4 Things To Consider When Selling Your Vending Business

July 27, 2015

There are a multitude of reasons operators ponder before opting to sell their vending company. Perhaps an operator has seen declining margins for too long. Or maybe retirement is in the operator’s future and he or she has no one to take over the business. Marc Rosset, CEO of Professional Vending Consultants, says that whatever the reason, it is important for every operator to have a plan of action in case the day comes when a decision needs to be made on whether or not to sell. “The vending industry and atmosphere is not the same as it was ten, or even five years ago,” said Rosset. “It is a different industry in many ways, and that includes buying and selling.” According to Rosset, there are four things every operator should consider when thinking about selling.

One: The region your company serves

Region is a very important aspect of selling a vending business and unfortunately it’s not something operators can control. “Within the last few years there has been so much consolidation in the industry that there are only a handful of vending operations in each state that are looking to buy,” said Rosset. “Because of this, it might be a little harder to sell.” Rosset notes that the Idaho market is naturally very different from the Chicago market and values will not be the same. Evaluating an operation’s particular region can give the company's owner a better idea of potential buyers and whether or not to invest in areas to make the company more appealing to buyers.

Two: Technology investment history

When it comes to investing to make a vending company look more desirable, many operators look towards technology. Rosset says this is a good idea for some, but not all. “Sometimes it is not appropriate to invest in technology,” he said. “I have operators call me to ask my opinion on whether and it’s too late for them to invest in networked equipment and other newer technologies. If they don't have the money readily available, they don't have 5 years to let this play out and/or most if not all of their machines need to be upgraded to accept these improvements, it probably doesn't make sense for them."

There is another warning for operators, says Rosset. "In light of the fact that your most likely buyer would have already upgraded to cashless, networked equipment and warehouse controls, if you haven’t done the same, when you go to sell, these buyers won't be interested in paying you a fair market price if they have to spend all the extra funds on immediately upgrading. Five years ago your equipment may have been sufficient for a good sale where today it may not be. And spending that money now, just in order to sell is a losing proposition."

Three: Life outside of the industry

“I always ask operators, “What would you be doing tomorrow if you sold your company today?” Sometimes I have operators who don’t have an answer to that question,” said Rosset. “Most are serious about selling their business and have plans to retire, have another business or just want to do something else. But others don’t have a plan.” Rosset recommends that operators think about life outside of vending. “For many, the vending company has been their life. It’s an emotional process and once it’s sold, you don’t get it back. It’s life changing, so really be sure that you’re ready to let go,” he concluded.

Four: Obtain professional help

It’s up to the operator on whether or not they want to employ help in the process of selling. Reaching out to a friend or colleague who has previously sold their business will give you a sense of what is to come. Obtaining professional help, such as that of an acquisitions consultant, may also ease the process. Consultants oftentimes represent both the buyer and seller in the process and determine a solution and price that works best for both parties.

The decision to acquire or divest is not an easy one, but with the proper tools, operators will be on their way to determining the best solution for their business.

Marc Rosset is founder and president of Professional Vending Consultants, Inc. from Chicago, IL. He can be reached at 312-654-8910 or e-mailed at [email protected].