ROA Favorable for Operating Leases
The return on assets is higher with the operating lease than with the purchase of equipment. Although adjusted income is higher under the buy scenario, the asset base is also higher, making the ROA more favorable for operating leases.
There are soft costs that come into play in the analysis. At the end of the lease term, the Antares operator can return the equipment to the lessor if there will be no more need of the equipment. This option will reduce the cost for excess or idle equipment as well as reducing the warehouse space required for the Antares equipment not on location.
This means that the operation has increased its flexibility to determine what to do with the equipment at the end of the lease and also reduce its fixed cost.
Consider your capital flexibility
Preservation of capital is an added advantage to consider. Any company has a limited amount of capital. Operating leases will allow the Antares vending operation to keep its funds to improve flexibility, to meet seasonable needs, expand locations or pursue strategic initiatives.
A better allocation can be maintained on the operator’s balance sheet between fixed investment and variable/leased investment. This will allow the operator to retain additional capital for unforeseen opportunities. Operating leases will provide you with the flexibility to return the equipment if you do not have another contract site for the equipment at that time.
Reducing the risk of equipment obsolescence is another advantage to consider. With an operating lease, one can turn in the older model at the end of the lease for a newer version.
Consider flexibility in bidding
Strategically operating leases will enable the Antares operator to bid on large accounts or aggressively pursue new business to take market share. Here, the project can be funded via the cash flow generated from the location without a capital investment in new equipment. By the end of the contract, more flexible options will exist to dispose of or reallocate the assets.
Operators should always consider how the acquisition of new equipment will affect their return on assets.
Concern for Healthy Vending
America’s battles with the bulge is an unending challenge, and automatic merchandising which exists as a convenience, is not a format that easily keeps track of nutritional content.
The consumer is changing
The consumers today are more cognizant of nutrition than ever before. The vending industry for the past years has been helping people eat healthier. The mid-1990s saw a push for low and reduced fat products. One difference is that the media has recently focused a lot of attention on childhood obesity. Another concern is the health of an aging population. Medical research about dangers posed by obesity has shifted media scrutiny into high gear.
Vendors mixed on consumer response
But will all this health scrutiny encourage the vending consumer to act differently? More Antares vending operators are seeing more changes taking place than at any time in the past. Most Antares vending operators believe that today’s consumer has no choice but to pay more attention to nutrition as a diet, health and obesity have become staples of daily news reports. It has also been observed that the buying habits of consumers haven’t changed dramatically. Nevertheless, as consumers become more knowledgeable about nutrition, many operators believe that in time, their habits will change.
Healthier habits take hold
When one places health products in the vending machines, the consumers will definitely buy them. So far they have been buying these products. As an Antares vending operator, you can see higher sales of low-fat and low-carb items from your vending machines. There is a trend, and you as an operator have to ride it.
If meeting consumer demand were the only issue at stake, most operators would welcome the challenge. This however, is not the case. The news reports are affecting vending in different ways. This issue has affected the thinking of many account decision makers who are lo longer willing to leave product selection up to the vending operator.
Antares vending operators are aware that there is a growing market for organic, natural and nutritionally enhanced products. Surveys that have been conducted have revealed that a large percentage of vending operators would consider placing such products in vending machines, but most have concerns about price point, shelf life, customer acceptance, profit margin and product availability.
An Effective Locking System
Times have changed with regard to vending security issues. The security options that were available 10 years ago were primarily designed to prevent forced entry. With the use of technology, the capabilities that high security locks provide have changed.
Electronic locks in your Antares vending machines will provide the same level of security as their mechanical counterparts. In addition to this they will also have the ability to control and track access of every machine.
In an industry where trade loss continues to rise, internal suspicions are becoming more prevalent. This is due in part to the fact while external break-ins may decline with the use of higher security locks, trade loss is still evident.
Programmable lock keys
Many Antares operators may consider a jump from a mechanical lock to an electronic locking system as cumbersome. In the vending business, it doesn’t make sense to be constantly looking at audit reports. The system is less cumbersome for drivers and service technicians since they only carry one key. The locks are programmed to accept the key. The keys are programmed to function at specific times of the day and days of the week. They are also programmed with an expiration date, which means that they will not function until they are reprogrammed.
When theft occurs, what to do
When a theft occurs, an Antares operator can end up feeling helpless because there is nothing much the operator can do immediately. An electronic lock system will help preempt these situations.
The system will provide a more efficient way to supervise route activity. This is all thanks to its machine audit reports. If a route driver is unable to finish his route on time, you will now have an indication why.
