If you want to start your own vending business, you can get a piece of the 7 billion annual sales in the U.S.You could buy your own machines.Buying someone else's route will allow you to grow quickly.Before making a bid, be sure to research the vending machines and the seller's financial records.
Step 1: There are vending routes for sale.
Look online.There are websites that list vending businesses and routes for sale.You can review the company's gross revenue, inventory, and cash flow on BizBuySell.Ask the business broker if they know of any vending routes for sale.
Step 2: Why is the route being sold?
The seller's response can tell you a lot about the health of the business.If the seller is retiring, there is no reason to be suspicious.The route might be losing money if the seller doesn't have a good reason for selling.
Step 3: Take a look at the vending machines on the route.
You can inspect the machines if you ride along on the seller's route.Asking the seller for a location list is an option.You can visit the vending machines on your own.Is the machines in good shape?Is the glass broken or not?You will have to pay to fix the machines.Does the machine look like it hasn't been used in a while?The location might not get a lot of traffic if not.
Step 4: Discuss the location with the site manager.
The people signed the contract.When the seller isn't present, speak to them on your own.Do they think the vending machine is getting a lot of business?The site manager should have a sense of foot traffic.There are vending machines in remote locations.What is the relationship between the location owner and the vending route owner?It might be difficult for a new owner to come in if the relationship is strained.
Step 5: There are complaints against the vendor.
You can perform a general Internet search by visiting the Better Business Bureau.You might want to look at buying a different route if the company has a poor reputation.
Step 6: A good faith deposit is needed.
You want to show that you are serious about buying.You lose the deposit if you don't go ahead with the purchase.Medium-sized businesses typically require a deposit of between $5,000 and $10,000.
Step 7: A confidentiality agreement needs to be signed.
The seller is giving you sensitive information.They will ask you to sign a confidentiality agreement in order to sell the business.To make sure the confidentiality agreement is fair, review it with an attorney.A confidentiality agreement shouldn't last long.About right is two years.
Step 8: Look at five years of financial statements.
You can get profit and loss statements.Three years is okay, but five is ideal.Go over the statements to see how profitable the route is.If you don't have an accountant, you can look online or call the accounting society in your jurisdiction.
Step 9: Check to see if current contracts are beneficial.
You usually buy the vendor's contracts with the location owners when you buy a vending route.The contracts are about to expire.You might not get as good of a deal if you have to redo any that expire soon.The contract may have a change in control clause.If the vending route changes hands, the location owners can cancel the contract.If you buy the route, you might lose the contract if you see this clause.
Step 10: There are lawsuits against the company.
You buy legal obligations when you buy a company.If the company has been sued in the past, it is a good idea to search the court records.This can take a long time.Some states have online databases that contain information about lawsuits.You need to visit each county's courthouse in other states.They can search for lawsuits if you hire a lawyer.
Step 11: Ask for a letter.
You will be responsible for any taxes that aren't paid.A business owner can get a clearance letter if they owe taxes.A clearance letter will show you how much the company pays in taxes each year.
Step 12: You can estimate the route's value.
You do not want to pay too much for the route.Your lawyer and accountant can help you come up with a realistic valuation.BizEquity is a business software that can be used if you don't want to hire anyone.
Step 13: Discuss possible financing with banks.
Is it possible to pay for the vending route in cash?You will need a loan or other financing if not.Ask about a business loan.If you haven't been in business for a while, banks look at your personal credit when making a loan.Financing may also be an option.The sellers will usually agree to lend 30 to 60 percent of the purchase price.You can use cash or a loan to cover the rest.
Step 14: Do you know how much you can spend?
Do you have enough money to pay for a vending route?If you have no other source of income, look at the route's cash flow, which is the money you will use to pay back any business loans.
Step 15: You can make an initial bid under your budget.
Since you can expect the current route owner to make a counteroffer, this will give you room to negotiate.If necessary, walk away.Don't get caught up in the excitement of spending more than you can afford.The seller should be treated with the highest respect.They have to agree to sell the business.You should back up your bid with an explanation of why you aren't offering the seller's requested price.
Step 16: A purchase agreement needs to be executed.
The purchase agreement will contain important information, such as the purchase price and a list of inventory, and can be drafted by your lawyer.The seller's representations and warranties should be included in a properly drafted purchase agreement.If the financial records they showed you accurately reflect the business and that the seller has clear title to the assets they are selling, it's time to sell.If the facts aren't true, you can file a lawsuit.
Step 17: The owner should stay as a short-term consultant.
The current owner has a lot of business knowledge.Try to get them to be an advisor for 60-90 days.The value they add can be priceless, but you will need to pay them.A consulting contract needs to be drafted by your lawyer.
Step 18: You should attend your closing.
If you are borrowing money, review the closing statements, bill of sale and promissory note.Everything needs to be in order for your lawyer to attend.The cashier's check is ready to be handed over to the seller.