A Business Plan:

Vending
Machine

Submitted by: Ian Marve Val

Submitted to: Dionibelton Viloria
Executive summary
A vending machine is a machine that dispenses merchandise when a customer deposits

money, validated by a currency detector to be sufficient for the desired item. This technology

would be helpful for easy access and convenience.

Electronic machine used to disperse a product to a consumer after a certain amount of

money has been put into the machine. Vending machines are commonly used to disperse

beverages and snack items, but in recent years companies have introduced vending machines that

disperse other items, even including electronic items such as digital cameras or iPods.

The plan for this vending machine will be located inside the Northeastern College, Villasis,

Santiago City. By having vending machines that can sell different beverages, I can say that there

is possibility that I will be able to reduce space. What I mean is instead of creating new shop which

definitely requires lot of space; I can replace them by allocating the vending machines.

Additionally, my market-oriented mission is “providing flexible and reliable customer service to

meet consumer needs through progressive management of automated retail units.”

Business Description

Vending machines, is located inside the Northeastern College, Villasis, Santiago City. It

is a sole proprietorship kind of business. They are simple to set up and do not cost a lot of

money. The person who owns a sole proprietorship can easily draw all profits directly into their

own financial affairs without trouble. This makes this structure attractive, but there are negative

aspects as well. My business, which is the vending machine, will be unique because of the

following:

1) They are easy to manage. These machines are easy to manage as nobody has to be there to

sell any goods. All that needs to be done is the machine’s installation, and then you can simply

monitor it’s progress from a far. There won’t be any payment problems either, as an instant

cash/card payment is needed to buy items. 2) No overhead costs.

3) vending machines save time. No precious time will be wasted preparing a beverage, as a hot

drinks vending machine can dispense a drink in around 20 seconds, saving loads of time!

It will succeed because the vending machine will be put in a location wherein it is easily

to find and the products of the vending machine meets the needs and wants of my customers.

Vending machines as a business can be very profitable. The factors that’ll cause

my business to grow are, location, product offering, starting small, having realistic

expectations, and securing a prime location and lastly, building relationships that can really

help me to grow my business. The market feasibility shows that the demand for the product

is high and the business will be able to produce the needed supply. Through the proposed

marketing program, the projected sales are easy to achieve. The factors you need to consider

is the location where will you place your machine. Location is the most important factor
when it comes to vending machine. You should ideally place your vending machines were

people can usually see it and visible to them. Good places to have vending machines include

malls, busy street corners, movie theaters, inside or outside pubs and discos, inside the school

premises or outside it. You need to consider the target customers, know the taxes and beware

of false claims. You also need to consider the products price if its affordable by the buyers

in the said location.

Description of products and services

The nature of the business will be water, soda, milk, juice retail and snacks. This vending

machine is convenient, accessible and within your reach. The product that will be putting inside

the vanding machine will just distributed and we will buy products to other big stores to be put

inside the vending machine. Vending machine is highly recommended by the owner because of

its purpose that will benefit a lot of students here at Northeastern College so the company’s purpose

why this sending machine produce is to make a product that within the reach of every students

and, faculty and stuffs members. The company also wants to make the students life easier, instead

of going outside to buy food and beverage. Vending machine is waiting them and ready to serve

them. People tend to look for the most accessible place where they can avail themselves beverages

in the simplest way. Through this the proponents came up with ideas and resolutions on how to

cater this demand by setting up vending machine that will meet the need of consumers specifically

beverages and or refreshments. Since the demand is high on these products and the established

vending machine would be the first one in the campus and in Santiago as well, there is a greater

probability that the business will rise up

Target market

The target market of this vending machine is the students who are studying at

Northeastern College since the vending machine will be placed inside the campus, this

vending machine target the ages between 16 and above. And this vending machine is open

for all and anyone will be served of our vending machine. Since the target market of this

vending machine are the students it means that they are already technologically

knowledgeable about the vending machine. In addition, it uses the same technology as the

CP they use. This vending machine come up to our new technology and updated, it is a

machine to drop an exact value of coin automatically the product you want to buy will

automatically drop, and that is because of the technology used. The benefits of this that they

can adopt is it is accessible for all and you can buy what you want and it can save your time

because of its fast service to everyone.

Management team

Ian will be the service manager and installation coordinator. He quickly learned how to

fix our many types of vending equipment. Recognizing Ian’s tremendous interest in our business

and his obvious hard work, he is formally hired as a technician.

He now leads the service department where he is responsible for coordinating in our

management team. He is responsible managing his teams workload which includes: machine

installations, customer refreshment programs, completion of service calls, and general

troubleshooting that occurs with our machines.

Marve is the sales and customer development manager for my vending machine business,

bringing years of practical work experience to his job. Rob started working in sales for our

organization and has continued in the position for the past years. Marve’s core focus is to ensure

our customer’s are satisfied with the services our company provides.

Val is the most experienced vending technician in our team. He is directly responsible for

ensuring our machines are functioning optimally at all times. He has extensive experience with

electronics and is often called upon by members of our industry to assist in solving complex

problems with vending machines.

Risk management

Monetary risks: The fact is that vending sector needs low capital investment but this

small amount makes a big deal if you loose it due to careless reasons. Your money would be

falling between cracks if you invest in defective machines, traffic prone locations, unpopular

products or in any turnkey vending business that is running into loss.

Security risks: This is a cropping challenge in the vending sector. The threat of vandalizing

vending machines is faced by vendors across the globe. Proper security measure must be

incorporated in machines to save machines from thefts, damages or stealing of products. The

security risks need to be ruled out at the earliest to make sure your invested money is intact and

unhurt.

