‘Six figures' or $100,000 or more in pre-tax earnings per year is seen as a reasonably good benchmark of success by many entrepreneurs. They want to know if they will have a realistic chance of hitting this income level within a few years, before they put in their time and capital into a new business.
Let's take a look at some of the factors that separate the operators with six figure vending business income from the rest:
1. Part Time or Full Time?
It's common for entrepreneurs to manage a vending business while also keeping a regular job. Some vending business operators make a nice income to supplement their day job salary. However, if your goal is to reach the $100,000 profit level, you will probably need to go full time eventually.
2. Understand Vending Machines
Successful vending operators understand how their equipment work and closely follow industry developments. Great knowledge in these areas allows the business operator to acquire good quality machines at the best prices and to organize their maintenance effectively.
3. Branding
If you establish a name and a reputation for yourself over several years, new accounts will come to you instead of you having to go out and get them all the time.
4. Organization
The big earners in the vending industry are organized and manage their time well. Computer systems and software can be used as a way of collecting data that can help a vending business owner make crucial decisions that can affect profitability. While some see vending as a way of earning easy passive income, the most successful players know that this comes many years down the road and that a lot of hard work is needed before you can get to that point.
5. Master the Art of Sales
Getting new locations comes down to making an attractive offer and having solid sales skills. To be successful, you need to fine tune the art of scoping prospective locations, getting appointments with decision makers and selling them the idea of what your machines can do for them and their business. Good vendors find ways of making their machines more marketable such as working in cooperation with charities.
6. Hiring Employees
While you can start off doing everything yourself, you will soon find that to scale your business up to the six figure income level you will need to hire reliable staff. It might prove to be more efficient to have them do the footwork for you while you concentrate on growing your business.
7. Customer Relations
Always maintain the highest standard of customer service. Service machines regularly and keep them clean and presentable. Never give decision makers at your locations any excuse to ask you to take your machines off their premises. If you maintain good relations with managers at each location, you may even be able to sign them up for additional machines. This can be an easy way of increasing revenue without having to find new clients. You can also get referrals from your clients if you keep them happy.
8. Commissions
Most vendors who receive a decent level of income learn how to deal with the issue of commissions. Selling your machines on the advantages that they offer to the staff, management and patrons of an establishment is better than selling them on a percentage of the takings. Successful vending business operators do realize, however, that some locations are so good that a commission can be justified if it is required to win the account.
9. Attention to Detail
The vending business is a numbers game and the top entrepreneurs in this industry realize what variables they need to focus on to improve income levels. To get to a decent level of earnings, you must maximize your locations, maximize the quality of your locations, reduce the frequency of machine breakdowns, reduce commission paid to location managers and maximize the efficiency of your employees.
Getting the right product mix, or category management is also crucial so that your stock sells well and so that you don't run out of some items quickly, while others are slower to sell. In this way, you can increase sales and reduce the frequency of visits to re-stock machines.
10. The Right Attitude
Determination and willingness to learn are important attitudes for a vending operator to possess. A vending business can be tough in the first year and you have to get used to constant rejection as you try to place machines. The key to success is to learn from failure and rejection and to see them as learning opportunities on how to improve and refine your systems until you find ones that work. Keep trying again and again and success will come to you.
Now we're back at the question: Could you earn a six figure vending business income? With the low barriers to entry and low start-up costs that this industry offers, it is definitely an opportunity worth considering.
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