Brake problems

It is a surprisingly rainy week for July in Texas. Rain usually decreases my sales, especially at any vending machines located outside. Wet dollar bills do not work well in the machines and the customers usually don't like getting wet either. I have one machine that needs repair. The brake on the motor is not functioning properly, so the cradle coasts sometimes. This causes the selection to fail to vend one time and then when someone makes the next selection, the can that didn't vend falls along with the new selection. So one person looses money and the next person gets a free soda. This only happens about every 4-10 times, but it has to be frustrating for the person that it happens to.

I never realized how useful all of the farm work would become. Now when one of my vending machines has a malfunction, I get my tool bag out and fix it. The vending machines are quite similar to some of the things my dad and I fixed back on the farm. I do not have a fear of taking things apart. I have found that many of the motors and cradles and things like that can be easily removed and taken to a local shop to be repaired or replaced. That has saved me a lot of money in service calls. Don’t be afraid of your machines. Always use caution and unplug the machine before servicing it to reduce the risk of shock and other injury.

Coin and Dollar Bill Jams

Today has been a frustrating day on the soda route. Three of my machines were malfunctioning. It is amazing that they always seem to malfunction at the same time.

The first machine I went to this morning had a major coin jam. It had been jammed for a while because there was more coins in the shoot than in the coin collection box. Someone had put pennies in the machine and then someone else put a popsicle stick in it. No one called me even though I have my number and a complete refund policy posted on the machine. I really do not like taking people's money. I would rather the machine function properly and have satisfied customers. Now it will take a while to regain the customers' trust.

The second machine I went to also had a coin jam. Again someone had put pennies in the machine. Pennies just cause jams. They are supposed to fall through, but a lot of times they get jammed. As I was fixing the machine, a lady from the rental office came over and said that they had lost three sodas worth of money. That is frustrating because they have my number and their phone is just 50 feet from the machine. Many times the office will call me when there is a problem, but for some reason they didn't. She said a lot of residents had complained. Since she was new, I explained to her that all they have to do is call and I will repair the machine within a few hours. If they take the names of the residents down, I would also return their money to them. A gentleman called and told me the machine was broken. I returned his money to him. He was surprised, but happy. Customer service is very important to me.

The third machine just had a dollar bill jam. Fortunately, when that happens only the person who put the jammed bill in loses money. No one else can use the dollar bill exchanger. They have to use coins. They might be frustrated with the inconvenience, but at least they don't loose money and they will generally come back with change if they are thirsty.

All of the problems were easy to remedy. They are also to be expected. It is just a thing you have to be willing to deal with when working with mechanical equipment.

Work Ethic

To be your own boss requires a strong work ethic. You will be telling yourself when to go and check the machines, when to fix them, and when to get more inventory. There is no one yelling at you telling you what to do. I find it very liberating to be my own boss and make my own schedule, but sometimes when it is 30 degrees outside, or when it is 105 degrees outside, it is hard to get motivated to go and load the sodas. I was blessed with a very good childhood that taught me how to get out there and work, no matter what the conditions or the job.

When you are raised on a farm/ranch, you learn to be almost self-sufficient, producing your own food and fixing everything that breaks. When I reached high school and was taking drivers’ education, we had to change a tire as part of the requirements. By that time I had lost track of how many tires I had changed on the farm. Once one becomes flat you are sure to have more flats. I remember one summer in particular I had to change a tire at least once a week on various pieces of equipment and our vehicles. My father always let my brother and I help him fix the implements when they were broken. At first, we were just the gofers getting him the wrench or pliers or whatever tool he needed. Then he started letting us actually take the bolts and nuts off of things. We had a combine that we would have to change the head on all of the time. It required crawling up into the combine and taking out at least 4 bolts. Dad always made my brother and I do it because we were smaller and it was easier for us to crawl up in there. That was the scariest job.

My beginnings as a farm girl

When I first set up this blog, my goal was to tell the story of how I got involved in the soda vending business. I have been having so much fun telling how the current business is doing that I have neglected to tell how I got started. I am going to try to post a little about what is currently happening interspersed with short tidbits about my journey to this point. Below is the first little tidbit.

I was raised on a farm/ranch in the Texas Hill Country near Fredericksburg with my brother, parents, and grandparents. We raised cattle, sheep, goats, and hogs and farmed the food stock for them. I also raised chickens. As long as I can remember, I was given something to do to help out my family. We had milk cows that we milked for our own consumption. I remember my grandfather letting me help him milk the cows before I even got to school. By the time I was 7, I had my own cow to milk. My other grandfather taught my brother and I how to plant a garden when we were 4 or 5. We started helping harvest corn as soon as we could sit still enough to brush off the corn silks. When we could handle a knife, we started helping to butcher.

