Don't skip using technology: How to build convenience services business you can sell

New operators entering the convenience services industry today generally begin by using some form of technology, especially if they start with smart markets or micro markets. But, some older generation operators have missed the opportunity and are so far behind that they generally just run it old school. There is no doubt: Using technology is important, especially when it comes to selling the business.

As a business broker in the office refreshment industry, one of the most difficult tasks is getting the proper financial information and due diligence from the seller when it comes time to sell the business and present the information to a potential buyer. Here’s where technology is essential. I have had several operators contact me to discuss a possible exit, only to learn they do not use a vending management system (VMS) to run their business.

I am not here to sell you or push you into using a particular VMS or technology. I will say there are many advantages to using technology in your day-to-day business operations.

I’ll also say that not using technology will net you less for your company when it comes time to sell the business — especially if the buyer must go through your machines and update and install credit card readers. You are not saving any money by not utilizing a VMS and technology: You are actually costing yourself more money in the end.

Providing financial reports and tax returns is never enough for a qualified buyer to make an offer on your business. They need as many details as possible. Not having a VMS is like running a business with a blindfold on.

I have sold several companies without a VMS, and getting the due diligence is a paramount challenge. A VMS can quickly give me a snapshot report — within minutes — of items such as:

• Sales by customer
• Equipment listing by customer
• Micro market sales
• Machine pricing in vending and markets
• Customer commissions

Doing these things manually will not only cost you time and money, but it is just not as efficient as an integrated system that manages all of this for you.

I have dealt with many “old-school” operators who have passed on adding technology. Extracting data needed to present to a buyer is painful. It shows the buyer that your business has not been run efficiently, thereby netting you a smaller offer for your business.

Many operators who do not use a VMS have no idea what vending machine prices are without having a route driver write them down. Some even must go out and write down the serial number, make and model of each vending machine. Keeping track of this manually is rarely successful.

For instance, “sales by product” is widely asked-for data during a business sale. A VMS can produce this report in seconds. A list of the 20 most sold items is another report that is generally requested. In a matter of minutes, using technology properly, an operator can extract what a buyer needs, versus months of manual data entry and traveling around to gather data.

Here are 10 technology investments that will immediately make your business run better, operate more profitably, and create value when it comes time to sell the business.

1. Install a VMS. Enough said.
   
   
2. Add office coffee and pantry software to run the routes and operations. It is also beneficial to have this software integrated into financial software such as QuickBooks.
   
   
3. Add online ordering software for office coffee and pantry services. This allows your customers to place orders online. Today’s world has adapted to everything online.
   
   
4. Create an online presence. Having a professional website is virtually a given. Social media is generally free of cost and very effective. Use them.
   
   
5. Invest in refund technology to allow consumers to get an instant refund.
   
   
6. Add service-call technology. Often, this capability is integrated into a VMS software. There are also standalone programs to track your service calls and notify customers when repairs are complete.
   
   
7. Invest in prekitting software. The majority of large operators — the ones you want to sell your business to for top dollar — are already pre-kitted. If your business is already pre-kitted, this makes the transition far better for the buyer and your end customers, who are already used to the way the machines are refilled. Put away the static schedule done manually Pre-kitting adds value.
   
   
8. Upgrade to an automated warehouse-picking system for pre-kitting. Using an automated warehouse picking system will also strengthen your business and show the buyer that you have invested well in it, especially if they resume your warehouse operations. A warehouse-picking automation system can help you pick correct orders, save enough labor to pay for itself, organize and automate your warehouse, and add a better bottom-line profit.
   
   
9. Credit card readers. If you are not using credit card readers, you are missing out now, by not being able to accept credit payments. Cashless transactions account for roughly 71% of all vending machine sales.
   
   More importantly, as it relates to selling your business, having technology in place saves the buyer from having to spend the time, money and resources to upgrade your machines. (That anticipated cost will definitely be reflected in any purchase offers you get.) Credit card readers not only increase your sales but also are transferable to the buyer when you sell the business.
   
   
10. Invest in micro market technology. Micro markets offer greater value to buyers and generally yield more than vending account sales. Smart markets also are emerging at a rapid pace and will fit into the micro market arena.

There are several good technology options available. Technology is an investment in your business that can maximize your operations as well as help you get the best offer from a potential buyer.