Top Banner
Student Operated School Vending Business Plan How To Operate State of the Art Nutritional Vending Machines in your School For Health and Wealth It s Broken You Can Fix It . . . And Be Paid Very Well To Do It School Vending Consultants (800) 633-1200 http://www.venducation.com © 2013 James Dillingham
28

How-To Manual Student Vending

Jan 02, 2017

Download

Documents

TrầnNgọc
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: How-To Manual Student Vending

Student Operated School Vending Business PlanHow To Operate State of the Art Nutritional Vending Machines in your School For Health and Wealth

It ’s Broken

You Can Fix It . . . And Be Paid Very Well To Do It

School Vending Consultants

(800) 633-1200 http://www.venducation.com © 2013 James Dillingham

Page 2: How-To Manual Student Vending

Vending machines in schools are like buffalo herds. Once, large numbers of soda, chip and candy bar vending machines were seen in school cafeterias, hallways and athletic centers. Students and faculty grazed frequently from these machines, much to their heart’s ‘ultimate’ discontent (due to the rather poor nutritional profile). Like the buffalo, these vending machines are not extinct but soon may qualify as an endangered species. What’s the problem with these school vending machines and their program structure? Why are they disappearing?

1.Poor Nutrition2.Very Limited Selection3.Very, Very Little Income for the School4.No Educational Component5.Limited Payment Options6.Frequently Empty

What’s the vending plan in your school? A. Outsourced Vending Services Company ... Coke • Pepsi • XYZ “Healthy” Vending ??B. School Operated Vending Machines Loaned From A Product Supplier?

Each of these school vending plans do not take advantage of the full potential for income, nutritional variety or contribution, school culture or educational opportunities. Student body operated vending dramatically improves all of the problems.

A. You can provide far greater nutritional variety, a wider range of payment options, keep the machines stocked and earn at least five times as much income than the tiny commissions received from an outsourced vending services company. Their expenses become the profits of a school operated vending program with state of the art automatic retailing kiosks.

B. You can offer far greater range of product choices than the very few, single-brand choices that are allowed in the cheap (supposedly ‘free’) vending machines that only accept $1 bills at least some of the time for purchases.

The Difference You Can Make• Greater product variety means more vending sales. Not everyone

wants just water, fake juice and baked chips. • More frequently restocked machines means more vending sales. You

can’t sell what isn’t in the machine.• More payment avenues means more sales. The machines should

accept $5, $10, $20 bills and quickly pay out change in dollar coins.

Student Operated School Vending Business Plan

2

Page 3: How-To Manual Student Vending

The machines should be able to let students and teachers use their school ID to access online funds for cashless purchases, just like the cafeteria.

• Advertising revenues, like new product sampling for online or social media product reviews, can offer more fundraising income opportunities.

• Less expenses means far, far, far more profit for the school and student activities. You don’t have to pay for an off-campus warehouse, route trucks, fuel, vehicle maintenance, or federal & state income taxes. All of those standard vending company expenses become profits for the school to support educational and student activities.

• Complete sales and inventory accountability through web-based vending management software insures integrity and offers a real world business educational experience.

Let’s Compare the School Income for just a Single Machine ! ! ! Full Service ! ! ! Student Operated! ! ! Vending Company! ! ! Vending Annual Sales! *! $10,000 ! ! ! ! $15,000 Annual SalesProduct Cost ** ! $4,200 (about 42%)!! ! $6,750 (historically about 45% of sales)Operational Costs! $2,500! ! ! ! - 0 -Fixed Costs ! ! $ 600! ! ! ! - 0 -Equipment *** ! $ 800 (Depreciation)! ! $1,200Misc. ****! ! $ 500! ! ! ! - 0 -School Commission $ 900! ! ! ! $7,050

* School vending sales are always dramatically greater with a student operated program. This is quite a conservative difference. Students do not have to drive from a distant warehouse to restock empty selections. Greater variety, more frequent restocking, more payment options all result in much greater school vending sales.** Vending operators will enjoy lower product costs due to volume purchasing. *** Depreciation is the annual equipment cost based on a seven year application. The student operated equipment does cost more as it offers more payment avenues, more selection variety , American Disability Act compliance, and internet managed Point of Sale and inventory management. There is more earning power in that higher equipment cost.**** Miscellaneous expenses include owners’ profits, state and federal income taxes, accounting and legal expenses.School Commission: You may think that $900 commission should be higher for $10,000 in sales, but this figure sample is actually quite generous. Vending operators do not pay the percentages they promise. This is because no one ever takes the time to audit them. This will be explained in the section about understanding the limitations of the vending industry.

Student Operated School Vending Business Plan

3

Page 4: How-To Manual Student Vending

How Much Income Can School Vending Machines Provide?While the range of income can be significant, even the smaller schools offer serious income potential. The healthy vending machine operated by the senior class at Madelia Jr Sr High School in Minnesota generates over $15,500 in sales annually, providing over $8,500 in profits... in their 299 students school. Just the dry snack vending machine in Concord HS in Massachusetts generated over $93,000 in sales over its first three years of operation. That snack is just one of four machines in that cafeteria. the combination vending machine in the Richford VT Jr Sr High School sold over $15,000 in its first year, with just 260 students.

In the 23 years Vend-ucation has been active in every application of school vending we have found that schools begin to look to replace their self-operated vending machines after twelve years of active use. This means that average Vend-ucation designed machine will generate $180,000 during its useful life. That delivers $99,000 in gross profit (sales with product cost deducted) for just a single machine over those 12 years.

Refrigerated MAX machines provide an average profit (sales less product cost) of about 55% with standard school pricing. The ambient NutriSnack kiosks provide an average profit of about 60%. Do not expect to make the profit margins of restaurants or even convenience stores, which both have to charge more for their products due to their operational expenses and facility investments. Pursuing higher profit margins than this 55-60% range will require excessive pricing, which will reduce vending sales.

A Real Profit ExaminationThe screen shot on the next page is an actual report from a High School using Vend-ucation’s web management vending software.This report shows that sales for the two MAX machines for the 2012-2013 school year exceeded $37,000. This compares very favorable to the two supposedly ‘free’ vending machines that were replaced, having been previously supplied by a local beverage distributor. Only their brand of water and simulation juice flavors were sold through the vending machines, generating just $8,000 in sales annually at only a 40% profit margin. This low profit margin resulted from having to buy those very high priced beverages from the company supplying that supposedly ‘free’ vending machine. They paid almost 60¢ per bottle at wholesale instead of about 15¢ at a local wholesale buyers club (Sam’s, BJ’s, Costco, etc). When the leased MAX machines replaced the ‘free’ machines their school vending sales exploded from $8,000 to $37,000 and their profit went from $3,200 to just under $20,000 (as noted in the report).