The new soda machine is up and running

We got the new soda machine up and running this week. We first put the machine on location on Tuesday. Everything worked great. The only thing that I had to fix was the drain. I guess when the compressor was changed out the plastic drain piece popped off of the rubber tubing that directs the water into the collector. After I tried for a while to stick the drain piece in the tube, the owner of the location brought out a heat gun and we warmed the rubber slightly. He was able to get the two pieces together. He was fascinated that I was working on the machine. I have found that a lot as a mother with children running my soda vending business. No one expects me to get down and dirty and fix some of the minor problems that occur with the machine. I find it amusing that there is still a stereotype about women working with equipment.

Many months ago, when Breanna wasn't walking yet, I placed a machine with a cage around it. I needed to do some drilling to adjust the opening in the cage that allowed people to put the dollar bill in the slot. I had Breanna on my back in a baby sling and I had this big 18 volt drill and was drilling away at the cage. I guy came in a watched me for a while. He just couldn't get over the fact that I was using this drill, especially with my little one on my back and the other two kids running around beside me. He was a very nice gentleman and asked if he could help. I was tempted to say that I could do it myself, but I decided to let him help. He did a very good job and my machine and cage are working great. Don't be surprised if you get some strange looks when you take your kids with you to do your route. Most people look at you surprised and then they decide that it is a really neat thing that you can take your kids with you and work. Enjoy!

We went back today and checked the machine. It is running great. The owner had asked us to change the A&W Root beer selection to Country Time Lemonade. The strange thing is today when we got there, we had sold more A&W Root beer than any of the other selections. I changed it out like the owner ask. We will see in two weeks how the new selection is doing.

Delay in placing my sixth soda machine

Today was supposed to be the day that my sixth soda machine was placed. It did not happen. The person I bought the machine from was testing it this morning and found out that the compressor was not functioning. I was hoping that since I gave him almost two weeks that he would be able to test the machine before now. The good news is that he will give me a completely rebuild compressor. That should save me time and trips to the new machine once it is placed.

Always expect delays and problems when placing a machine at a new location. Something always seems to go wrong. It can be as simple as the weather to as complex as multiple malfunctions. If you expect something to need to be taken care of, you will be very much surprised and very happy when everything works perfectly. It is worth it.

Used versus Free soda machines

Today, as my friend that I am helping start her soda business and I were talking, she brought up an interesting point. She said that she will probably buy her next machines from someone rather than accept any more free machines. Now why would paying for a machine actually make better business sense than taking a free machine?

She has gotten two soda machines for free. One someone had given to our church for some reason and the church didn't need it anymore. The other was given to her by a business that did not want it around any more because it was vandalized.

She was actually given a third machine by the same business, but found out that it belonged to Coca-Cola. Beware if someone is trying to give you a machine. If it is a Coca-Cola machine, look inside it for the paperwork that says that it belongs to Coca-Cola. They lease machines to people to put onto location. These machines often get abandoned by the person running the route, especially if they have been vandalized. Coca-Cola wanted their machine back and came and picked it up from her. She chose not to keep it once she found out it had an owner.

The other two machines did not have an owner that wanted them, so she took them and put them on location. She has had a lot of difficulty with the machines. The compressors work, but she had trouble with the computer board in one machine. Both machines had issues with the dollar bill exchanger and the coin mechanism. Also, one machine had issues with the cradle that holds the soda and the motors. After it was all said and done, she had spent a lot of time and a decent amount of money repairing the machines to get them up and running. They were still cheaper than most used machines, but was the hassle worth it?

To my friend, it was too much hassle. She spent many hours fixing the machine, running various parts back and forth to a company here in Dallas that repairs vending machine parts. It was very stressful for her to try to figure out what was wrong with the machines. I was able to tell her a lot about what part was causing the problems, but they still had to be repaired. In addition, there was quite a bit of down time after the machine was placed. This is not good for business. People do not like loosing money in the machine.

So, the moral of this story is that getting a machine for free seems like a great break, but you have to be prepared for problems. Take the machine home or to your storehouse and make sure everything is working perfectly before placing the machine. This means plugging it in several days and making sure the compressor doesn't freeze up, the machine cools properly, that every selection works, and that the coin mechanism and dollar bill exchanger function properly. This gives you the very best chance of having it run properly when placed. Don't forget to clean the machine well and do any touch-up painting while you have it.

