As an entrepreneur, a vending machine business is a flexible way to be your own boss. This guide covers everything you need to know about how to set up a vending machine business, from planning to selecting the right machines to managing operations to make vending machines profitable for any business owner.
1. Do Your Research
Research will help you understand the demand for different types of vending machines: bulk vending machines, beverage vending machines, or smart vending machines, and where to place the machines. Check out The FM Taste for different vending machine options.
The vending machine market varies by location, so look at office buildings, shopping malls, and commercial spaces to identify high-traffic areas for vending machines. For those considering a vending machine franchise, research will also show you the areas with franchise opportunities for anyone who wants a few vending machines.
2. Create a Business Plan
A good business plan should cover your business goals, target market, product options, and start-up costs. Include:
- Start-up Costs: How much are you willing to invest in the business?
- Target Market: Who is your target market?
- Revenue Projections: Estimate revenue based on vending machine sales in different locations.
If financing is needed, equipment financing or equipment leasing options are available to cover the initial costs. Many business owners start with an average vending machine investment to manage costs while building experience.
3. Select the Right Business Structure
Many small business owners choose a sole trader structure for simplicity, while others choose a limited company for added liability protection. Register with Companies House if you choose the latter, and apply for a business licence if needed, especially if your vending machines will operate in public or street-trading locations.
4. Get the Licences
Check with your local authority on the requirements for placing vending machines in certain areas, and make sure you have all the necessary permits before installation.
5. Select the Right Machines
The vending machine industry has different options for various products and customer preferences. Types of vending machines include:
- Beverage Vending Machines: Popular in offices and gyms, beverage vending machines dispense soft drinks, water, or energy drinks.
- Snack Vending Machines: Stocked with popular snacks, healthy snacks, or specialty products.
- Bulk Vending Machines: Used for sweets, gumballs, or small toys in family-friendly areas.
- Smart Vending Machines: Equipped with cashless payment, inventory tracking, and data analysis.
- Toy Vending Machines: Found in family-focused venues and loved by children.
New, refurbished, or rented machines: which one is best for your start-up?
6. Place Your Machines in Strategic Locations
High-traffic areas are best, as they increase the chances of sales. Here are some popular locations:
- Office Buildings: For beverage and snack vending machines.
- Shopping Malls: For various types of vending machines, including cold beverages, snacks, and gumball machines.
- Commercial Spaces: Gyms and recreation centres are great for vending machines that offer healthy snacks or energy drinks.
With a few machines placed strategically, you can have a profitable and easy-to-manage vending business for any business owner.
7. Know Operating Costs and Maintenance
Starting a vending machine business requires an understanding of both maintenance costs and operating costs. Maintenance costs may include:
- Machine Repairs: Regular maintenance of machines to keep them running smoothly.
- Restocking: Regular visits to restock and clean machines.
- Operating Costs: Utility costs (for powered machines) and inventory.
Regular maintenance keeps your machines operational, and well-stocked, clean machines attract more customers. Many vending machine owners find it helpful to schedule restocking, cleaning, and troubleshooting.
8. Get Products for Your Machines
Choosing the right products is key to attracting and retaining customers. Vending machine products can range from traditional snacks and drinks to specialty items. Consider offering:
- Healthy Snacks: Popular in gyms, offices, and schools.
- Beverages: Soda, water, hot drinks, and specialty drinks.
- Bulk Items: For toy vending machines and bulk snack machines in family-friendly areas.
Buying in bulk reduces operating costs and increases profit margins. Remember, offering a wide range of products can cater to different preferences in your target market.
9. Equipment Financing and Leasing Options
If start-up costs are a concern, you might consider equipment financing or equipment leasing options. Many vending machine businesses start with a few machines and then reinvest profits into their fleet. Leasing machines can reduce initial costs and is perfect for a new vending machine business.
10. Set Up Cashless Payment
Cashless payments are a popular feature in the vending industry. Adding cashless payment options to your machines can increase sales by providing more convenience. Smart vending machines with cashless systems are great in high-traffic areas where many customers prefer contactless payments.
11. Monitor with Accounting Software
Using accounting software can simplify your financial tracking and monitor expenses and profits. It can track maintenance costs, sales from different machines, and other operating costs, so you can see how your vending machine business is performing.
12. Build Your Brand and Grow
Having a reputation as a business owner with well-maintained, fully stocked, and high-quality machines will increase customer loyalty and open up partnerships and premium placements.
13. Monitor Trends and Innovate
Stay current with trends in the vending machine industry, such as the growing demand for healthy snacks and eco-friendly options. Many vending machine operators introduce eco-friendly products or packaging to cater to the eco-conscious consumer. Likewise, automated retail machines and smart technology are opening up new opportunities for business owners who are willing to innovate.
Conclusion
Running your own vending machine business in the UK can be a fun and rewarding venture if done right. With proper planning, knowledge of the vending industry, and a focus on customer satisfaction, you can create a successful vending machine business that succeeds in a competitive market.
