Posted on: December 18, 2019 |
Your business plan outlines the most important aspects of your new business. Your plan can help you make important decisions, obtain financing, and define the future of your business. Businesses of all sizes and types should have this organizational tool. In this blog post, we’ll walk through an example ice vending machine business plan which you can use as a roadmap for your own ice vending machine business plan.
Getting Started With Your Ice Vending Machine Business Plan
While there is a recommended format for a business plan, all businesses are different. We’ve simplified the traditional business plan format to highlight the elements that are more important to the vending machine business. Depending on your situation, you may want to add, remove, or change these sections and the examples provided.
Summary and Description
Your summary and description should describe what and where your business is, what you provide, who you are serving, and an overview of your team and structure. You should also include your competitive advantages, and why your business will be successful. The following is a brief example of your ice vending machine business description to get you started. We’ll use a hypothetical business, Example Ice, made by hypothetical owner Sara Example. Depending on the goals you have with your business plan, and the details of your business, you may wish to expand on it.
Example Ice provides fast, clean, bagged ice for consumers in the Example City area. Example Ice begins with a single mid-sized ice vending machine designed to serve moderate traffic at a pivotal intersection. This machine paves the way for Example Ice to expand across the Example City area. Led by Sara Example, with supporting real estate location and cloud-connected remote management services provided by Ice House America, Example Ice has the potential for stable, reliable growth in this underserved market.
Example Ice taps into the area’s core working demographic, manufacturing employees. These residents are currently overpaying for less sanitary ice at convenience store locations in order to fill coolers on their way to work. Example Ice fills this need by providing instantaneous, affordable ice made on-location from a machine directly on the central manufacturing commute route.
Market analysis is a critical part of any business plan. This is the part of your ice vending machine business plan where you will provide more details about your target market, growth potential, competition, and industry outlook. Supporting documents, such as maps, consumer surveys, traffic patterns, and demographic information, may be helpful here. These documents are generally appended to the end of your business plan, with reference points within the plan. Here is an example market analysis overview paragraph to get you started.
Example Ice primarily serves manufacturing workers in the Sample District of Example City. This demographic has been steadily growing in Example City as Parent Manufacturing Company continues to expand (see appendix A). The primary traffic routes to and from the central manufacturing facilities are from Example Street A and Example Road B (see appendix B). Example Ice’s introductory, medium-traffic ice kiosk will be placed along this route at Example Intersection.
With visibility from this popular route, including obvious signage and the machine itself, Example Ice can expect between 22,000 and 30,000 annual visits. Ice demand peaks are expected between June and August with the addition of seasonal road construction workers in the area, with demand lows between December and February as cooler temperatures decrease the need for ice.
Currently, consumers purchase transportable ice in this area from convenience stores, including primarily Store A, Store B, and Store C (see appendix C). However, consumers have expressed dissatisfaction with this option due to the following: the inability to break up ice from the bag, the unsanitary nature of pre-packaged ice, the expense, wait times at the store, and low ice inventory (see appendix D). Example Ice solves these problems, providing a superior customer experience at a lower price.
Organization and management
How you legally arrange your business will depend on tax and finance implications, among other factors. Since ice vending machine businesses require minimal upkeep and no inventory, many business owners choose a sole proprietorship. This is a simple business arrangement that requires little preparation. Other owners seek to separate their assets using an LLC. This is a good option if you are investing in an ice vending machine for retirement. If you are investing with a friend or family member, you might consider making a partnership, including a contract for financial responsibilities, revenue division, and buy-out options.
Using our previous example, here is a simple organization and management overview with a sole proprietorship arrangement.
Sara Example is the owner and sole proprietor of Example Ice. As the former manager of Best Example Restaurant for 7 years, Sara Example has first-hand experience in running and managing a small business. Sara was in charge of managing Best Example Restaurant’s invoices, inventory, payroll, and financial documents. She also made marketing recommendations and advertising decisions that increased Best Example Restaurant’s annual sales by 15% for three consecutive years.
In this section, it’s important to describe why this product is important, how it serves the customers, and opportunities you may have for business growth in the industry. For some businesses with technologically advanced products or complex service structures, this can be a lengthy section. For your ice vending machine business plan, you are describing a product and process that everyone is familiar with, so less description is needed. Here’s an example.
Transportable ice is a convenience for some and a necessity for others. For employees working long hours in manufacturing and other fields where working conditions can be hot, dry, and uncomfortable, a cooler full of ice helps to make the work day bearable. For perishable lunch items and drinks, it’s a necessity. Example Ice seeks to fill this need in a way that is faster, cleaner, and cheaper than currently available options.
Ice vending machines provide readily bagged ice that does not clump together like store-bought ice, making it easier to transport to a cooler. Since it is made on-location from purified water, it is also more hygienic; store-bought ice trades hands numerous times during the bagging process, and may sit in containers for days. Finally, ice vending machines make ice faster and more affordable, with wholesale prices and no need to wait in line.
Marketing and advertising is essential for all businesses. If customers don’t know where you are or what you provide, they’re unlikely to visit your business. In this section of your ice vending machine business plan, describe how you will get your target market’s attention and convert them into consumers. This strategy will vary by location, the type of ice machine you have, and other factors. Here is a simple example.
Example Ice’s first ice vending machine location at Example Street A and Example Street B is ideal to attract commuters going towards manufacturing plants. The machine itself will be visible from the road and clearly marked. To maximize visibility, prominent signs featuring ice prices and competitive advantages will also be placed in the adjacent lot. When motorists stop at the intersection, they will be able to clearly read these signs.
To attract new customers, Example Ice will utilize Ice House America’s online ice management system, and provide discounts and free ice to customers during peak hours. These discounts will also be featured on the nearby signage.
If you are using your business plan to obtain financing for your first (or additional) ice vending machine, this will be particularly important. Your funding request should explain how much money you need, what you will use it for, and your projected payback period. Again, this section will differ depending on your situation. You might use this to apply for a business loan through a bank, or Ice House America can help you obtain financing through the Small Business Association.
Example Ice is seeking a $30,000 business loan for the first ice vending machine location. This, in addition to Sara Example’s personal investment of $20,000, will fully cover the cost of the machine. Utilizing expected annual sales derived from traffic numbers and benchmark ice vending machine sales in comparable areas, Example Ice expects to repay the loan amount in 20 years at 4.5% interest.
Now that you have a starting point for your ice vending machine business plan, it’s time to get started. If you have a location and financing options in mind, you can get started on your own. If you’re not sure, or you’d like more information about choosing a location and loan options available, contact us.
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