So what is the advantage of buying a used machine from someone? If that person offers a warranty, he or she has to deal with all the hassles if there is a problem. Make sure when purchasing a machine from someone that you get some references and that you get at least a 60 day warranty. Most of the problems will occur shortly after moving the machine onto location.

Vandalism and Theft Prevention of Soda Machines

The Fourth of July weekend was not as good this year as last year. I think that I might have some competition at one of my apartment complexes. Sales are down quite a bit at one particular complex. Often there is someone that will decide to sale soda and candy and things from their apartment. I will just have to keep providing good service and hope that they get tired of people knocking on their door all of the time.

Someone asked about vandalism and theft problems. The fourth machine that we placed was broken into within a week of placing it. Someone was able to break into the dollar bill exchanger by prying it open. See the picture of the damage. They only got about $15 but cost me more than $100 in replacement cost. I will try to take some pictures of our newly designed cages that offer more protection to the dollar bill exchanger. We have since put a metal plate over the dollar bill exchanger with a cut out for people to stick the dollar bills in. There is not enough room for someone to get their hands in it to get out the money. Since we did that we have not had any problems with that location. That was about 10 months ago.

Thieves are looking for an easy target. They don't want to get caught. Why bother something that is going to take 15-30 minutes to get into when they can go down the street and find something that will take less than 5 minutes to get into. So the goal in theft protection is to make your machine a lot of work to break into so they will move on to another machine down the road. I know that the cages that we have built can be broken into if someone is determined, but I am banking on them not wanting to put that much effort into their endeavor.

I only have cages on the machines that are located at apartment complexes. I have machines at businesses that I have not needed to place cages around because they are in more secure locations and only available during business hours.

Vandalism is a little harder to deal with. I consider vandalism to be anything that disrupts the functioning of the machine without loss of money or product that was placed in the machine or that defaces the machine in some way. The forms of vandalism that I have encountered are people putting things like leaves, pennies, sticks and so forth in the coin slot or sometimes dollar bill slot. The only way I have found to fight that is by responding whenever someone calls and says there is a problem. For about two weeks, I had someone putting things in one of my machines everyday. I just kept going to the machine every day and fixing it. They eventually gave up. I always put a sign saying that "Coin jam is fixed." or something like that. Then I put the date that I fixed it on the sign. I have actually laminated the sign and then I use a sharpie to write on it. Then I can take it down and erase the writing with alcohol. This seems to help a lot. People then know that I respond to any problems and they are more likely to call me in the future.

I have also had people smear the machine with mud, throw fingernail polish on it, or smear the buttons with paint (I actually think that was just someone not paying attention to how dirty his hands were when he pressed the button). I just clean it up. I keep cleaning solution in my bucket that I take with me when I service the machines. So far, I have not had anything that I couldn't remove with a mild cleaning spray and some elbow grease. I think that the cages also help with the defacement vandalism because people cannot reach the machine very easy to deface it. The cage doesn't provide a solid work surface for their "artwork".

We have been blessed with very little vandalism and theft problems. I try not to let any of the problems that I do have get me too upset. I have found that if I just calmly try to figure out how to fix it, life goes a lot easier. I knew that there would be problems with the soda machines. I think that if I didn't realize that there would be problems, I would be much more upset when things go wrong.

The Fourth of July

I checked my soda machine that often gives me problems at one of the apartment locations. It was functioning great. Already some of the inventory had moved from the previous day. It was 101 F here yesterday. The pool was open. I am looking forward to filling it up tomorrow.

A down note: one of my other apartment locations did not have the gym open yesterday. My soda machine is located in the gym across from the office. It gets great visibility, but because of some recent criminal activity at the apartment complex, the office has decided to close the gym when they are not in. That really has hurt sales at that location. I have a cage on the machine and believe that it would withstand some serious assaults, but the apartment complex is still leery of letting me place it outside so that it is available 24 hours a day, 7 days a week. When placing the machines, keep in mind that many people work the same 8-5 or 9-6 that the apartment complex offices work, so they do not have a chance to buy a soda if the machine is located in a spot that the office closes when they leave. It is a more secure location for the machine, but it cuts into your sales revenue. So if you are confident in your anti-theft/vandalism precautions, try to locate the machine in a location on the property that has 24/7 access, or at least access from 6 AM to 10 PM so that you can generate more sales.

