machine, Inc. has placed structures and processes in place that will help the company achieve its plan of successfully transferring the business from one family member to another and from one generation to another without any difficulties.