Vending Business For Sale

[mitchmakhan]

Located in Brisbane

10 sited drink vending machines all within a 10k radius, Only takes about 2 hours per week to do.

Sells coke, solo, sunkist etc.

Cans are bought at @ 50c and sold for $1

Returns around $400 per month (net) to owner. Figures are available.

Price: $16,500 ono

You can email me on [email protected] or phone 0408 785 797

 

[brains]

That doesnt seem a real flash return for a business at that purchase price, whats the gross $ per month?

 

[mitchmakhan]

Brains,

Could you please tell me how you are getting your return figure?

I am getting a 29% ROI i.e $4800 / $16500 x 100 = 29%

To me that is pretty good.

The gross figure is exactly double the amount of net. The cans are 50c and I am selling them at $1 did i not mention this?
obviously you will have to factor in your own travelling expenses ie fuel etc..

Perhaps I could email or fax you the figures and this might alleviate and questions you might have.

Mitch

 

[XBenX]

Some qn's to ask

How long are the site contracts for ?

Where are the sites (ie private businesses, railways, etc)

How old are the machines ? Servicing history (should also show if vandalism is a problem)

30% NET is good true but this isnt a passive investment and probably leaves somethings out.

(eg depn of machine cost, travel, value of own time)

perfect for the pensioner though (what vending machine business)

 

[Robert]

Just food for thought....

Think about this, the $400 per month ($4 800pa) you can make for a couple of hours per week driving around can offset most peoples negative geared properties.

For a few hours per week you earn another $1375 (around this mark) per month. Times by 12 = $16 500 in cash turn over.

This will increase your borrowing capacity for loans on Investment Properties. By how much will depend on a case by case basis.

Something else a small business like this will help you with is learning how to control a business financially. Let me tell you it's definately a different ball game managing finances for a business then it is for your JOB Income.

This small business, with a very little outlay and the possibility that if it works for you with 10 vending machines that you may want to expand your operation to a larger business of 100 machines or more...

Of cause you will need to complete due diligence in the process of purchasing any business.

Another due diligence question for Mitchman is, is this a WIWO or $16500 +SAV price?
And, why are you selling out?
What was your intention for buying the vending machines in the first place?

One last word, 29% ROI is a hell of a lot better then most people can get on property (not including capital growth, cause Cap Growth cannot put food on your table, or pay for the 2 month holiday to India unless you sell it {or take out a non deductable loan}).

Cheers
Robert

Disclaimer: I do not advise anyone to either buy or not buy this business, I am simply raising points to note when thinking about business acquisitions.

 

[bundy1964]

You could also finance that from a line of credit etc to make it cash flow +ive but income -ive

I do rather like the sound of the earlier posted one with 20% return and no refilling yourself.

bundy

 

[brains]

Originally posted by mitchmakhan
Brains,

Could you please tell me how you are getting your return figure?

I am getting a 29% ROI i.e $4800 / $16500 x 100 = 29%

To me that is pretty good.

The gross figure is exactly double the amount of net. The cans are 50c and I am selling them at $1 did i not mention this?
obviously you will have to factor in your own travelling expenses ie fuel etc..

Perhaps I could email or fax you the figures and this might alleviate and questions you might have.

Mitch

I dont look at businesses as ROI, i look at them as: whats the profit margin?

As Ben says this aint no passive investment with a ROI, its a business.

I think there must be other costs involved to deduct from the gross, so the margin is probably smaller than 50% in reality.

phone costs? (fixed & mobile)
vehicle costs?
insurances? (vehicle/machines..etc..)
place of business expenses?
stationary?
maintainance on machines?
accountant? (if you use one)....etc.....etc.....


All the above costs come off your margin after buying cans of drink, unless you run the business on an oily rag, in that case it probably hasnt too much growth potential. To grow is going to cost money which comes from your profit margin and reduces it.

 

[mitchmakhan]

Thank you for your replies:

Here’s a few of your questions answered.

Xbenx

No site contracts – the businesses see it as a service to their staff and workers, why not have drinks on site, saves lost time if they only have to go to the lunch room for a drink not the corner shop, which is also 50 or 60 c dearer.

