Hello

I started 4 routes and I placed 10 accounts on each new route. The first route was started in Burlington Iowa the 2nd Ft Madison the 3rd Keokuk and the forth in Muscatine Iowa. If you look these towns up on a map they all set on the Mississippi river. Each one of these towns I'm planning on having 1 route in them.

I section a town off and work each open business. If my plan works I will have 60 accounts in each one of these towns. If your wondering why 10 accounts on 4 different routes its because it is cheaper to build your routes evenly rather than one at a time (less boxes setting in the warehouse waiting my next trip out).

A week and a day ago I turned in my resignation as the Iowa area manager for one of the larger vending companies in America. Three years before that I sold my full line vending company to my employer. 14 years of listening to customers complain and threaten to throw me out if I didn't do what they wanted was enough.

Before going into the full line vending business I was a snack box operator for 10 years. I'm back in the snack box business and enjoying setting up new accounts. My goal at this time is to have 4 routes with 60 accounts on each route.

I will run a route one day then the next day I will count the money and fill the boxes for the next days route. This will have me coming back to each account every 8 working days which allows them to eat enough product to make it worth my while. I'm charging $1.25 per item which makes me the highest price snack box operator in Eastern Iowa.

I started two of the routes this week with 10 boxes placed on each. Next week I will start 2 more routes with 10 boxes on each route. Friday I will start bringing the first boxes back with money in them. When I hit 240 accounts in a few weeks then it will be time to decide if I want to keep growing or not.

Some people think I'm crazy leaving my job with the vending company.  I've always told my wife at my funeral I want the song played I Did It My way by Frank Sinatra.

Finding Happiness In Your Work

I went into the snack box business in 1988 and was in it until 1998. Those were the happiest days of my life. And that is why I enjoy writing about it.

I’m sure many of you hear the alarm go off in the morning and just want to roll over and go back to sleep. When a person is in the snack box business they look forward to each day.

On an average day you should be servicing between 60 and 80 accounts. You can’t help but make a few friends along the way. You will find people that have the same interest as you and bingo there is an account that you look forward to seeing each time around.

You will meet some of the nicest people that run small businesses just like you. Being able to visit with others that are as proud of their business as you are of your is one of the joys of owning a snack box route.

The financial rewards of running a snack box route are what many people think about when they are contemplating going into the business. I would like to encourage you to think about the happiness reward.

Life is short and many people don’t think about the happiness reward. I have heard it said many times in my life do something you enjoy and you will never work another day in your life. That is what I hear from the people that have been in the business for a number of years.

Vic and His Wife

Vic from the southeast portion of the United States told me one day him and his wife are retired but still have a small snack box route. He said I have had these customers for years and if bad weather comes they know I may be a day behind and that is OK with them.

That is because they are his friends not just his customers. I would venture to say that if you were to talk with Vic’s accounts they would say we like the snacks Vic and his wife supply us. But they are old friends of ours and life just wouldn’t be the same without them.

If you are looking for something that is more than a job I would like to invite you to take the plunge and build a snack box route for you and your family.

The One On One

When I speak of the one on one I’m talking about talking with my employees. This is a great way to find out about problems they are having.

It is also a good way to make them feel like they are a part of a team. The one on one can solve many problems that a company may be having and should be used to get problems solved that concern employees.

 

How Often Should One On Ones Be Used

I personally think one on ones should be used every other week. Communicating with your employees gives them a feeling of value.

If a company is having problems then an owner may want to do them every week. There is no better way to solve company’s problems than to have the entire team pulling in the same direction to solve the problem.

When To Do One On Ones

I like to do one on ones after the employees get back to the warehouse on Thursday afternoon. The week is still fresh on their mind but you don’t want to wait till Friday because most employees are looking forward to starting their weekend.

Who Talks

This should be a give and take session with both of you talking. If the employee is the quiet type it may take some well-planned questions to get them involved in a conversation with you.

Discussing profits is always a good place to start. My company uses Rutherford and I get a copy on each routes performance every week. In the not so distant past my company was having problems with too many stale products.

I started talking about this problem with each employee and the stales have taken a very positive move for us. Remember to give the employee a chance to talk and you will probably hear, like in the stale case, where they are having problems. You then have the opportunity to help them solve the problem or at the very least you will know why things are the way they are.

Summary

The one on one is a very useful tool that every owner should employ. It has so many positive benefits. It opens up an employee. It helps the owner understand what the employee is up against and it builds a team atmosphere.

I know in many cases it has helped me to solve minor problems before they become a major problem. I would encourage all owners that are not using some sort of one on one to implement a program as soon as possible.

It is the simplest way I know to get employees active in helping you solve the everyday problems of your company.

Company Kitchen

Our first Company Kitchen (honor based no vending machines) in Iowa has been up and running for two weeks. We have four cameras installed so we can watch what is going on at any time we want from an office computer to a laptop in a McDonalds on their Wi-Fi.

We can also go to another site that will tell us the sales at any of our Company Kitchen locations. The system uploads new data every two hours. Sales are up at the new location by about 30 percent. The thing that fascinates me is the cold food sales.

Cold Food Sales

We are getting 25% to 50% more sales out of our cold food items and selling ten times more cold food at this location. The difference seems to be that they can open the cooler door and physically touch the item before they actually buy it.

We are selling more of the higher end items now that the Company Kitchen has been installed also.

Constraints Of A Vending Machine

As most of you already know vending machines will not sell anything larger than an LSS bag of chips. With the Company Kitchen the chips are displayed on a rack like you would find in a grocery store or a convenience store so the bag size limitation problem has been removed from the equation.