Greater product variety, more payment avenues, and the web managed vending machines generated far greater sales & far greater profits. The machines sent emails to the re-stockers

Student Operated School Vending Business Plan

4

Page 5: How-To Manual Student Vending

when products hit a low par level and an out of stock level, so that the 2 machines were restocked when needed to avoid lost sales. The most popular products are always the ones that empty first. The results speak for themselves.

This is the kind of automatic reporting with the Vend-ucation school self-op vending program that offers full cash and inventory accountability and the educational opportunities related to running a real business using state of the art technology. It is like having your own PA (Personal Assistant) who is right on top of everything.

Student Operated School Vending Business Plan

5

Page 6: How-To Manual Student Vending

Understanding the Problems with the Vending Industry In How They Address the Opportunity in School Vending

The two dominant operating models for school vending were identified on page 2:A. Outsourced Vending Services: A professional vending operator installs vending

machines in your school, promising to share the profits.B. Cooperative Vending: Beverage suppliers offer investment free vending machines for

someone in the school to operate but are required to buy all their products to be sold through those machines from that beverage distributor.

Both of these business models dramatically reduce the income that could be realized by the school. Let’s examine the rather surprising reasons for this claim.

A. Outsourced Vending There are four basic reasons why outsourced vending services will be less than 20% of the net profits a school could realize from operating their own healthy vending kiosks.

• The R Factor Deception: Vending Service companies bid for the right to provide vending services to schools. Most frequently that bid is based on a percentage of the total vending sales. Although some companies hide in the fine print that they will only be paying the promised percentage on the basis of the gross profits (after product costs have been deducted), hoping no one will read the fine print. These percentages mean absolutely nothing and have no basis in fact whatsoever. For some odd reason, schools do not audit vending sales. They do not require any proof that the sales being reported are accurate or imaginary numbers that are financially convenient to the vending operator. There is only one possible way to accurately audit school vending machines. That is to read the non-resettable sales meter on each machine. This is like a cash register that constantly accumulates the sales. You can’t even trust the vending companies computerized reports. This is because every vending accounting software program in the USA has to capacity to generate false commission reports and keep a record of the ongoing lies. This is called the R Factor in the vending industry. The R stands for reduction. It is extremely easy to verify this. All one has to do is Google R Factor Vending and you can read all about this integrity violation that is the foundational bidding principle of professional vending companies. When I operated an outsourced professional vending service in several northeastern states several years ago, we had our route person ask a school staffer to accompany

Student Operated School Vending Business Plan

6

Page 7: How-To Manual Student Vending

them to each machine at the first visit in each new month. We verified with them the non-resettable sales meter reading from each machine. They signed a form witnessing those sales numbers from each machine and kept a copy of the audit. My company offered the lowest school commissions of any company in the northeast, but we gave the schools the largest commission checks they had ever seen. When my competitors tried to take my school vending accounts away from me by offering twice as much commissions they were told they would have to go through the same procedure of auditing the sales of each machine. Not a single vending company was willing to audit their sales. This included a national vending company generating hundreds of millions of dollars in sales, and all local companies whether small or large. Not a single competitor was willing to offer auditing privileges to authenticate their promised commissions. In fact, according to industry reporting, the average commissions being paid to commission accounts end up being less than 10%. However schools are frequently being promised 20-30%. That is always a lie! If a company really paid that percentage of sales the prices would have to be raised so high the students would not want to buy anything from the machines.

• The second problem with this school vending model is that most of the vending income is burned off by the operating expenses of the outsourced vending company (as demonstrated on page 3). Converting these vending company expenses into school profits provides the bulk of the much greater funds schools enjoy from operating their own healthy vending kiosks.

• The third problem is that vending companies do not share the same supply chain as school cafeterias (where many healthy, popular vending products can be supplied for school vending sales). Additionally, vending operators only very rarely operate their own commissaries. They do not offer fresh sandwiches, fresh fruit yogurt parfaits, fresh baked cookies, veggies and ranch dip, baked pretzel and honey mustard dip, fresh baked muffins, a pizza slice, etc. They only offer commercially prepackaged beverages and dry snacks that come with the longest possible freshness codes, with all the necessary preservatives to

supply those long freshness codes. • The fourth problem is that vending operators must have at least 40% of a machine

inventory sold before they can afford to restock that machine. A vending operator’s profit is primarily based on lowering their operational expenses, not in selling more products. They need almost half of each machine to be empty or they can’t make a profit, due to the significant operational expenses they face... expenses which school self-operation does not suffer with. Outsourced school vending machines usually have many empty slots. This hurts sales, is inconvenient and lowers school income, but is crucial to the profits of an outsourced vending service company.

Student Operated School Vending Business Plan

7

Page 8: How-To Manual Student Vending

B. Cooperative Vending: I am frequently asked why a school should buy or lease their own vending machines when they can get ‘free’ machines from product suppliers. I really love this question. I am often tempted to ask these people if they are also lifelong members in the Flat Earth Society. There is no such thing as ‘free’ vending machines, or free anything actually. There are always costs associated with everything, whether obvious or not. Even the freedoms of a democratic society come with costs. Just ask any taxpayer. There are three unnecessary costs directly related to school vending machines provided by product suppliers.

1. Excessive Wholesale Product Prices Those supposedly ‘free’ vending machines have to be paid for in some way. No machine manufacturer donated these machines to the beverage wholesaler offering them to the school. They are paid for by charging a lot higher at wholesale for those beverages. When a school has to pay 60¢ (wholesale) for a bottle of water that they can get for less than 20¢ at a wholesale club (Sam’s, BJ’s, Costco, etc) then it is obvious how those ‘free’ vending machines are funded.

2. Terribly Limited Product Selection ‘Free’ vending machines mean you can only sell their brand and their flavors. No company offers the best of everything. This is America where we love variety and diversity. That concept of forced uniformity will be just as successful as the Soviet Union was. When more variety is offered, sales go up. Just ask Coca Cola why they offer nine different ways to buy a Coke, with New and Classic formula, caffeine free, Coke Zero, Cherry Coke, etc. etc. We want variety. How many grocery stores do you see with only one brand of everything? If it doesn’t work there, why should it be the business model for school vending?