The machines are 4 years old.

True yes it is not passive it is really a S type business, but only being employees we decided to get into something that was not going to cost a lot of money, and give us a decent cash flow.

Robert wrote
“Another due diligence question for Mitchman is, is this a WIWO or $16500 +SAV price?
And, why are you selling out?
What was your intention for buying the vending machines in the first place?”

The price is WIWO and I will sell you one week of stock for the price I paid for it, so you can get an idea of stock purchasing. Ie @ $120 in stock

We bought this as a test and measure as we learned a lot about stock control and customer satisfaction etc. It really is not difficult, the reason we are selling is because we are about to seal a deal on an excellent property which is double the passive income per month and basically we need the cash.

Of course you will have to do your own due diligence in regards to travel expenses, depreciation, etc I will not offer advice in this area as I am not qualified to do so.

Brains wrote:
“That doesnt seem a real flash return for a business at that purchase price, whats the gross $ per month?”
Answer: well since you asked here are the last 3 months:
Dec $983, Nov $800, Oct $931

Then Brains wrote:
“I dont look at businesses as ROI, i look at them as: whats the profit margin?”
“As Ben says this aint no passive investment with a ROI, its a business.

I think there must be other costs involved to deduct from the gross, so the margin is probably smaller than 50% in reality.”

Answer: Yes it is a Business not a truly passive Investment, however I did not say it was.

Now I’m confused with your thinking at first you say that doesn’t seem like a flash return. Can you please tell me if you don’t look at the Return what do you look at?

As you say you calculate on the profit margin, is it not possible to have a high profit margin and no return, yes if you are not making sales, surely you would then take the return into consideration to check on sales.

Should I take this as a very generalized statement that probably was not drawn to a logical conclusion, and in it’s stead a more suitable question asked.

Perhaps you do look at Businesses as, “i look at them as: whats the profit margin?”

That is your choice however maybe you are being a little extreme (or very general) in your analysis, I did not want to over analyse the business by going into every little detail about vehicle expenses(yours would be different anyway), depreciation, accountants fees etc, as I believe if you wanted to take the matter further than you would be smart enough to investigate such matters, and in the end It is not a really large expense, and does not effect the bottom line massively.

However there are no
Phone expenses
Stationary expenses
Yes there are vehicle expenses and Insurance expenses on the car as well as Accountant expenses etc, this obviously not the forum to discuss such matters, however if you would like to investigate further you are more than welcome to.

I’m sure you would not like me to bore you with how much my accountant charges me, and I doubt if I would tell you anyway.

Brains, Perhaps you could post the details and breakdown of expenses on one of your businesses so that we can see how you calculate your figures when you are buying a business,

Please note I do not say this to be smart but rather to learn how you are doing it, and If I like it I will also use it.
Mitch

 

[brains]

Im not after detail on your cost structure, but you could have put:

$ turnover - $ cost of drinks - $costs of running business = $ true nett. (taxable income)

No detail is needed at this time, just a true reflection of the costs of running your business so prospective punters are well informed.

You could have added up your costs (besides your cost of drinks) for a year and divide by 12 or 52.

Ive never heard of a property with double the monthly income of a business, must be some property.....

Good Luck

 

[D.T.]

Even if you've already sold this, I'd like to ask a couple of things about it if you dont mind me pondering.

I'd be interested in this kind of business if it were here in Perth, I cant exactly travel to Brisbane every week to fill the machine up lol. Mainly because it'd give me the extra income I need to contribute to my IP strategy.

I was wondering tho, if you wouldnt mind showing some year round data. Im fairly certain that in the winter months the demand for refreshments would be lower. Do you make enough to cover expenses during these times?

Also, what kind of "infrastructure" needs to be in place if a business tells you it no longer wants your machines there? Do you / they pay anything to have them there?

And, what would be the process if you wanted to add more machines to the business? Are these readily available, and for how much?

Plus, are they depreciable? and did you keep service / repair history?

Edit:
Added in, who was / is your supplier? Do you have a contract there, and are there other suppliers? Would the purchaser be able to use the same one at the same prices or would they have to source a new one.

Just food for thought, thats all. Hope you dont mind me asking.