If a company wanted to sell paper or pens that is also an option now.

Paying For Merchandise

Company Kitchen has eliminated the need for cash. There are several different ways to pay at the kiosk.

1-The customer can pay with a credit card.

2-The customer can pay with a debit card.

3-The customer can pay through their Company Kitchen account that can be set up in a matter of two minutes.

Company Kitchen Account

When a customer sets up a Company Kitchen account they get their own web page. This web page opens the door for them to access all of the customer benefits that Company Kitchen provides them.

One of the benefits is that at the end of a day they can open their web page and see exactly how much money they spent at the kiosk. They can also see the nutritional value of each item they consumed that day. They can put money into their account from a credit card or a debit card.

The customer can also put money in their account at the kiosk by letting the machine know who they are which activates the bill acceptor. They can put a one, five, ten or twenty in the bill acceptor and it is put directly into their account.

Company Kitchen has eliminated paying for an item with cash and the advantage in my opinion is that people don’t think about how much they are spending. That results in sales going up.

When they sign up for the Company Kitchen account they are given a small card that when scanned takes the money from their account. The thing that most of the customers enjoy is that by having an account they can use their thumb print to pay for an item and it comes from their account funds.

How convenient, the customer comes down for a glass of water and as they walk by the coolers and the shelving they impulsively pick up a Coke, walk to the kiosk, scan the bottle of Coke, and put their thumb against the thumb print eye. You just made a sale and all they needed to buy that Coke was their thumb print.

Theft

About 1% is the norm. You don’t pay the account a commission and your cold food is being sold at a premium price. Here is something else to consider.

If you are getting $1.35 out of a 20oz bottle of soda through a vending machine and there is a deposit of 5 cents on the bottle like there is in Iowa you are actually getting $1.30. Now add sales tax and in Iowa that is 7% so now subtract another 9 cents so you are actually taking $1.21 to the bank.

With the Company Kitchen you can program it to add the sales tax and the bottle deposit. Now you are taking a $1.35 to the bank instead of $1.21 and my friend that extra .14 cents is profit in your pocket.

Summary

The honor system is coming to vending and I don’t think there is any way we can stop it. The vendor has finally figured out what the honor snack box operator has known for years.

Vending How Will It Look In Five Years

Changes in the vending industry have always seemed to move slowly. There is a new form of vending that seems to be taking hold and it is making me wonder what the vending industry will look like in another five years.

The new form of vending I’m talking about is the self serve break room. Most of us have seen the self-checkout lanes that are at many Wal-Mart stores today.

Now picture a break room where there are no traditional vending machines just a cooler for the cold food, milk and items that need to be refrigerated. Then a rack that holds the candy, chips, and pastries that would come inside a snack machine.

Most locations would have a cooler for soda, energy drinks and items you would find in a glass front soda vending machine. If the location justifies it you may have a freezer to sell frozen food.

Your customer walks along the displays and takes what ever they want and then steps up to a kiosk where they can pay with cash or a credit card. Many companies will pass out their own debit cards that you are able to replenish the money on the card.

Each employee will have their own web site to go to and at the end of a day, week, or month they can look to see exactly what they have purchased at the companies break room. It will tell them how many calories, saturated fats, and most anything that shows up on the ingredients label.

Pricing Items

Pricing of items is a major bonus with this system. Many companies are able to price their cold food at 30 to 50 percent more than they would be able to get out of it through a vending machine.

Another advantage is if you are charging $1.35 for a 20 oz bottle of soda that comes out of your vending machine that is the total amount you will receive for that item.

Now with the self serve you may price that 20 oz bottle of soda at $1.39 and then when they get to the kiosk to pay for the item the kiosk will add sales tax and the bottle deposit to the total amount that your customers pay.

Many people don’t mind paying more for a meal that they can pickup and look at before making the actual purchase. Figures are saying that sales are going up from 20% to 50% at a location after the kiosk and coolers are installed.

Theft

Theft is minimal if you watch the type of account that you are setting up with this type of a program. When you factor in being able to get more out of the same products that you sell through your vending machine this becomes a viable new tool for the vendor.

I will be writing more on this subject in the near future. I would like to hear from you on your thoughts of this type of a system.

Figuring Sales Tax (Are You Paying To Much)

When you sell an item such as snacks and sodas through a vending machine or a snack box the local sales tax has to be figured out of the money you bring in.

If you’re not careful you can be paying taxes on top of taxes. My CPA once gave me this formula to help me from paying a tax on top of a tax when I figured my sales tax.

Lets assume your weekly sales are $5000.00 and your state sales tax is 5%. You are going to take your sales times 5 (Sales Tax rate) that equals 25,000. Then you are going to take 25,000 and divide it by 105 (Sales tax rate + 100) and that equals $238.10.

Now take $5000.00 minus $238.10 that equals $4761.90 and that is your actual sales. If you took $5000.00 times 5% you would be paying $250.00 in sales tax.

Total Sales $5000.00

5000.00 x 5 (Sales Tax Rate) = 25000.00

25,000.00 / 105 (Sales Tax Rate + 100) = 238.09523 round to 238.10 (Actual tax)

$5000.00 – $238.10 = $4761.90 (Actual sales)

I hope that these two examples are clear. It is never easy to discuss numbers in an article such as we have tried to do here.

Summary

Paying taxes is something we must all do and should feel like we have done something that helps our country to continue to be a great country to live in.

On the other side of the equation, over paying taxes has never been something that I have felt compelled to do.

The equation I have given above makes it possible to be fair to yourself and to the state you live in. Use the equation above and feel good about yourself.

With the extra money in your pocket at the end of each month take your’ loving spouse out for a meal.