3. Cheap Vending Machines When a product supplier offers ‘free’ vending machines, they are definitely not going to give you the top of the line. You’re never going to get the Mercedes. You’re going to get the cheapest on the lot. Usually you will get a Dixie Narco bottle drop that doesn’t offer first-in-first-out product rotation, can’t sell anything but bottles and cans, usually only accepts $1 bills and not fives or tens and never integrates with a cashless POS system and is ridiculously easy to steal from. Just watch this Youtube video:

http://www.youtube.com/watch?v=mNWLxLMX3zM ! Or this Youtube video: http://www.youtube.com/watch?v=8jQdoqLu54I Respecting the opportunity: We wouldn’t work a gold mine with a spoon. We wouldn’t drill for oil with our Black & Decker cordless. We should understand that schools are the absolute best vending location possible. Hundreds of teenage eating machines come to one facility for 6-10 hours each day and they like to make technology transactions. They like to do business with computers and machines. If we respect that opportunity and address it with the right tools the benefits will be exponentially greater.

Student Operated School Vending Business Plan

8

Page 9: How-To Manual Student Vending

Developing a Successful School Vending Business Plan

Step 1: Review the potential and the competition in your school Step 2: Research the possible machine(s) placement, product selection and product suppliersStep 3: Develop your business plan and present it to the school administrators for approvalStep 4: Choosing and ordering the customized vending machines, coordinate with the School ! IT Dept for providing a hardwire internet connection for each machine.Step 5: Machine set up and trainingStep 6: Operating procedures, including assignments for restocking, collections and maintenanceStep 7: Refining the process to achieve the greatest value, impact, accountability and funding

Step 1: Researching the Opportunity in Your School

Fill out this survey to determine the viability for successfully operating your own school vending business.1. __________ Determine the student population.2. __________ Quantify your school’s financial demographics by determining the percentage

of students qualifying for free or reduced lunch prices. Your District Food Services Director will know this. Another source for this information would be this website: http://www.publicschoolsreport.com/district.html . Just choose the state, then district and then your school. Scroll down to the “School Classroom Information” section and you will see the number of students in your school qualifying for financial assistance for meals. It is just simple arithmetic to determine the Free & Reduced percentage by dividing the total number of students into the number qualifying for financial assistance.

3. List all vending machines in the school by location, by who operates these machines and which school department receives funding from these machines. It is the student accessible machines you are primarily interested in researching.

Location! ! Who Operates This Machine! What Dept. Receives Funds________________ ! _________________________ ! _________________________________________ ! _________________________ ! _________________________________________ ! _________________________ ! _________________________________________ ! _________________________ ! _________________________________________ ! _________________________ ! _________________________

4. If there are school vending machines from outsourced vending companies, try to determine what actual funds have been paid to the school over the last year. Frequently vending operators are not only deceptive in their school commission payments but don’t even make

Student Operated School Vending Business Plan

9

Page 10: How-To Manual Student Vending

the payments unless they are called by the school asking why they haven’t received any funds. I have had more than one school report to me that they have received absolutely nothing in payments from their outsourced vending company in over a year, despite the fact that those machines were being restocked daily or weekly. Even if an Administration, Athletic or Food Service Department received legitimate funds, you have an opportunity to offer the same exact funding to them for vending sales, while keeping the huge remaining profits that would have been the vending operator’s operating and fixed costs, profits and income taxes.

5. Are there nearby convenience stores and fast food restaurants where currently students buy drinks, snacks and food that could be supplied in the student operated campus vending machines? This would offer two advantages. 1) Keeping students safe on campus because they won’t have to drive or walk off campus just to get a bite or a drink and 2) Parents could get email receipts for cashless vending purchases made by their son or daughter. Parents appreciate knowing the money they provide for their child is actually being used for healthy, nutritional food and beverages. Cash is anonymous and offers no assurance to parents for its responsible use.

6. Is there grant money available to subsidize healthy school vending (especially when it is student run)? Although there may be a variety of sources offering grants to support nutrition in schools, you should certainly check on the availability of Farm to School Grants http://www.farmtoschool.org in your state and also with your regional Dairy Association. If you are unfamiliar with these organizations, check with the Vend-ucation staff and we can direct you to your local Dairy Assoc.

Step 2: Research Machine Placement and Product Mix The absolute best location for school vending machines is the cafeteria, as long as the cafeteria is not locked up before or after school. If that is the case the best location would be right outside the cafeteria. The second best location would be the highest traffic location, especially if it is in common congregation areas. Vending success is very much about impulse sales. No one makes a reservation to dine at a vending machine. Visual exposure is directly associated with vending success.

You will need three things at any location where you want to place a vending machine: 1) an electrical outlet; 2) available dimensions to place the machine (42” W x 72” H by 36” deep... approximately) without upsetting the Fire Marshal by obstructing a passageway and 3) the capability of running an internet wire for a hardwire connection. You definitely do not want to rely on a wireless WIFI internet connection. That would be a very costly mistake. Your electrical requirements will vary by machine category. A refrigerated machine will need the

Student Operated School Vending Business Plan

10

Page 11: How-To Manual Student Vending

availability of at least 10 AMPS out of the usual 20 AMP availability for a standard 120 volt electrical outlet. An ambient kiosk will need less than 2 AMPS, requiring very little electricity.

The last placement issue is access for a machine delivery from outdoors, hopefully without requiring delivery personnel to bring a machine up a flight of stairs. While possible, that can be expensive and hopefully avoidable.

Product selection and supply sources will depend on the available options in your school. Sometimes there are vending contracts to be honored. However the legitimacy of these contracts may be challenged if commission promises have never been audited or if some other feature of the contract has not been honored by the outsourced vending company or the beverage distributor. Since outsourced vending companies never provide fresh, commissary prepared perishable products then this product category cannot be considered competitive. The first partnership to pursue would be with the cafeteria. They already purchase and stock many of the products that could sell well through a school vending machine. In many occasions the Food Service Dept will sell products to a student body operated vending operation at costs slightly above their own. This helps the cafeteria with purchasing power and allows them to make a 5-8% markup on these products. They cannot afford the labor costs to staff an after school snack bar, so the vending solution spares them an expense and part time staffing challenge. If the cafeteria is uncooperative or unwilling to assist then perhaps the Culinary Education Dept. can provide some fresh made products. The Food Service Dept would certainly have to be consulted concerning what products would and would not satisfy the USDA and state regulations as well as the community wellness policies. The USDA government meal subsidies should not be jeopardized by trying to sell non-compliant products from school operated vending machines.

