Once you’ve chosen the franchise opportunity that feels right for you, it’s time to build a business plan that will set you up for success. But how do you go about building that plan for your vending machine franchise? These five top tips will point you in the right direction.
There are many advantages to running a vending machine franchise, not least the fact that you become part of a lucrative industry, earning a global annual revenue of around $18 billion [Cision]. For an affordable investment, you’ll be able to enjoy a dynamic, profitable career in franchising and vending. One of the best ways to succeed as a franchisee is by investing your energy into the creation of a solid franchise business plan.
Building a business plan for a vending machine franchise
A business plan will help you raise funding, if needed, and plan out the growth of your vending machine business in order to improve your chances of success. Your vending machine business plan is a living document that should be updated annually as your company grows and changes.
Your franchise business plan might be something that you share with your franchisor to get on the same page and compare notes, or something you keep for your own reference, or even something that you show to potential financial supporters if you’re in need of additional funding to make a franchise investment. Whatever the reason for its creation, all business plans of its type should include the following information:
- An executive summary
- A business description
- Product/service descriptions
- Pricing and financing details
- Sales, marketing and promotional plans
The plan should be updated and referenced regularly to keep you on track and in sync with your own vision (and the vision of your franchisor, of course). Beyond these baseline factors that make up a good business plan, here are your five tips for building a business plan not just for any franchise, but for a successful vending machine franchise...
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1. Detail the products you’ll be selling out of your machines
Whether you or your franchisor is in charge of this decision, the products that you’ll be selling should be detailed in your business plan. These details are as important as your business description, forming the backbone of what your vending machine franchise business will become. Examples of products sold in vending machines include:
- Fizzy drinks
- Hot drinks
- Alcoholic drinks
- Microwavable meals
- Stationery and school supplies
2. Include your plans for location/your operational area
This is a particularly important inclusion if you are planning to share your franchise business plan with investors, as for a vending machine franchisee to succeed and pay back their loans, they’ll need their machines to be placed in the right locations. The vending business relies almost entirely on foot traffic to make money, so get chatting with your franchisor about where your machines will be, and why these places are right for your machines.
Don’t forget to consider how the products that you’re selling will impact your location. Full microwaveable meal vending machines might do better in a hospital, for instance, than they would on a university campus.
Vending machines selling hot drinks, chocolate bars, bottles of water and snacks such as crisps may do well in locations like town centres. However, around business environments like industrial estates or office complexes, vending machines offering hot food options and sandwiches are likely to do better than hot drinks as workers seek sustenance.
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3. Dive into your financial plans (and don’t forget to consider equipment costs)
Including the important details about your finances is a must. How will you fund your franchise? What will it cost initially? What will it cost to run? And finally, what about the cost of equipment? The vending machines themselves cost money, and will vary in price depending on the model you’re working with. Standard options include [MachFast]:
- Bulk vending machines, for which costs vary from £50 up to £200
- Mechanical vending machines, for which costs start at £2000
- Electronic vending machines, for which costs start at £3000
One of the biggest mistakes that a franchisee can make is to fail to adequately consider their finances, and how they’ll afford each step of the franchising process beyond the initial investment. By baking these figures into your business plan, you’ll know exactly what to expect, and you’ll be able to feel far better prepared for it.
4. Make a plan for machine maintenance
All the best vending machine franchises in the UK understand that maintenance matters, and having a plan for maintaining and caring for your machines can really help you out down the line, even if it means you just know what to expect from a financial standpoint, or that you know which repairs are your responsibility and which are the responsibility of your franchisor. You could even make space in your business plan to detail ways of maintaining your machine and keeping it attractive and inviting to customers, such as:
- Regularly cleaning and sanitising your machines
- Avoiding placing any machines in direct sunlight
- Ensuring that machines are placed on level ground
- Ensuring that machines are placed slightly away from the wall to allow airflow
- Choosing commonly available machines so parts are easily accessible when required
- Choosing machines with a good reputations
5. Analyse the industry, your customers and your competitors
When you’re looking to build a successful and profitable vending machine business, research is key, as it would be for the construction of any strong business. That’s why your business plan should ideally include a thorough market analysis, covering the industry, your competitors and your customers. Answer questions such as:
- Within your operational area, who are your direct competitors?
- Financially, how are vending machines performing in your operational area?
- Who will your key suppliers be?
- At what level does customer demand sit?
- Which trends are currently influencing the industry?
Start a vending machine franchise and enjoy running your own business with plenty of franchisor support
These five tips for building a business plan for a successful vending machine franchise should put you on the path to vending success, and if you’ve been on the fence about investing, you now hopefully feel confident enough to take the plunge. Continue your research on Point Franchise by discovering four top tips for running a vending machine franchise, or by looking into available vending machine franchise opportunities.
Lily Sweeney, Point Franchise ©