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Write a Business Plan

Starting a gumball machine business may seem like a quick and easy venture, but it is--above all else--still a business. Just like any other business, a gumball machine business requires advance planning, marking plans, capital and time investments, and even contingency and exit plans; all of these requirements are included in a properly written business plan. For information on writing a business plan, and some useful templates, consider visiting the Service Corps of Retired Executives (SCORE) website.

To be successful in a gumball machine business, it is necessary to have physical ownership of at least one gumball machine and, preferably, gumball inventory with which to stock the machine. These machines can be found at major business retailers like Sam's Club or Costco for as little as $90, or can be purchased in lightly used condition at consiberably lower prices. Newcomers to the gumball vending business may wish to start off with only one or two machines, then add machines and grow the business after becoming familiar with the operation. To start with a single machine and inventory, a gumball vending business owner may begin with as little as $200 in capital, though additional expenses--such as business cards, mobile phones, and stationary--may increase this amount to as much as $500.

With the gumball machines on hand and available, they must be placed in public locations to generate income. Ideal locations are businesses with high amounts of traffic such as restaurants, laundromats, nail and hair salons, bowling alleys and lounges. In most cases, the business owner or local manager can approve placement of the gumball machine on the premise, though a corporate officer may have to sign off on the machine in some companies.

When placing gumball machines, a gumball machine business owner may be required to split the profits with the owner of the location, or possibly pay a fixed monthly fee to "rent" the location. Instead of paying a rental fee, however, some gumball machine owners join forces with select non-profit businesses like the Cancer Fund of America or Project Hope. With a valid, verifiable sticker from such a nonprofit company, many business owners will allow the machine to be placed in the business for free; in exchange for the stickers, the vending machine owner simply agrees to make a small monthly contribution to the charity. This sponsorship arrangement becomes a beneficial situation, as the charity receives much needed income, the vending business owner pays a lower monthly fee, and the owner of the location where the machine is placed is perceived as supporting the nonprofit organization.

A well-placed gumball machine should produce between $30 and $40 per month in income; because an entry-priced new machine costs around $90 and a box of gumballs (inventory) can be purchased at wholesale clubs for around $35, the machine should pay for itself and begin producing a profit within four to five months. As the machine becomes profitable (producing as much as $30 to $40 per month in profit), many business owners choose to reinvest the funds to pay for additional machines and inventory, growing the business to include additional locations.

Gumball machines designed for placement in commercial operation are highly resilient and, due to their simple mechanical operation, virtually maintenance free. Each time a gumball machine is refilled and emptied of quarters, though, basic maintenance such as cleaning the inside of the gumball dome (the clear, plastic or acryllic container where the gumballs are housed) and replacement of any faded labels or stickers should be performed. As the machine ages, some business owners choose to replace machines sporting an older appearance with newer, more modern machines; this replacement cycle is optional, however, as gumball machines are likely to provide years of trouble-free operation with only basic maintenance.

By http://www.ehow.com/