California Offers Great Opportunities To Small Business OwnersCalifornia is huge market waiting for new companies to satisfy the needs of its residents. With a population of 36 million in the State of California, and more than 11 million people in its 15 largest cities, California certainly offers real hope to those who desire to sell products and services in California.
Growing Markets Offer Huge Potential To The Vending Industry
As they say in real estate and business, the three most important factors leading to success are Location, Location and Location.
In the vending industry, one of the most important factors leading to financial success is the location where vending machines are placed. In many locations, the current service provider will maintain their position as the location provider for the long-term.
This is why growth-economies are the ideal environment for people engaged in the vending industry. As new apartment complexes go up, an opportunity exists to get the contract with those apartment complexes to provide vending services. As new shopping centers and laundry mats are built, a huge opportunity exists to provide products in those markets as well.
There Are Few Barriers Into The Marketplace
Often vendors tend to provide their own barriers to growth. They look to the locations where it would be ideal to place their vending machines, and see that their competitors have the markets sewn up.
But, there are actually two ways for the startup vendor to enter into the vending market.
First, if a vendor puts themselves in on the ground floor as new locations become available, then the vendor will be able to introduce equipment serving products in a number of product lines.
Second, if a vendor finds themselves competing against well-entrenched vendors, then the new vending machine entrepreneur can squeeze into the market by providing products in existing locations that the other vendors are not offering. For example, if a current location offers soft drinks and snacks, it may be possible to also offer sandwiches, coffee and energy foods in those locations as well. If the other guy isn't offering those types of products, then you will find a means to leverage your machines into that location.
About Vending Routes
According to polling by Vending Times, the average vending business serves 4.9 product lines and has an average of 3.9 routes.
When you stop to realize that the average vending route can be completed in only a few hours, the average 3.9 routes seems to indicate that the average vendor builds his or her business to the point where he or she will work no more than 40 hours per week.
Depending on the vending machines and locations, refilling the machines could be a weekly affair or a daily affair. It really varies from location-to-location and machine-to-machine.
Some vending companies restrict themselves to a geographical location; while others limit themselves to company break rooms or apartment complexes.
Depending on the location, a vendor may be able to pull the truck directly to the machines, or perhaps a dolly will be required to move the products through security to the inner-sanctum of a business.
Seeing Productivity Improvements Through Technology
In a report produced in Vending Times, 2007 was a year for expanding vending machine technologies. 60% of all vendors upgraded their currency handling equipment and 5% of vendors added remote monitoring to their machines.
Imagine the potential that remote monitoring could add to your vending business. You will know when you don't need to restock as well as knowing precisely when you do need to restock to keep the money flowing into your business.
Other benefits will surely be realized by remote monitoring systems, as the vending route manager will have more real-time data available to them to better manage the growth of their business.
Only 2% of vendors added the new cashless systems to their machines, but that is probably due more to the added security costs connected with this kind of equipment. Cashless vending machines certainly offer great potential for tomorrow, although acceptance of this equipment industry-wide is still small.
The greatest benefit of cashless vending machines is the ability to put machines into high crime areas, without concern of providing a cash drawer for thieves to break into.
Regions Of Fast Growth
The economy of California produced 1.812 Trillion dollars in 2007. By itself, California is responsible for 13% of the gross domestic product (GDP) of the United States.
If you did not realize it, California's economy is bigger than the economies of most countries. In fact, in 2006 only eight countries had a larger GDP than California.
For the future, California's economy continues to look bright. Its exports a considerable portion of its local production: $134 Billion in 2007; $127 billion in 2006; and $117 billion in 2005. With exports growing at such a pace, it is sure that California will continue to provide enormous wealth and opportunity for growth to its residents and local businesses.
Since the spring of 2005, the CA economy has maintained a 4.3% growth in its economy from year-to-year.
Vending Is A Smart Move
According to the Small Business Administration, 65% of new business startups will fail. But amazingly, only 5% of vending businesses fail. This is the best reason to get started in a vending business of your own.
Traditionally, most vendors start their vending business as a part-time business to supplement their job income. Most of these new startup vending business people will make the transition from job to full self-employment within just two years.
Whether someone gets started in this industry with 30, 60 or 100 machines, it is an industry that is really inviting to new small business owners.