Vending Business Pitfalls

It is said that we learn more from our failures than our successes. Maybe that is why I come across so knowledgeable to all my family and friends. I have had some turning point failures in my life that I have learned so much from and made me the person I am today. One of these failures was when I wanted to get into the vending business. I know today I would handle it in a different manner than I did 20 years ago.
The vending business is not as easy as one might think. It’s not just a matter of buying a vending machine and sticking it in some location. If you are fortunate to be successful in this business, it is the type of business that can give you great profits.

Pitfall No. 1 – Investing a Lot of Upfront Costs for a New Machine

Start out slow. Do not buy new machines. There are a lot of failed vending businesses out there that have used machines they want to get rid of. Twenty years ago, we didn’t have the Internet to browse through for used vending machines. I had to resort to the newspaper. One source today would be to go to craigslist.com.

The reason you want a used machine is that you want to keep your start up costs low. Then, if you decided after a short period, that the vending business is not for you, at least you will feel good about the lower investment you put into it. However, it is very important that you know how to fix the machines in order to keep your expenses down. One repair could start you out with a negative cash flow for a while.

Pitfall No. 2 – Bad Location = No Traffic = No Profits

Location, location, location! Just like location is important to real estate, it is even more important to the vending business. If you just go out and buy a machine without a plan to where you will put the vending machine for the best traffic flow, then you might as well just keep it at your house. Without the right traffic flow, you have no business.

In the vending business, the hot traffic areas are given to the largest vending companies. That is your competition. They have a monopoly over these mainstream areas. So this means, your odds of finding a good location may be a lot harder to find, unless you personally know someone who has a business with a good flow of people walking by it.

Pitfall No. 3 – Understanding What Sells

Once you find a good location, you need to know what people like to eat as a snack or drink. Twenty years ago, that was easier than today. People still ate a lot of junk food so filling the machines with chips or ding dongs was a no brainer. Today, some people might want to have healthier snacks.

You need to have your resources for buying your snacks at a wholesale price. Figure out what the retail price should be by comparing other snack prices with similar vending locations.

Twenty years ago, when I was a young mother with two children ages 5 and 3, I had a vending business with hopes of supplementing income to the family household budget. It didn’t work for me – most likely because I was doing this with my children in tow.

To succeed in any business, you have to have a well planned strategy. All I wanted to do was to make money. It takes more than wanting something. However, that one part of my life where I didn’t get what I wanted then, I ended up getting something more later in life – knowledge.

The Advantages of Lean Manufacturing

With the economic downturn and the growing trend of outsourcing operations to other countries, manufacturers face a variety of challenges. How can your manufacturing business stay competitive during these difficult times? The answer lies in lean manufacturing.

The Philosophy of Lean

At the heart of lean manufacturing lies the principle of preserving value with less work. Value is anything that a customer will pay for; all other things can be eliminated. Lean manufacturing can improve your bottom line by improving efficiency, lowering production costs, and getting rid of waste. How can lean manufacturing achieve these results? For one, a business can lower costs by using customer demand as a basis for production. This will result in less overproduction and less storage, which in turn leads to lower inventory costs.

How Lean Manufacturing Began

The ideas of lean manufacturing were used since before the twentieth century. With the success of his mass assembly manufacturing system, Henry Ford popularized and spread the concepts of efficiency and waste elimination. Later on, automobile company Toyota defined efficiency using a set of ideas that came to be the Toyota Production System (TPS). The basis of TPS lies in creating a perfect workflow by delivering the right things in the right quantities at the right time. TPS is known for its ability to minimize waste and for its flexibility in responding to change.

How Lean Manufacturing Can Help Your Business

One of the basic principles of lean manufacturing is using demand as a basis for manufacturing. This leads to lower costs, as well as improved productivity, less cycle time, reduced inventory, and better use of capital equipment. Lean manufacturing principles strive to create an environment where products and processes are continually improved. In this environment, the amount of waste is limited, workplace functionality increases, and customer service and product performance are improved.

Lean manufacturing can achieve these outcomes because of its ability to eliminate waste. Waste is anything that takes up resources, space and time but brings no value to a service or product. There are seven key wastes, which include inventory, transport, motion (in excess of the required amount to complete a process), waiting (for the next step in production), over processing, overproduction, and defects (inspection and repair). Eliminating these wastes simplifies work so that processes can be easily understood, executed, and managed.

Companies that have engaged in lean management have found measurable improvements in manufacturing processes. Some of these include increased earnings and profits, higher productivity, and improved customer satisfaction. Lean techniques can also streamline the production process, yielding greater efficiency and fewer mistakes.

Bottom Line

If you are thinking about implementing the strategies of lean into your manufacturing software solution, remember that it involves more than cutting the costs on the factory floor. Lean manufacturing encompasses a bigger picture to help businesses lower overall cost and improve performance. The correct implementation of lean manufacturing will lead to a more competitive and cost-effective manufacturing process for your business.