“Challenges are disguised opportunities”, according to many a business guru. One of the challenges in school vending is providing a healthy and substantial product mix with reasonable prices. The traditional vending industry

energetically avoids fresh commissary prepared products and organic snacks and beverages with very short freshness limitations. While organic products can offer some selection depth for school self-op vending, they should never be the exclusive focus. Organic product costs will be excessive and frequently the minimum quantities needed for delivery will be too much to sell within their very limited shelf life. This is why the best route is to work

Student Operated School Vending Business Plan

11

Page 12: How-To Manual Student Vending

with the cafeteria or Culinary Dept for fresh products to sell through the school vending machines. The cafeteria probably bakes fresh, wellness-compliant cookies every day for their ala carte sales. They simply bake up frozen squares for a few minutes in the oven, but everyone loves them. The products that can be purchased wholesale from the Cafeteria or the Culinary Education Dept can be sandwiches (subs, wraps, PB&J halves, Smuckers Uncrustables and triangles), fresh fruit yogurt parfaits in a domed cup with a taped spoon, fresh baked muffin, a sliced bagel with a condiment cup and a plastic knife, a fruit cup with a taped spoon, a bag of grapes and a wide variety of other freshly prepared and packaged foods and snacks. These selections will not compete with a contracted vending operator, because they will not offer them. You may also have the freedom to sell such dairy products as milk, yogurt, string cheese and commercial smoothies. Vend-ucation offers a free Innoseal packaging system, which is faster and less expensive than packaging fresh cookies, muffins or fruit into zip lock bags (see a demonstration at a North Carolina school kitchen in this 18 second Youtube video: https://www.youtube.com/watch?v=Fhd81wUwLEY&feature=player_embedded . In fact, partnering with the cafeteria can offer a significant value to them, as they probably have freshly prepared products that are still unsold after the last lunch. There may be sandwiches, cookies, muffins and other fresh-made products that would either have to wait another day to be sold or could be sold at wholesale to be resold through the student operated school vending machines for all those after-school activity participants who get through with their activities about 4:30-5:00. They may not have eaten since 10:30 that morning. It would be a great benefit for a student getting out of football, basketball, wrestling, volleyball, theatre, math club or whatever to walk up to a school vending machine, punch in their student ID and PIN and then get a sandwich and milk. They may not be eating until 7 PM that night with 2 working parents. This is win-win-win. The cafeteria gets an outlet for fresh food they previously had to try to sell the next day... the students participating in after school activities don’t have to go off campus to find a C-store or fast food restaurant looking for more expensive and less nutritious food... also evening adult education students that don’t have any time to eat between work and evening class sessions can get something substantial, fresh, healthy and reasonably priced... and the school vending machines make a small profit... and the money is kept in the school for education and supporting student activities. Everyone wins.

Product selections could hopefully include: 1-2 selections of sandwiches (not a wide array as this will be self defeating), water, 100% juice, energy drink (if allowed), milk, juice flavors, pasteurized cider (if available from a local orchard), perhaps coconut water and any popular

Student Operated School Vending Business Plan

12

Page 13: How-To Manual Student Vending

beverages that will comply with school nutrition policies. The refrigerated spiral driven glassfront vending machine can dispense bottles up to 20 oz, cans (6-12 oz), boxes and pouches. There should be no problem with any of these packages as the equipment should have guaranteed delivery sensors that will continue running a selection auger until the product passes through the infrared sensors criss-crossing the delivery bin. If nothing passes through within 2 full revolutions

the machine will suggest they make an alternate selection and their credit will still be available. When offering products that need a utensil, it should be taped to the package, as seen in the photo.The package integrity of a domed cup or clear clamshell should always be insured with some tape, to prevent the package breaking open after the short fall into the delivery bin (as you see in the photo). Product labels can easily be made to identify the product from office supply adhesive label sheets run through the computer printer (as you can see in the photo).

Dry snack products can include a wide variety of items but must comply with school wellness policies. Baked chips will be the number one best seller. You may want to color code products according to potential allergies, such as nuts. Some schools will not allow any nut products to be sold on campus.

Student & School Staff Selection SurveysContinuing School vending success always requires being sensitive to school wellness policies and student safety. It may be a good exercise to offer a student survey for preferred products. This will engage the student body in the process and create anticipation. I first did this when the Nashua NH School Foodservice Director wanted to buy a vending machine for a K-8 school with about 600 students from the vending equipment distribution company I owned. The survey was generated from the list of available cafeteria ala carte products. I simply designed the machine auger configuration and tray heights to match their preferred product list. At the last minute the Food Service Director asked if I could install the machine on a full service basis instead of self-operation. I had never offered full service vending in an elementary school before, but wanted to support the Director and was willing to give it a try. I will never forget when I was called the day after the machine was installed and told my brand new machine wasn’t working. My techs were already in the field so I asked my Parts Manager to go look at the machine. It seems the dollar bill acceptor was so full of bills it couldn’t accept any more. I was stunned. That machine generated over $500 per week in sales. The rest of the lesson came when we tried to duplicate that success in another K-8 school in the same city with the same student population. Oddly, the sales were less than $100 per week in that machine. That was when I learned about financial demographics. Less than 10% of the students in the first school qualified for free or reduced priced lunches. Almost 90% of the students in the second

Student Operated School Vending Business Plan

13

Page 14: How-To Manual Student Vending

school qualified. While that differential would have far less impact at the High School level, it had a very strong effect at the elementary level. A product survey can identify strong sellers on the basis of how many times the same product shows up on the surveys that are either done on paper or online at the school website.

A school survey can be structured to not only provide product preference information but also used for pursuing School Administration approval for your plan. Surveys have a strange convincing power even when common sense doesn’t seem to work. Here is a sample set of questions listed on the following page. However you will probably want to customize this to the palates of your particular school and region. These are just offered simply as suggestions.

It is best to get permission to pass these out to students entering lunch, when they are hungry. You can ask for them to be placed in one or two boxes at the exit. A captive audience, especially at eating time, will result in a greater participation. This can initially be presented as merely research for a marketing project concerning how to structure a healthy vending school program.

Student Operated School Vending Business Plan

14

Page 15: How-To Manual Student Vending

! ! ! Sample School Vending Survey

Y N ! Do you participate in after school programs? Y N ! If yes, is this participation frequent? Y N !Would you appreciate a wide range of fresh food, beverages and snacks that could be purchased with cash or a student ID that could access a vending account funded by your parents/guardians for buying food on the school campus?

