June 13, 2022

Buying an Ice Vending Machine: The Ice Vending Machine Business Plan

Unconventional Acquisitions•

June 13, 2022

Do you like the sound of cold, hard cash? Are you looking for a passive income opportunity? If so, consider buying an ice vending machine business.

Ice vending machines are low maintenance and relatively inexpensive. If you’re smart about it, you could make a lot of money selling cubes of frozen water.

Keep reading to learn more about how to find an ice vending machine for sale and how to make an ice vending machine business plan. Don’t worry. We’ll keep it cool (not even sorry for that one).

How to Find Ice Vending Machine Businesses for Sale

Why start an ice vending machine business from scratch when you can buy one? Buying an ice vending machine business means someone else has done much leg work for you. You’ll likely inherit their customer base and locations.

If ice machines are already up-and-running, you just have to worry about maintenance, not new purchase costs. Ok, so buying is better than building. How do you find the one?

Here are a few ideas:

The Internet is nICE

Online marketplaces can help you find your match made in frozen heaven. Just be sure the site and business are legit. Communities like BizBuySell, EmpireFlippers, Flippa, and IndiMaker are just a few online marketplaces we like.

Check out our entire categorized business community list here.

Want a FranchICE?

You may decide to buy a franchise. These can be easier to find because of the franchise’s national or international presence. Franchises usually come with training and marketing support as well.

If the chain is successful, chances are pretty good people already recognize the brand logo. Franchisors sometimes regulate location or other business practices. Ultimately, the sales and operating terms can help determine if you’re hot or cold on the franchise deal.

Own Your Ice

Non-franchised businesses may give you more flexibility with the sale and operating terms. Not sure if an ice vending machine business is for sale? Look up the owners of existing machines you see around town.

If one isn’t selling, they might know someone who is. For example, maybe the ice machines aren’t for sale, but another vending business is?

Maybe the call won’t lead anywhere, but it’s excellent practice, and you probably learned something you didn’t know. Either way, this is one business where cold calling should absolutely be in your vocabulary.

Buying an Ice Vending Machine Business

Think you’ve found that (seemingly) perfect ice vending machine business? Now it’s time to do some homework.

First, ask the existing owner why they are selling. If they’re retiring, relocating, or selling to fund their next business venture, proceed. However, if their revenue stream has gone cold or business is headed to the south pole, slide your way out of that meeting and don’t come back.

A nICE and Accurate Valuation

How much is the business worth? What’s the current valuation?

Since business valuations are sometimes complicated, find someone who knows what they’re doing to help you. Ideally, find an accountant or broker who won’t have an ice cube in the Scotch. Your third-party evaluator should have nothing to gain or lose by you buying (or passing on) this vending machine business.

If the ice vending machine business owner asks more than the valuation, your sale could turn cold quickly.

Due DilligInCE

Due diligence is a must. Read that again. You should not buy a business without digging deep into its finances, history, credibility, and reputation. Hire a business attorney to help you with this step.

Ask the seller/owner for financial statements, past tax returns, leases, and vendor agreements. Next, make sure there aren’t any liens against the business.

Do they owe other people money/services? If so, how much and when should the debt be gone?

If a business owner isn’t honest about everything, it should come to light during your due diligence research. Maybe you’re dealing with a legitimate business owner who doesn’t know the ins and outs of their own business. Trust but verify with due diligence.

Financing an Ice Vending Machine Business

If everything checks out, you’re ready to figure out how to buy the business. Here are a few options.

Cash

Use that to your advantage if you’re fortunate enough to have a wad of cash freezing a hole in your pocket. Likewise, owners who want a quick sale will appreciate cash in their hands.

You may also be able to negotiate a lower offer price by promising to pay in full and pay in cash.

Traditional Financing

Banks and credit unions have money to lend, right? Most of the time, yes.

You’ll probably have to qualify for a small business loan first. Next, your lender will likely require a business plan (more on that later). Be prepared to wait a cold minute for your money as well.

Depending on the amount, expect to wait at least four to six weeks to seal the deal.

Private Lenders and Buyer Financing

Private lenders may be more flexible with their business terms. For example, you might be able to set the interest rate or fee schedule with them. Some people even buy businesses with no money down.

Often buyers negotiate a no-money-down purchase with the business owner. However, that doesn’t mean other investors can’t be involved. You may be surprised to find out how many people buy businesses with little or no money down.

Making an Ice Vending Machine Business Plan

Ok, let’s say you’ll buy Cold As Ice by Queen Vending Services. You’ve scoped out the business, hired a lawyer, and found them to be in good standing. The business is valued at $200,000, and you’ve agreed to pay that same amount to buy it.

You struck a financing deal with a private lender, but they’re asking for your business plan before signing off on the deal. A vending machine business plan is also a good way for you to organize your research on this potential purchase.

Start by listing your company’s name: Cold As Ice Vending Machines. Then, here’s what to include next in your ice vending machine business plan.

Market Outlook

The market outlook is strong. The current owner, Queen Vending, reports a daily average of 50 sales. This number increases in the summer from June to August and dips slightly in the winter.

The financials show a pretty steady stream and track with market norms. You feel good about their history and current vending machine locations. The local economy seems to follow national trends as well. All-in-all, pretty boring (read: perfect) stats.

Sales Goals and Projections

Keeping up with our example here, your sales goals might be to grow by one to two vending machines per year. Since machines can cost up to $100,000 or more, you’ll likely want to focus on cash flow first and growth second.

Your first goal could be maintaining services until you’ve recouped your input costs. With these numbers, that should take 12 – 18 months.

After that, sales goals could include additional services, like beverage or snack vending machines added to each location. Pick the highest performing machine spots first.

Growing Your Ice Vending Business

Show the lenders your growth plan. Lay out the business plan for adding water vending machines to your best locations. Having ice and water vending where you once only had ice vending will likely increase your traffic. Adding additional vending locations for bagging ice will increase total revenue and profit.

Create a safe, well-lit location for 24 hour ice water and bagged ice. Having the option for 24 hour locations will increase hours of operation with no physical operator required.

Material Costs and ROI

Since materials are often market-dependent, this could change throughout your ownership. However, you can grasp current material costs well by using existing vendors. You can also check out this handy ROI calculator for a quick look at input costs and ROI.

Keep in mind machines need maintenance. You should also look into vendor contracts to see if/when any expire soon. If you can lock in rental rates with location vendors, it will make your projections much easier.

Cash Flow

Here’s the bottom line, right? How much are you going to make? Under typical market conditions, you can net $38,000 on an Everest ice vending machine. Take out the service fees and routine cleaning schedules.

If you hire these services out, it will cost you more money. But, on the other hand, if you clean and maintain yourself (learn how first), it will cost you your time. So which is more valuable to you?

Run an Ice Vending Machine Business Successfully

You’re ready to buy after running the numbers, hiring the pros, and due-ing the diligence. If things run according to your ice vending machine business plan, you could potentially net $90,000 annually on three machines.

Like any other business, location, condition, and market demand matter. But you’ve already researched all that, right?

Ice vending machines are relatively low maintenance and don’t cost much to buy. Once you’ve got a cleaning and maintenance schedule, you’re on your way to cold, cubed, passive income.

Ready to learn more about making the best ice vending machine business buy? Our Business Buying Course will walk you through what you need to buy a business successfully. Register Now and learn how to chill while watching the cash flow.

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