Legal risks: While starting any business you must consider the legalities of it. Take help of legal

advisors to check insurance papers, lease documents and license. The documents must meet up

all the requirements with utmost precision to avoid any legal traps in the future. An eye on

specifications of these documents would help in smooth running of the vending machine

business as well.

Commitment risks: This factor is based on the nature of the vendor. You have to make sure that

you give little but quality time to your part time vending business. Refilling of products,

maintenance and cleaning of machines if not done at proper time would lead the business out of

the window. So, don't stray your business by being easy going about it. Be prudent and proactive

towards the business.

Competitive advantages

Starting a business like this have so many threats because of the competition inside

the campus and outside as well. Because its hard to please the loyalty of costumers to buy

in our business because there’s so many competitors or the threats to yur business and they

are the canteen of the school, kwek-kwekan beside the school, Valdez eatery, entrance-

exit, the school canteen and other sari sari store inside and outside of the campus. So the

owner wants this business because it is not time consuming and accesible for all and high

technology also.

Marketing strategies

A) Product/ service Strategy

The product strategy of this vending machine is to come up with something to the customers

that can attract and force them to buy. Our product strategy is something creative, we will change

our products packaging or design or a little bit of an art and change the theme of vending

machine every occasion or season. The service strategy of this vending machine is the fast

maintenance and quick drop of the products.

 1.) Brand Positioning

Our vending machine will locate inside the school campus innovative product is still

relevant for use. Business vending machine will simply place where it can be viewed easily by

school staff for the students to be more responsible with their behavior around the machines. We

observed that most of the students at the Northeastern College is very busy to spent much of time

just to buy foods. It is very relevant for use because the content of the Vending Machine is low

cost because as of today almost all of them are spending their money for their wants and needs and

others don’t have a lot of money and because of it, students are under privileged and by Vending

Machine students who’s hurry and hungry has access to buy the same snacks in the machine that

has affordable priced. And also, we would be going to put healthy snacks wherein we will be

having a meeting with the school admin and associated with them. Some if the student forget their

meals, its very time consuming if they would going to take a lunch at home right so our innovative

product is very relevant to use. Our product is also great for fundraising. A vending machine at the

school can be used to fundraise, either for the school itself, for student activities, for supplementing

hot lunch programs, or even for an external cause, such as charity. And it’s not just that vending

machine has a big and great role to the students because it was really the quick and easiest way to

buy their own meals and snacks and they don’t have to wait and they don’t have to go outside the

campus to bug foods and it leads to the safety ness of the students.

B.) Pricing Strategy

In our strategy, our pricing is quite affordable to everyone in normal days and in special

occasions it will be much more affordable because of the 5% discounts in every occasions like

Valentine’s day and Christmas day till new year that way we can invite more customer to buy our

product because of the 5% discount and different occasions is our basis to come up with our prices
which is more affordable and assure everyone that they will buy our products and we will adjust

the pricing of our products by the help of maintenance to operate our machine. And the cost of

every products that vending machine has we add our mark up to the real value and minus the 5%

in every special occsion. This strategy will make our business have high ratings and have more

good feedbacks upon our customers.

C.) Distribution Strategy

Our vending machine will pursue distribution agreements in different distributors regional

or national. Until these agreements are in place, we will sell directly to the operator. We are also

pursuing relationships with nationally-branded companies to supply them with machines for their

products. Our vending machine is dependent machine that doesn’t need a distributor to serve our

customer and it will sustain the needs of the students such as snacks and drinks. Se we tend to say

that there is no particular distribution of products that is happening in this business, all we need is

yourself buy a drink and food for yourself.

D.) Advertising and Promotional Strategies

Vending machine is a business where you usually have to go out and get customer.

You can also expect some customer to come to you if you advertise effectively. Marketing

vending on the internet can be done by small businesses that open up the doors to thousands

maybe millions of customers. Vending machine sales is one of the top sales producers in

the market today. it would make sense for a company who sells vending machines or for

those who are looking for the use to try some of the new internet marketing tools and set a

up cyber office where they can write about the company, allow people to contact them

either through –mail or by phone, list their products and put pictures of their products with
prices on the website. Advertising vending machine by creating a website about the product

is established on the internet, there are hundreds of vending machine marketing tools and

techniques available for business to use so that they can get the world out about what they

are selling and what they are looking for. Posting pictures in social media that will catch

the people’s attention. Posting tarpaulins inside and outside of the building especially in a

crowded area so that it would be visible and everyone can see. Lastly, having a promotional

video that can be a commercial because using televisions can be one of the ways on

advertising the product and we all know people usually have their televisions in their house,

and it can be viewed worldwide.

Financial projection

Estimated cash flow for the first year

Start up Month 1 Month 2 Month 3 Month 4 Month 5 Month 6

month

Starting cash
100,000 20,000 52,000 84,000 116,000 148,000 180,000
balance

Add: positive
0 80000 80000 80000 80000 80000 80000
cash flow

Less: negative
80000 50000 50000 50000 50000 50000 50000
cash flow

Add:
0 2000 2000 2000 2000 2000 2000
depreciation

Ending cash
20,000 52,000 84,000 116,000 148,000 180,000 212,000
balance

Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Starting cash
212,000 244,000 276,000 308,000 340,000 372,000
balance

Add: positive
80,000 80,000 80,000 80,000 80,000 80,000
cash flow

Less: negative
80,000 50,000 50,000 50,000 50,000 50,000
cash flow

Add:
0 2,000 2,000 2,000 2,000 2,000
depreciation

Ending cash
244,000 276,000 308,000 340,000 372,000 404,000
balance