A vending route makes money on placements: each machine in a busy break room or lobby sells every day without staff, and the route's job is to keep it full, working and taking cards. Snacks and drinks keep about half their price after the product; then the location's commission, often around 10%, and card fees come off. Fresh food machines with sandwiches and salads sell more a visit but carry spoilage, and in many places a health permit and a machine that holds food cold. The plan turns on the machines and card readers up front, a van and a driver, and how fast each machine is restocked before its best sellers run out. The plan below works in machine types per $100 of sales. In the example, a Columbus vending route starts with $140,000, ends its first year about $17,100 ahead before the owner's pay, and makes about $4,200 a month at full speed. Below is each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the route in a paragraph: the locations, the machines, the goals.
- Cost each $100: product, the location's commission, card fees, and spoilage for fresh food.
- Plan sales by machine type per $100: snacks, drinks, fresh food.
- Placements are the business: a busy break room beats a quiet lobby.
- Card readers pay for themselves; most buyers don't carry coins.
- Fresh food needs cold machines and, in many places, a health permit.
- TaroStack keeps stock counted at every machine as its own site. More below.
Part 1: the business description
Gateway Vending, a made-up vending route in Columbus, Ohio, writes:
Gateway Vending runs 25 machines in Columbus: 12 snack and 10 drink machines in warehouses, offices and a hospital, and 3 fresh food machines with sandwiches and salads in two factories and a call center. Each location gets a 10% commission. In its first year it aims to reach $25,000 of sales a month.
Part 2: what $100 of sales costs
| Machine type | Product | Location commission | Card fees | Spoilage | Cost | Keeps |
|---|---|---|---|---|---|---|
| Snack machines | $48.00 | $10.00 | $4.00 | $62.00 | $38.00 | |
| Drink machines | $42.00 | $10.00 | $4.00 | $56.00 | $44.00 | |
| Fresh food machines | $55.00 | $10.00 | $4.00 | $8.00 | $77.00 | $23.00 |
Snacks come from a warehouse club and a vending distributor; drinks from a bottler's route; fresh food from a commissary kitchen, delivered three times a week. Card fees run about 4% because each sale is small. Unattended stores with a kiosk instead of machines are in micro market business plan.
Part 3: placements, the route and fresh food
The driver runs the route Monday, Wednesday and Friday, restocking from the van and pulling fresh food at its date. Each machine reports its sales through its card reader, so the van is loaded for what sold. Fresh food machines hold sandwiches cold and shut off if they warm up; the county health department permits them. Which items to stock and when to reorder is the same work as a small store's, in convenience store business plan.
Part 4: what each category earns
| Category | Sales | Variable cost | Contribution | Margin | Hundreds a month at full speed |
|---|---|---|---|---|---|
| Snack machines | $100.00 | $62.00 | $38.00 | 38% | 120 |
| Drink machines | $100.00 | $56.00 | $44.00 | 44% | 100 |
| Fresh food machines | $100.00 | $77.00 | $23.00 | 23% | 30 |
At full speed the business sells $25,000 a month and keeps $9,650, 38.6%; snack machines bring $4,560 of it.
Part 5: the first year, month by month
Fixed costs are $5,500 every month: wages for a route driver ($2,800), van fuel and upkeep ($900), warehouse storage ($500), card reader service ($400), machine repairs ($400), insurance ($250), software ($50), and other costs ($200). Sales start at 35% of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $8,800 | −$2,111 | −$2,111 |
| 2 | $10,500 | −$1,453 | −$3,564 |
| 3 | $12,300 | −$757 | −$4,321 |
| 4 | $14,000 | −$99 | −$4,420 |
| 5 | $15,800 | $597 | −$3,823 |
| 6 | $17,500 | $1,255 | −$2,568 |
| 7 | $19,200 | $1,913 | −$655 |
| 8 | $21,000 | $2,609 | $1,954 |
| 9 | $22,500 | $3,185 | $5,139 |
| 10 | $23,800 | $3,679 | $8,818 |
| 11 | $25,000 | $4,150 | $12,968 |
| 12 | $25,000 | $4,150 | $17,118 |
The year's sales are $215,400, and the business ends it $17,118 ahead, before the owner's pay. It breaks even at about $14,250 of sales a month, in the fifth month. The lowest cash point, −$4,420 in month 4, is covered by the $20,000 of working cash with about $15,600 to spare. Sales grow as placements are added, and a machine that sells little is moved; the plan's ramp is new placements, not the same machines selling more.
Part 6: the startup budget
| Item | Example |
|---|---|
| Snack machines, 12 used | $36,000 |
| Drink machines, 10 used | $35,000 |
| Fresh food machines, 3 used | $18,000 |
| Used cargo van | $15,000 |
| Opening inventory | $8,000 |
| Card readers, 25 | $7,500 |
| Licenses and permits | $500 |
| Working cash | $20,000 |
| Total to start | $140,000 |
The $120,000 before working cash is earned back in about two and a half years at full speed. A small store's numbers are in small grocery store business plan, and where stock goes missing in grocery store shrink.
Get the template
Download the vending machine business plan workbook. Four sheets: your categories, each per $100 of sales with its variable cost and hundreds a month at full speed; the first year, month by month, with sales ramping up, profit, cash, the first profitable month, the lowest cash point and whether the working cash covers it; your fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan uses one product cost per $100. Twenty-five machines, each with its own best sellers, a warehouse shelf and a van: which machine runs out of the top chip first, and which sandwiches expired, is a guess without counts per machine.
How TaroStack does it
TaroStack keeps stock counted at every machine as its own site, so the van is loaded for what each one needs.
Each machine a site. The warehouse, the van and every machine hold stock of their own, and moving product from one to another is a transfer.
Reordering in days of cover. Each item shows how many days it will last at its rate of sale, so the warehouse reorders before a best seller runs out.
Losses with a reason. Expired sandwiches and damaged cans are recorded with their reason, by item and machine.
| The job | Notebook | In TaroStack |
|---|---|---|
| What each machine needs | Open the door and look | Stock by site |
| When to reorder the warehouse | A walk down the shelves | Days of cover |
| Expired fresh food | Thrown out | Losses by reason and site |
Stock by site, transfers, reordering and losses by reason are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.