Which products would you probably buy from these vending machines if they were made available? Check all that apply:

Freshly Prepared and packaged at school:__ Meatball Sub ! ! ___ Ham & Cheese triangle ! ___ Buffalo Chicken Wrap __ Chicken Caesar Salad! ___ Fresh sliced fruit cup! ! ___ Fresh Fruit/Yogurt Parfait__ Fresh baked oatmeal raisin cookie from the cafeteria! ___ 2 oz blueberry muffin__ baby carrots with a Ranch dip !! __ fresh baked pretzel with honey mustard dip__ Hummus & veggies! ! ___ Nachos, salsa & cheese to heat in the microwave__ Cereal (brand:_______________ ) !! ___ Pizza slice __ Bagel & cream cheese

Snacks!__ Baked Doritos! __ Baked Cheetos ! __ Baked Hot Cheetos __ Baked Sr Cream & Onion__ Baked Cool Ranch Doritos __ Lo Fat Cheezits! __ Baked Ruffles! __ Chex Mix ! __ Hot & Spicy Chex Mix __ Trail Mix !__ Popcorn __ Pretzels! __ Animal Crackers __ Goldfish __ Crackers & cheese! __ Cereal Bars __ Baked Potato Crisps__ Snackwell cookies ___ Cliff Bar ___ Lo-fat muffins __ Dried Fruit

Beverages & Dairy__ Water! __ Vitamin Water __ Orange Juice __ Apple Juice __ String Cheese__ Choc Milk __ White Milk __ Strawberry Milk __ Coffee MIlk __ Soy Milk__ Yogurt & fruit __ Energy Drink ___ Juice Flavors ___ Fruit Smoothies __ Pasteurized cider __ Choc pudding __ Jello & fruit __ cottage cheese & fruitRecommendations ______________________________________________________________________________________________________________________________________

Student Operated School Vending Business Plan

15

Page 16: How-To Manual Student Vending

Researching SuppliersBesides your cafeteria there are many wholesale sources for vending products. There are always regional vending product and convenience store distributors. One very large chain of vending product supply centers is Vistar. They have a number of locations across the USA. They are happy to work with schools and offer thousands of product SKU’s. Type Vistar vending supplier into your computer search engine to get the phone number and address of your local supplier. Ask for a current product and pricing catalog, but also ask for their minimum case purchase for deliveries. You can also type wholesale vending product supplier into your search engine, along with the name of the nearest large city, to find an independent vending product supplier. You can also search under wholesale convenience store suppliers to find a potential supplier. Another excellent source would be wholesale buyers clubs (Sam’s, BJ’s, Costco). Sam’s Clubs aggressively pursue the vending market more than the other wholesale clubs, offering a wider range of vending products. Just don’t be tempted to buy the vending machines they offer. Those machines are specially made to sell at the lowest possible price range. I don’ t know any more polite but accurate way to describe them than saying those specific vending machines are absolute crap. The company who manufactures those vending machines for the buyers clubs also makes excellent equipment, but far too expensive for the goals of the buyers at the wholesale Clubs, who subscribe to the mistaken philosophy that value is limited to a purchase price. My grandmother used to tell me when I was a boy: “Buying cheap things is what keeps poor people poor.”Wholesale clubs do not deliver. You can send them an order to pre-pick, but the product still has to be picked up and transported to the school. Products at Wholesale Buyers Clubs can offer significant pricing advantages. When I operated a full service vending company serving many schools in three northeastern states, one of my trucks would pick up a couple pallets at a Sam’s Club a couple miles away every week. We bought 16.9 oz water, 12 oz Gatorade bottles, string cheese, juice flavors, Chex Mix, etc. We also used a Vistar center and three separate milk brand suppliers.

Ice Cream: While this is certainly possible, this vending product category is by far the most difficult. The equipment is expensive. The popular ice cream novelty selections never fit the limited nutritional profile for school vending. If power is lost in the school for an extended period of time there will be a mess to clean up inside that vending machine. This avenue is not recommended very often, but is certainly available.

Coffee and Hot Beverages: You definitely do not want a coffee vending machine. The equipment expense is exorbitant. They require a lot of specialized maintenance and delivers a poor product. It can’t be helped. No matter how good a coffee brand is used to make vending

Student Operated School Vending Business Plan

16

Page 17: How-To Manual Student Vending

coffee, the process has to be far too fast to produce a product that can be highly appreciated. The necessary use of powdered creamer is a significant flavor detriment. However that doesn’t mean you can’t sell coffee, hot chocolate, tea, Chai in your hi-tech school vending kiosk. Flavored coffee has become increasingly popular with teenagers over the last decade. It is estimated that 37% of teenagers now drink coffee. It is understood to be the fastest growing segment of the coffee market. Just check out the school trash just before school starts and see how many empty cups there are from Dunkin Donuts, Starbucks or local coffee shops. There are two ways to open your own 24-7 automated coffee shop in your school:

1. Place a hot chocolate packet, stir stick and perhaps a small marshmallow pack (if allowed) into an empty hot cup with a cover and place it into a 6 count auger in your ambient or combination vending machine and sell it for $1.00-$1.25. As long as a water bubbler and microwave is nearby, this works well. The same thing can be done with tea, Chai, and even coffee (Folger’s Single Coffee packs) as long as you add a couple sugar packs and 1-2 shelf stable Mini Moo or comparable, single-serve half & half cups.

2. Special augers or sub-floors can be installed in ambient or combination vending machines that will allow you to vend single cup coffee brew cups (like Keurig K-cups or Brew 1 bods). You will still need a commercial brewer to quickly brew that single cup brewing container. You will also need the availability of cups, covers, stirrers, single serve or bulk sweetener and half & half (shelf stable mini-cups or a specialty refrigerated dispenser like the very convenient Freiling Milk Chiller). You would probably need a water jug and pump to keep your coffee brewer supplied with water, as plumbing your coffee brewer to a direct water line in a school could be cost prohibitive.Vend-ucation can actually provide you with all the necessary components, including a wholesale buying status for the exceptional Brew 1 product line http://www.brew1.com . The Keurig K cup application cannot be recommended, as the ‘commercial’ brewers being used are currently rather troublesome. We don’t need any more grief than we already have to deal with in this life. Additionally the K cups are not in recyclable plastic packaging while the Brew 1 bods are recyclable. We always want to be socially responsible in our commercial pursuits.

Inventory Storage: You will also have to secure a locked storage area for inventory storage. Even if you buy most of your products through the cafeteria you will probably want to offer a greater variety than may be able to be purchased from the cafeteria or Culinary Dept. You may also be able to get far better prices on staple items from different sources, therefore needing a separate locked storage area.

Student Operated School Vending Business Plan

17

Page 18: How-To Manual Student Vending

Step 3: Develop Your Business Plan and Present it for School

Administration Approval.

If there are vending programs you want to replace in your school, then take time-stamped photos of the machine(s) you want to replace, demonstrating the number of empty selections, possible “out of order” conditions and the less than adequate range of nutritious selections. Your school vending proposal should be simple, clear and well researched. If you are looking to replace a current program you will need to demonstrate its shortcomings and how your team will implement improvements. The proposal should address:1. Show how you will satisfy the income already being supplied to whichever department

receives that small amount, if you are looking to replace school vending machines. If you are trying to simply install units that will not jeopardize any school department’s vending income then there will be no reason to offer to share any of the income. The funds you earn from your vending machines will be used to support student activities anyway.