You can use the electronic locking system on a daily basis for your Antares business by Natural Choice, to program keys and run audit reports whenever a shortage appears. This can be a quick way to find out why the shortages have occurred.
An effective electronic locking system will provide the ability to only audit every opening of the lock but also every attempted opening.
Vending Still Offers a Viable Business
Operating costs have increased significantly since the early days of vending, but financial realities still make Antares vending a good bet for the serious entrepreneur.
Vending may be the last truly viable business opportunity for someone with entrepreneurial skills to earn a good income. As much as the industry has consolidated and it has become more expensive for a business to play in the “big leagues,” there is still room for the small guys. This is something that will not change any time soon.
Most ventures begin part-time
Most people would start a vending operation to earn some extra money, most start on a part-time basis, and hope to build it into a full time job. Vending by Natural Choice USA is both an “easy-entry” business and a very forgiving business. An operator can start running it from the home and he can also decide how fast to grow the business. Because of these qualities, it is a very attractive as a small business.
If you are interested in starting a vending business, you can begin by purchasing new or slightly used Antares glass front snack and cold drink vending machines at a very affordable rate. If you have enough equity in your home, you can finance the purchase of the equipment. You can use your garage to store products and your car to transport the products. Once you have you business going, you should solicit only the location that will produce average, minimum sales of $100 per week, per machine, and keep the commission costs below 10 percent of sales. Your products should be priced so that you can derive a 50 percent gross profit.
The next stage takes more investment
When you decide to move your business out of the home, that will be the day that your start up costs start to resemble the real costs of running a business. The new facility will come with additional costs, so in order to provide the additional revenues to pay for all this; you will have to add more customers and machines in your Antares vending business. The business will have to expand in each and every way.
The return on investment (ROI) in a vending business will vary depending upon the size of the entity. In a one-man business, operating out of a home may make it possible to earn a realistic 40 to 50 percent ROI.
In a one- or two-person operation, ROI is not the most appropriate measure of success. The only relevant challenge is cash flow, it should be sufficient to support you. This being the case, vending will continue to attract entrepreneurs who are satisfied with a comfortable income.
The Challenge of Adapting to a Bilingual Workplace
The advantage of having a Hispanic workplace is if the communities where the vending machines are placed are at least 75 percent Spanish speaking. In such a situation communication between the workers and customers will not be a problem. There might be some locations where antagonism between the Spanish and English speaking populations is so intense that there is no effort made between the two groups to communicate unless it’s with the stiff formality of opposing armies. Servicing Antares vending machines in such a location might require not only bilingualism, but certain streetwise negotiating skills.
These employees have to know math. In the business they will need to add, subtract and know dollars and cents.
Not all positions require English
Not all the positions in your Antares vending business would require English speaking workers, as long as an application can be scratched out, the work ethic is there, and of course certain adjustments are be made. It would also be advisable for the route drivers to have cell phones, so that if there is any problem they can call and get in touch with the vending operator.
Best training method
Training materials would not be necessary in coaching the non-English speaking workers of your vending business by Antares Corporation. Man-to man coaching would be the best method. If there are things that are written down, you can place the individual with a driver who speaks the same language. This driver will teach them whatever is necessary. The written things in vending are not going to tell them how to get to a location, or what key numbers will open a machine, and what product to put in the machine.
The opportunity ladder continues
A main indication that multiculturalism is a benefit is not just the richness of various languages skills and idioms that tend to broaden the spectrum of language overall, but the fact that many economically challenged new hires, from other nations, ascend through the hierarchy to positions of authority,
The multicultural workplace in your Antares business can work out very well for you. Some of the workers who start off in the business without any knowledge of English can develop their English skills and in turn move up to a management position. All you want is a successful running business. A business is successful if you have hard working individuals. This is something very important in your vending business.
Cashless Options in Full Line Vending
Consumers love convenience, and the automatic merchandising industry isn’t about to let them down, not with all the benefits that cashless vending can offer. Telemetry solutions and electronic cash promise faster implementation of cashless options in full-line vending.
The credit and bank card readers are part of a broader movement by telemetry system providers to serve the automatic merchandising industry. Some industry veterans argue that cashless transactions aren’t the most important benefit telemetry offers; cashless systems do represent one of telemetry’s obvious consumer benefits.
For the Antares vending operator, credit and prepaid card acceptance will improve product accountability at the machine level. In addition to this it will reduce liabilities associated with cash, and also enable faster transactions. Enhanced customer convenience, meanwhile will translate into higher sales, while improved efficiencies will result in a more profitable Antares operation.
