Rebecca Nichols
Milwaukee, WI (USA)
Role(s):
Founder/Owner/Principal
RSN Vending
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Startup
Location:
Milwaukee
Industry:
Food Service/Restaurant
Year Founded:
2012
Number Employees:
1-10 people
Business Stage:
Creation/Idea
Entity Type:
Not Incorporated
Description:
I would like to start a vending business with the 5-hr energy product and have based my three year projections on starting with 5 machines and ending with 25 machines. The cost per machine is $2650 and the locator and set-up costs will be $300 per location. I need $25,000 to purchase the 5 machines, the initial start-up costs, and for due diligence (travel to NC to see machines and check out the numbers from actual routes) along with locator, set-up, company-owned vehicle down-payment; as well as a small amount of working capital. My projections are based on obtaining this money for no more than a 9% interest rate, amortized over a 7 year period with a 3 year balloon.
Each machine holds 120 bottles (shot size) and will sell for $3 per bottle (less than what you can buy them individually retail) with the cost of the product projected to one-half of that price. I can easily service the machines myself initially and have provided a small salary that is supported solely by the business and will not be a part of the working capital. This salary will remain the same throughout the 3 year process or until the loan is repaid.
The locations are secured by proof that the product produces a 12% increase in employee productivity as opposed to the normal percentage of sales that some vending locations owners prefer. Locations that will be sought are manufactoring or offices that employ 50 to 200 people preferably working two-three shifts. Studies have shown that the 5-hr energy shot does work miraculously in providing a tremendous energy boost to the consumer, therefore making employees more alert and productive.
After the initial machines are paid for in cash, additional machines can be purchased from the distributor at a 30/70 loan. He provides financing at 70 percent of the purchase price and amortizes the amount over a 3-year period with 0 percent interest. My projections show that the business will support the 30 percent needed for downpayment for the additional machines to be purchased (at 5 machines each) throughout the 3 year projection period. The projections will also show that that the additional monthly payment for the loans can be easily handled by the business income as well.