2. Explain how you will Improve the product selection, variety and nutritional value in the school vending. These goals certainly support the goals of your community, the media, state and Federal agencies.

3. Explain how you will increase the vending payment options for everyone in the school by taking larger bills ( by paying out dollar coins in change) as well as a cashless payment option similar to what is used in the cafeteria. Explain how the parents will support this, as now they can know exactly what the funds they are giving their children are buying, as well as knowing they are safe on school campus for their after-school activities without having to go to a C-Store or fast food restaurant just to get something substantial to eat after school and before dinner late that night.

4. Explain how your plan will keep money in the school and offer full accountability to advisors and administration through the web management program.

5. Include equipment brochures and web management report samples.6. Explain how the machines will be secured (either to each other or the

wall) to insure student safety by preventing the rocking of machines. These brackets are supplied free with the Vend-ucation machines.

Step 4: Equipment Ordering & Site Prep

There are several very necessary Features for successful School Vending Kiosks that are not commonly provided with standard vending machines

• Custom Product Configuration: Venducation will design your vending kiosk to accommodate the specific product packaging and sizes you decided to offer in your research stage. This is very important as the standard cookie-cutter snack vending

Student Operated School Vending Business Plan

18

Page 19: How-To Manual Student Vending

configuration of 2 trays of candy, 3 trays of fried chips and a tray of high fat pastries will not accommodate a healthy or substantial product mix.

• Quantity: There will be school environments were a single machine is all that is needed. This would be the MAX ST5000. This machine can offer both refrigerated and ambient selections in the same machine. Additionally an ambient NutriSnack of any size can be used for both snacks, coffee/hot beverages and also school supplies. These machines can be custom configured to do double and triple duty for a faster ROI (return on investment).

• Internet Connection: This is the basis for a qualification as an automated retail kiosk and not just another vending machine. This is the basis for your Point of Sale cash-less purchasing capacity in using funds that parents or guardians place into the online Vend Account so that students can access with a double PIN identification to make vending purchases. This is also the basis for the web based inventory and sales management and alert system. The school IT Dept. will need to provide a hardwire internet drop where your vending machine(s) will be placed. Wifi will not be adequate. There may also be issues related to firewalls that may have to be addressed when the equipment is installed and the kiosk software is directed to the necessary IP address, accommodating 2-way internet communication.

• ADA Compliance: A healthy school vending kiosk must be ADA compliant. In March of 2012 the American Disability Act civil rights legislation for the wheelchair handicapped became effective. This law requires that all vending machines placed into public buildings after that date must offer payment and selection access within 48” as well as retrieval access within 15-48”. Most vending machines are not in compliance. The problem is exaggerated in that it is not the vending equipment supplier or outsourced vending operator that will be fined up to $55,000 by the Dept. of Justice. It is the school. We need to always be socially responsible and make sure our vending machines are both legal and accessible to the handicapped. Vend-ucation machines are always ADA compliant.

• Video Surveillance: If possible it is always best to place school vending kiosks where there is video surveillance that can be directed to the vending machines. Therefore if there is ever an issue with a cash-free payment the time stamps can be cross checked to see who actually made the contested purchase at that specific time.

Payment Options: the Vend-ucation School Vending Kiosks can be paid for in a variety of ways: a Municipal Lease, 30 day terms, by credit card, or a 30-60-90 payment plan.The most popular is the Municipal Lease. There are significant advantages available to you with a municipal lease. There is no deposit required, therefore the kiosk is self-funding from its first month of operation, requiring no budget investment to be recovered. A monthly lease payment ranging from $195 down to $160 (depending on the kiosk model) can be easily

Student Operated School Vending Business Plan

19

Page 20: How-To Manual Student Vending

covered in most cases by the net profits from the first 7-10 school days of each month. The freedom to cancel the lease at every annual budget renewal period due to the non-appropriation of funds offers a safety net to the municipality that takes responsibility for these payments. A municipal lease does require the approval and authorizing signature of school administration, such as a School Principal or a District Level Manager... even if the payments are made by a DECA or FFA or FBLA chapter.

On the next page a sample municipal lease is displayed to understand the advantages and responsibilities.

Student Operated School Vending Business Plan

20

Page 21: How-To Manual Student Vending

AnyWhere High School

2. LEASE AGREEMENTInland Finance Company (INLAND) hereby leases to Lessee, and Lessee hereby leases from INLAND, the personal property described below, together with attachments and accessories, all herein referred to as "Equipment", upon the terms and conditions set forth in this lease.

1 Alpine ST 5000 refrigerated vending machine with DBA, Chgr, VendNovation controller, ADA compliance kit, FFA Decal, web management, POS integration

MUNICIPAL LEASEINLAND FINANCE COMPANY

8040 University, Des Moines, Iowa, USA 50325

1. L E S S E E

Address: Main St Anywhere

MONTHLY RENTAL $197.88 LEASE TERM 60 MONTHSSALES AND USE TAX -0- NUMBER OF ADVANCE PAYMENTS (If applicable): NAAMOUNT OF MONTHLY PAYMENTS $ 197.88 SECURITY DEPOSIT $ -0-

EQUIPMENT LOCATION (If different from Lessee address above) Anywhere High School Main St Anytown USA 10001(Address) (City) (State) (County) (Zipcode)

3. TERM, RENT

(A) The Term of this Agreement will commence on the date of its acceptance by INLAND and will expire on the last day of the 60h fullcalendar month after the day the Equipment is received ("Receipt"). However, such expiration will not release the Lessee from its duty to perform any and all obligations under the Agreement. (B) Rent will be payable 30 days after Receipt of the equipment (unless the Lessee has complied with (C) hereunder) and in all events on the same day of each month thereafter.

4. END OF TERM AGREEMENT

Lessee and INLAND hereby agree that the Lessee will purchase AS-IS-WHERE-IS interest in all, but not less than all, of the equipment leased or otherwise included under the lease at the expiration of the term thereof for $1.00 from INLAND, it being understood that there is no voluntary right of early termination under the lease.

5. NON-APPROPRIATION OF FUNDS LEASE.The parties understand that as long as Lessee has sufficient appropriated funds to make the payments above, it will keep this agreement in effect through the term of the agreement and make all payments. The Lessee may terminate this agreement at the end of the first, second, third or fourth year in the event the Lessee fails to appropriate sufficient funds to meet its obligation thereunder. The obligation of the Lessee to make Base Payments under the agreement is payable from funds of the Lessee lawfully available therefor. Such obligation does not constitute debt of the Lessee within the meaning of any constitutional or statutory limitation and does not constitute a liability or a lien or a charge upon the funds or property of the Lessee beyond the fiscal year for which the Lessee has allocated funds to pay Base Payments. At the end of each year the Lessee shall have the right to end the Lease by returning the equipment, less reasonable wear, or purchasing the equipment at a cost less than the remaining total lease payments. After the 60 payments are made the equipment will become the property of the Lessee.