Busy Soda Vending Weekend

Last year I had a huge spike on the July Fourth Weekend in the amount of sales in sodas, particularly at one of my apartment locations. That particular machine sold about three times more soda per day than normal over the holiday weekend. I hope that this year is a repeat of that. In preparation for the holiday weekend, I am filling up my soda machines located at apartment complexes. I will also check the coin mechanisms and bill validators of the machines in the early afternoon on July 4th. Last year there was a coin jam. When a lot of people put money into the machine in a short amount of time, there is invariably a coin jam. Someone always decides to put three or more coins in a one time because they are in too much of a hurry. I want to head off any problems before they get bad. People do not like the machines to steal their money, and I do not want to steal their money. I want to provide them with a cold drink of their choice and earn their money. Hopefully, with these precautions, this will be a blockbuster weekend for soda sales.

Remember, keep your customers happy by providing them a working machine that vends cold soda every time they put their money in. I have a refund policy in which I will refund their money if they call a number that I have posted on the machine. I want to know when the machine is broken and I want to let them know that I care about maintaining it. I have chosen to deal with used soda machines instead of the fancy new soda machines that can notify me immediately if there is a problem. Those new machines are more expensive than I could afford right now. I wanted to start my business without debt. From yesterday's post, you can see some of the calculations that I have done to see what I could afford to start my business. The older used machines vend cold sodas just like the new fancy ones. They are simple to repair which also saves me money. Most of my locations are either outside, or in the laundry rooms and these old machines can handle the elements and abuse that they suffer.

Excel snapshot of potential profit for my newest vending location.

Here is a picture of my Excel file of my analysis of my newest location. Across the top I have the number of sodas that might be vended. Since this is a location without a lot of people, I am expecting just a few vends a day. The next row is the expected income based on selling the soda for $0.65. Right now I am able to get the soda at $0.27 which gives a profit of $0.38 per can of soda. The next row shows the net profit per day. The net profit per month is based on 24 working days a month. The profit per year is based on 12 (24 day months).

The next group of rows shows how many days that I could theoretically go between services. I do not like to leave the machine for too long, so I would go at least once a month. This assumes that all of the selections are purchased at equal frequency which is not always the case. Often one selection will run out before all the other ones.

The next group of rows shows how many days of income it would take to pay for the gas to service the machine based on various gas prices.

The next group of rows show the expected profit per month taking gas prices into account. Finally, the last group of rows shows the extimated profit per year after taking the price of gas into account.

I hope that this is helpful. I also hope that you can read the Excel numbers easily. I will try to find a better method of placing them in my blog.

Always look for opportunities to expand your vending business.

Last week while we were purchasing our new van, I talked to the owner, Jeff Jones, of the small auto dealership, Texas Auto Truck. He says that he sales about 2-3 vehicles a day. The two days that we visited with him we saw several new vehicles and several that were missing from the previous day. He has his wall of sales also with many vehicles sold. He runs his shop with his dad and a part time mechanic. As I was using my empty cases of soda to measure the cargo space, he started asking questions. He mentioned that he wanted a small soda machine. He needed time to talk to his dad. I gave him about a week to talk everything over with his dad and think about the soda machine and then I called him. He wants the machine. I was able to locate a small machine from someone that I have purchased machines from before. I will be delivering the machine on July 13, 2009. This is one of those times when I just happened to be talking to someone that needed a machine. Always look for opportunities. You will find them in some of the most unexpected places.

I did a profit potential analysis of the location. Texas Auto Truck is located in Wylie, which is between 17-19 miles from our home depending on whether I drive the freeway or the back roads. I usually try to get a location a lot closer. Most of my locations are within 2 miles of our house. I decided that I would go ahead with this location because I will not have to go very often, probably once a month. I wanted to insert my Excel file, but I haven't figure out how to do that yet. If the soda machine vends 3 sodas a day, it should net $27 a month or $328 a year. When the price of gas is taken into account, that is reduced to $19 and $232 assuming gas goes back up to $4 a gallon. If the machine vends 4 sodas a day, I should be able to make $341 a year. At 5 vends a day, that goes up to $451 a year. If this location is much better that I expect and vends 10 sodas a day, I would have to increase the number of times a month that I would have to visit to twice a month, but the profit per year would be $902. This is a little oversimplified, but it gives you an idea of what can be done with soda vending.

If I had to borrow the money to place the machine and this was the only machine that I had, it would take 1-3 years to start making a profit, but after that it is pure cash flow. I do not borrow money to pay for my machines, so I should have cash flow once someone starts buying sodas.

I will try to find a way to post my Excel file so that the calculations make a little more sense. I will also try to explain some of the calculations a little better when I do that.