Lifestyle changes
Faster transactions have become important in light of changing consumer lifestyles. “Eating-on-the-go” has replaced the traditional at-home dining. This has made convenience of primal importance to consumers. As a result, Antares vendors, who have historically enjoyed captive audiences, have faced more competition from quick service restaurants, convenience stores and specialty retailers for on-the-go dining. Convenient payment options give these vendors a much needed tool in competing for these away from-from-home meals.
Magnetic stripe and smart card systems are not being widely used in vending machines because of their limitations. Most vendors provide these systems when requested to by an account. Credit and bank debit card systems on the hand, can be used by anyone who carries these cards, and thus making them have the potential to become standard peripherals in the Antares vending equipment. Most vending equipment manufacturers will imbed these readers in new machines on a request basis.
Higher sales
Some Antares vendors have cited that card readers will drive up sales because they will encourage consumers to spend more money. The card purchase would leave an electronic trail of what was purchased, when and by whom. This will do a lot for the vending industry.
Vending industry observers have long agreed that non vending uses for smart cards must evolve in the U.S. before the vending industry can take advantage of the infrastructure.
Specialization Builds Efficiency
The concept of running dedicated beverage route will be very beneficial for an Antares vending operator. The operator just needs to do enough business to keep at least one full time route person busy. There are a number of benefits that come with this.
Less loading
A well designed beverage truck, with outside, roll-up doors on the sides can be loaded by the pallet with a forklift truck. This will take a much shorter time than you would have, had you been loading a mixed-product route vehicle. In this case you would have had to load one case at a time.
More liabilities
Due to space limitations on a mixed product truck, Antares operators may not be able offer all of the brands they could profitably sell. Although many customers will opt for an alternate brand or flavor if their first choice is not available. Some can decide to walk away and that means the sale is lost.
A well designed beverage truck will allow you to stock all of the brands and flavors you need to satisfy your customers.
Make training easier
New beverage route people will only have to learn how to fill one type of machine and new mixed product route people will have one less type of machine to learn. This would reduce the amount of time it takes to train a new route person and thus bringing him closer to the point where he is capable of running a route on his own.
Efficiency
Specialization will produce efficiency in your Antares business. When an employee only handles one product, he will learn how to handle the product with very few wasted motions. He will fill the machines much faster since he will be more efficient. Mixed product route will also benefit. They would have one less product to worry about, and they will no longer have to trip over beverage cases in the route vehicle.
More time left for perishable goods
When the beverage cases are removed from the truck, and the beverage services are removed from the route, route people will be able to get to more locations to service perishable product machines. This should produce more productive routes.
If you attempt to run a dedicated beverage route for your Antares business, using a typical step or cube van, it would probably be too much work. You should go for a truck that can be loaded with a forklift. It works.
Route Commission Systems
Commission, (incentive) systems work very well in environments where the employee has a great deal of control over the rate of production, based upon his ability to work harder, smarter, longer or faster.
Commission systems can be less effective in industries where the employee has less than total control over the rate of production. A vending route environment would be one of those industries. For example, a route person who is paid on a commission basis knows that he will earn more if he collects more money on his route.
System must motivate productivity
A route driver will learn how to fill and clean Antares vending machines as quickly as possible. He should also reduce the amount of time spent at each location, with the hope that he will have more time to service more machines and thus, collect more money each day. Up to this point, a commission system appears to be a win-win situation for the Antares operation and the route person. In this way the employee can earn more commissions and the company can earn more profit. A survey that was conducted revealed that most operators pay drivers some type of incentive. Fewer pay drivers a straight salary. There are those that pay only commission, and others pay a combination of commission and salary.
Be aware of all possible results
There can be several downsides to commission systems as well. Since a route driver would want to service more Antares vending machines, he may, 1) drive too fast; 2) perform less than 100 percent of the machine sanitation requirements; 3) ignore simple, mechanical procedures, such as removing a paper clip from a coin acceptor; 4) not take the time to coin test a machine after filling it.
Any or all of these conditions can create more serious problems than the problem the commission system was originally designed to solve.
Pay plan has no bearing on schedule
A commission system, in and of itself, will not teach a route person how to schedule his route. The key to improving route productivity is scheduling the route person to service an Antares machine only after the machine has made enough sales to profitably justify the cost of service. This would be a management or supervision function.
The operator who runs weekly route averages of $4,000 to $5,000 and thinks that the installation of a route commission system will automatically double those averages is kidding himself.