6. AUTHORIZED SIGNER: a duly authorized signer for the Lessee must execute This Lease and the signer's title or representative capacity must be indicated. The signer warrants that he/she has authority to bind the named Lessee.

LESSEE: Dean Vocational Technical HS ACCEPTED: Inland Finance Company__________________________________________________BY:

___________________________________________________________ _________________________________________TITLE: BY: ___________________________________________________________ ________________________________________DATE: DATE:

THIS LEASE INCLUDES ALL THE TERMS AND CONDITIONS ON THE REVERSE SIDE

Inland Municipal Lease

Student Operated School Vending Business Plan

21

Page 22: How-To Manual Student Vending

Installation Lead Time: Once a payment plan and product configuration have been determined, the equipment order can be placed with Vend-ucation. It ordinarily takes from 3-5 weeks from order placement to factory shipment. School vending kiosks are not simple cookie-cutter vending machines. They have to be custom built separately for each order.

Delivery Challenges: Walk the route from where the vending machine(s) will be placed right to the point of entry in the building. Will the machine have to go up any stairs? This can be done but special equipment will be needed. Are doorways at least 32” wide (allowing for the removal of a center beam between a double door). Although these machines can go through a openings of less than 31”, this requires special handling and Vend-ucation needs to know this in advance.

Step 5: Delivery, installation and Training

Your school contact will be notified when your equipment order has shipped. The trucking company is paid to make a delivery appointment with your school contact. When the machine arrives they are paid extra to bring the machine into the school right to the point of operation. The crating is supposed to be removed and taken away.

Change Coin: You will need $109 worth of change to initially fill the coin tubes of each coin changer. These coin tubes will automatically refill as coins are inserted for purchases but must be filled initially or the machine will not be able to accept $1, $5 or $10 bills. Here is the list and quantities of coins you will need for each machine being installed:$75 Dollar coins (3 rolls) These can be purchased at your bank and will be needed regularly$20 Quarters (2 rolls)$10 Dimes (2 rolls)$ 4 Nickels (2 rolls)$109 Total

Technical Service Set Up:A local technician will be assigned to set up your machine(s) and train everyone on the operation and maintenance of each machine. This appointment should be coordinated with a School IT representative, due to the necessary internet connection and the potential firewall challenges for the necessary two way internet communication for supporting the cashless payment option, the web management program and the alert program. One issue that should be understood is to schedule a time that will be after 8AM Pacific Time, as the offices of VendNovation (the vending software supplier and support) is based in Bellevue WA. They may have to offer reference support to the installing technician at your school.

Student Operated School Vending Business Plan

22

Page 23: How-To Manual Student Vending

What you need to be ready for this set-up appointment: 1. The $109 in change coins2. At least some (if not all) of the products you want to sell and the prices you want to sell them

for. 3. The hardwire internet wire to plug into the vending machine.4. The coordinated time for a School IT rep and any volunteers or students that will be

assisting with the vending fundraiser, such as restocking or maintenance.

The Tech will set up the machine for operation; show you how to assign selections for different sized products, dual auger motors and single auger motors; how to collect the money; how to set prices and load change into the tubes; review machine maintenance and how to resolve simple problems (like a bill or coin jam and cleaning or replacing your air filter on a monthly basis).

You will need to schedule a separate software training session with the VendNovation software support team, based in Bellevue Washington. Via a web-based meeting and phone conference. They will show you how to operate your web management software, set up your automated email alerts, design your product and cost/price planogram and generate your reports.

Step 6: Operating procedures, restocking, collections and

maintenance

You are ready to start making money from your healthy school automated retailing kiosk. Let’s look at some of the procedures you will need to follow in order to maximize the value and decrease the potential disappointments.

A. Key Controls: Be careful with the vending keys. You do not want ‘factory’ locks and keys, because anyone and everyone will have keys to your machines. Anyone in the vending industry will have standard factory keys, perhaps even their children that attend your school. These common keys can also be copied by locksmiths quite easily. Vend-ucation offers two separate key solutions but each is proprietary. You need to keep your vending keys under lock and key. You need to know who has access to these keys and when they have these keys, as they are the key to the bank. We want to keep honest people honest. Make a record of your key number so that if the keys are ever lost you can get a key replacement quickly and inexpensively without having to drill the lock.

B. Maintaining the integrity of the planogram: You will need to fill out the product information on your VendNovation school vending website... product identification, selection

Student Operated School Vending Business Plan

23

Page 24: How-To Manual Student Vending

location, retail price, wholesale cost, the desired par inventory level and the total available inventory count for each selection. This will enable the integrity of your reports and email alerts, which offers the operational efficiencies. You will also need to make sure the exact products are always placed in the correct locations, and not indiscriminately loaded wherever there may be room to drop a product. This would eliminate the value of your web management capability.

C. Cash Handling & Accountability: The POS on-line based vending sales will be easy. The money will be paid directly to you on a weekly basis, either sent by check or automatically deposited into your bank account via routing number. It is the cash that can present the problem. Cash is anonymous.

1. You can lock up the cash box and the bill stacker so that several team members may have access to the machine for restocking but only certain team members have access to the cash.

2. If your machine is running low on dollar coins or nickels (or other coins) you will have to add some coins. However, just like operating a cash register... your machine will have to ‘buy’ those coins with funds from inside the machine. If you load another roll of dollar coins (the most commonly required addition) that will probably be a $25 roll. Therefore $25 in bills will have to be removed from the stacker to make sure your cash is not imbalanced. If a $2.00 roll of nickels (2nd most common required coin addition) then $2.00 in bills or quarters or some kind of funds must be traded out to prevent the impression that you have more cash than sales. This is the exact same procedure used by retailers to balance the cash in registers to the recorded sales. The school vending kiosk is simply a self-operated retail store. The same procedures should be followed.

3. Whenever a cash collection is made, each machine should be collected separately into a Tamper evident bag or a zippered canvas bag or some separate sealed container. Inside each separate collection bag should be a record of the particular machine from which these funds were taken, the date and time of the collection, the non-resettable sales meter reading at the point of collection and the name of the person making the collection. A sample form is presented below. A separate person should then count the cash from that collection, compare the total cash to the difference between the previous sales meter reading and the current sales meter reading.

