Should I buy into this business?

[nivending]

Hello everyone.

I run my own business in another industry. My father is retiring soon and could work two days a week.

I have an opportunity to purchase an existing sweet business based on tubz vending towers. There's around 100 towers all sited.

I'm told its a very profitable business but as theres not a full set of accounts I'm unsure.

So how do I value this business?

The geographical area is spread out over a 60 mile radius from my home. Is this workable?

Could 100 sites be serviced two days a week?

I'm told average profit per tub is 35pence after tub cost and commission. Is this accurate?

If as a min each tower sells 30 tubs per month then that's a profit of £10.50 per tower per month. This seems very low. Even visiting 20 sites a day is only £210 for a lot of work. So are these figures too pessimistic?

Whats the future hold for this business? New pound coins and rising purchase prices of tubs makes me think there's short life span for the business. What's your thoughts?

Sorry for the questions but I need hard facts from people in the game.

Thanks

[Snackmore]

Without audited accounts I would be very careful and therefore value the business low. I would offer no more than £80/£100 a site (going rate for ex vending revolution towers) to include stock or cash in towers. I would suggest there is approx 5/6 days work a month there.

60 miles is not ideal IMO for towers 20/30 mile radius max - you will have to factor in fuel/extra time/wages

I would suggest 40p a pot as gross profit, work on £5/£7 a month profit per tower, this is more realistic

Yes there will be expenses when you change the coin carrier in 2017 - approx £10/£15 a machine

Also worth visiting the sites or at least researching them, if they are staff rooms and care homes they may not be the best (although some are very good)

Only you can decide if this is right for you - its unfortunate that many do not run as a proper business with accounts and a history and this must be reflected in the valuation.

Remember no site is guaranteed, you may turn up and they tell you to take the machine away for one reason or another. Also ensure the machines are sold full and not half full/cash removed!

I would suggest (depending how far apart sites are servicing 15/20 a day - but that would be a busy day

[part-time-operator]

what turnover are they claiming? £30/month is very feasible for only 100 towers. What part of the world are you in? 60miles radius seems huge for only 100 sites unless you're in a very rural area... What's their asking price? If it's unreasonable I would walk away but Steve is a tight git as I'm sure he'd admit so you can afford to pay more than that and not lose money.

[Coin Operated Group]

If no accounts, ask for copies of invoices for stock purchased during last 6 months. They can provide this or their supplier can provide it.

[Style]

A decent sited tower can easily be worth £150. Ive paid anything from £85 to £150 per tower when sited and would suggest somewhere in the middle is fair.
You say £10.50pm profit doesnt seem like much remember you dont have to visit every month. I have towers that are doing £50-£60 per week that I visit weekly but I also have towers that take 3 months to get £50 so I visit 3 monthly. 2 towers an hour is a nice leisurely pace so if you can time each visit to collect £50 its a fairly comfortable £35-£40ph.

[Style]

And I wouldnt worry about accounts.

[PabloV8]

I would say it is a reasonable business for your relative and agree with what has been provided thus far.

I am retired (less than 60) from a professional field and took up this business last year starting from scratch - I found tubz vending to be very helpful and now have in excess of 150 towers.

I do more than two days a week but I start when I want, finish when I want. For example, yesterday was installation day so installed 6 new machines about 50 miles away, weather was up and down so I called it a day about 15:30.

Style and Steve are both spot on.

I factor 30 minutes for a service as this includes getting there and moving on to next customer. I am fit but find no need to have to rush about like a lunatic.

Your relative will enjoy the opportunity, will become self financing, will be kept busy and depending what business you are in, just might find you some new customers - no brainer really!