Please understand: The difference between the two sales meter readings and the total cash collected will almost never match exactly. The reason for this is that the change tube coin levels will fluctuate. You may have several five or ten dollar bills in your collection bag, meaning that your dollar coin change tube inventory will have decreased. You should not have to count the change tube coins with every

Student Operated School Vending Business Plan

24

Page 25: How-To Manual Student Vending

collection, as this would be absurdly time consuming. However, you can track your daily overages and underages and if there is a problem then a pattern will be demonstrated cumulatively within just a couple weeks.

Vending Collection Form (Sample)

Machine Identification ______________________________

Date ____________! Collector ___________________________________

Meter Reading ___________________________

Coins Value Added ____________ nickels - dimes - quarters - dollar coins

If a vending collection agent is sent out with coin rolls needed for school vending machines, they must return with the same separate funds. If they leave with $50 in coin then they have to return with $50 in bills or a combination of bills and coins, completely separate from any sales collection bags. Any change coin added to a machine must be purchased with other funds from that machine. If this is not done, you will lose the ability to match the sales figures with the available cash in the machine.

Tamper Evident Collection Bags: Many large vending and cafeteria companies will use TE (Tamper Evident) bags when collecting the cash from both registers and vending machines. This separates out the cash handling into personal accountability stages, respecting the exposure that an anonymous transfer of cash can create. Venducation would be happy to provide an SOP (Standard Operating Procedure) to any school requesting it. This TEB SOP has been provided by Loss Prevention Results, LLC, the leading consultant in the USA for preventing losses from vending operations.

If your school has an operating commercial bank on campus, deposits can be made there on the same day as the collections. If cash has to be stored then it should be kept safe in a locked and secure enclosure and preferably where there may be video surveillance maintained by the school.

D. Equipment Maintenance1. The outside and inside of each vending machine should certainly be kept clean. The

glass should be cleaned regularly. No one likes to eat from a dirty plate. A dirty vending machine will be very unappetizing. Vending sales are very much dependent on impulse

Student Operated School Vending Business Plan

25

Page 26: How-To Manual Student Vending

sales. No one makes a lunch reservation at a vending machine. The advantages of availability and convenience can be over-ruled by a machine with hand prints all over the glass, spilled product on the trays and crumbs in the delivery bin.

2. You must clean or change the refrigeration air filter in a MAX machine every single month. This filter is in the cabinet on the bottom right. It slides out toward you. School floors are cleaned daily, creating a lot of dust in the air. This dust can clog up the airflow that has to cool down the refrigeration compressor that is removing the heat from inside the MAX vending machine. When that airflow becomes plugged by dust the compressor will overheat and lose its efficiency. The cabinet will rise in temperature. Eventually the machine will exceed 42º in temperature. This will engage the healthy timer, that will automatically incapacitate the purchasing capacity for the machine. The refrigeration will still operate but no purchases can be made until the Health Timer is reset (by going in-&-out of the Service Mode, using the tiny button on the control board) or cycling the power button which effectively re-boots the machine. If you keep that air filter clean this will not happen. Twice a year the air intake screen on the bottom right of the cabinet will also have to be brushed, to remove any dust build-up. Once a year the dust on the rear exhaust screen of the MAX refrigerated machine should be brushed away. This extends the life and the efficiency of the refrigeration system.

3. What to do when there is a problem: If there is a problem that can’t be quickly or easily resolved the best response is to call the factory Technical Support Dept at this number: (888) 836-3638 This is also 888 VEND NET. If for any reason you need a second phone number you can also call the main factory number (800) 247-8709 and just ask for the Technical Service Dept. It is best to stand in front of the opened vending machine that is having the problem, speaking to the factory service tech with a cell phone or cordless phone. They will ask you questions and make suggestions in order to resolve your problem immediately, if possible. Remember that their office is located in the Central Time Zone with Monday - Friday normal business working hours. These technical support personnel are highly trained professionals, determined to resolve your vending related technical problems as quickly and inexpensively as possible. They can also assign a local technician to resolve an in-warranty problem or refer you to a local technician for on-site support.

Student Operated School Vending Business Plan

26

Page 27: How-To Manual Student Vending

Step 7: Re!ning the Process & Promoting Your Vending Program

to Achieve Maximum Value

GO BIG or GO HOME

Now that your vending machine(s) is starting to sell products and the money is starting to roll in ... and you have operational procedures in place with people assigned for restocking responsibilities, and maintenance and problem response assignments, and cash handling and accountability procedures all in place... now you can make everything better and easier. When things are working well they seem effortless.

A. Media Promotion: Healthy vending in schools is news, especially when these machines are internet managed... and especially when students are running the vending as part of their business education. Vend-ucation can provide customized press releases that can be submitted to local and state print, radio, internet and television news agencies. Good press is always helpful.

B. Maximizing sales Management with your VendNovation Vending software: You can easily run weekly or monthly sales reports for each machine in different formats in order to make informed marketing and inventory buying decisions. You can generate a sales report based on unit volume to see which are your best and worst selling products. You can generate a report based on dollar volume as well as profit contribution for each individual selection that will also be cumulative. Since vending success is based on impulse sales, there may be products that sell very well at first but then slow down and need to be replaced. There may be products that aren’t the best sellers but provide a significant profit contribution. If you have an inventory buying opportunity but have to balance the capacity to sell all that product within a freshness code limitation your sales reports can supply the necessary information to make an accurate buying decision.

C. Having parents register for online accounts will be very significant in maximizing your vending success. This registration needs to be promoted. Vend-ucation and VendNovation will be happy to wave the small annual account registration fee for the first 90 days after your equipment installation, to encourage parents and guardians to provide these convenient on-line funds their children can use only at the healthy school vending machines. This notification should be by email. If parents and guardians do not have an email address it is doubtful they would want to fund an on-line school vending account for

Student Operated School Vending Business Plan

27

Page 28: How-To Manual Student Vending

their son or daughter. However the notification should explain how your school now offers parents the capacity to offer funds that can only be used to make healthy vending purchases at the new school run vending machine(s). They can not only put funds onto this account for their child but receive email receipts for all purchases, limit access to these funds and establish limits per day for what their child can spend.

D. Soon, Vend-ucation and VendNovation will be adding the capacity to earn advertising money through your POS integrated, student operated vending machine. We will be offering various income opportunities depending on whether the students of a particular school initiates their own sampling or advertising account that may be local or national, or if they are simply participating in a nationwide program provided by another school or Vend-ucation or another related source, such as DECA, FFA or FBLA.

Student operated school vending offers serious business and marketing training, harnessing state of the art technology in the real-world environment of computer automated, internet based retailing. This program has the capacity to engage and challenge students offering significant contribution potential for the next generation of Americans, that we who are training them will be dependent upon when we want to retire.

School Vending Consultants

(800) 633-1200 http://www.venducation.com © 2013 James Dillingham

Student Operated School Vending Business Plan

28