Looking for Arf advice...

Do I encourage and support my 11th graders idea of starting a vending business (i.e. pop and candy machines) or gently redirect to a smaller and less capital intensive idea?

I want to encourage a business start up as a learning experience, even if it fails

A vending business is more capital intensive for machines, requires development of location placement and ongoing servicing so a little higher barrier of entry for a teenager.

In 9th grade I told him I would help with any start up costs if he wanted to start a small business.  This was meant as an incentive and encouragement to try something, take risks and learn from it.

He does very well in school and has been researching this for awhile so it's not an idea that is temporarily passing between his ears.

What are group thoughts on a vending machine company as a first foray into small business for a teenager?

Tell that Minor to learn to code!

As a teen I worked for a vending machine company performing repairs/stocking way back in the 80s.
The biggest issue was vandals/theft, if the machine didn't have a 24/7 human over watch it was vulnerable so location is almost more important than the product .

Is he mechanical inclined, if not he better learn or people will ruin inop machines.
Machines have changed since then so he better be able to read a multi meter too.

If he isn't electronically inclined he could sub out repairs to the robotic club.

Are you a man of your word?

If he opened up a vending business in NJ there is a good chance he would get his legs broken.

I don’t see many vending machines in my area anymore.

Certainly not in places where a young person might attempt to operate.

I might be wrong, but I see this trend continuing.

Is there something specific to your area that makes it different?

Yes

Normal suburb area.

Good points I need to bring up on repair and electronics

Let him go for hit and allow him to fail or succeed on his own.

If you help with start up capital then make up an informal loan note and have him pay you back over time.  My did that for me when I started a lawn business.  Spent about $5k and a commercial mower and a trailer (in the 90s) and paid him back over 48 months iirc.

It's really important that he stays hungry on this.  You'll get a better result in the long term if he does.

It might be a shit show or he might surprise you.  Either way, sit back and let it happen.  Don't helicopter him on this one other than making sure he's not breaking laws or getting into any kind of dangerous situations.

First, he needs to figure out where he’s going to put them, and whether the owner of that spot gets a percentage.

What machines does he think he's gonna be running?  And where does he think he's gonna be putting them?
Has he done the math to figure out his profit margin per item?  How long will he have to operate, restock, and repair even 1 machine before it pays for itself?

Seems like most of them will be a kinda long ROI.  All the places that have a faster ROI like bus stations, shopping malls, and grocery stores are likely to be already taken by a machine.

And as a former parent of children that age, he’ll be flying the coop in approximately two weeks.   Do you really want another side job/hobby?

Thirty years in biz, 70 employees, avid investor for fifty years. I'd pass OP. Kudos to you for the encouragement but I honestly can't remember the last time I bought ANYTHING from a vending machine. As an investor I follow "macro" trends and vending machines are never mentioned in any of my readings.

Find other ideas and get him to compare and contrast all of them equally. He can do that. Great learning experience. Part of being a good business owner is knowing what NOT to do as well as finding the thing TO do. Have him develop a plan for what happens when his first machine/location is destroyed by vandals. MAKE HIM DO IT. Have him run an analysis of his time/fuel costs going to service the machine AND the trips to purchase refill items. Make it simple for him. $10 an hour for ANY time he spends on the biz for his time. $.50 per mile for ALL travel concerning the biz. He'll see quickly where the defect is.

Agree.  That is a top of mind concern with this.

Agree.  That is a top of mind concern with this.

Great suggestions.  Thank you.

This is the first thing thst came to mind.
Same goes for parts of California and other places in the US, or so they say.

There's a vending machine company based one county away. I've heard stories about what they do to other people's machines. Basically, if a machine isn't theirs, it's totally fucked.

Did he watch that viral TikTok video of the kid claiming he made millions of dollars or something doing vending?

Get him a pressure washer and send him out to print money from it. Maybe some ladders so he can also do gutters. And maybe his first truck too as an incentive to start. And worse case scenario is he has a truck you were probably going to buy eventually anyhow.

he'll be more successful with a Poop Scoop business in town.

less overhead
more available clients
needful service

business cards and flyers for advertising at:
Veterinary Offices
Pet Supply Stores
Email Ads with Neighborhood HOA Type message boards
etc...etc...

excellent idea- what would the commercial insurance be?

Most of the big vending services for factories and offices have converted from individual machines that require expensive skilled maintenance to the simple mini store model of take your food/drink out of a fridge or off a shelf and scan and pay for it at a kiosk. The coffee dispenser is the only thing left that occasionally jams up and that is usually something simple that can be fixed by the stocker. Of course cameras are a must to deter shoplifting.  

Stand alone vending machines out and about town are just going to get destroyed and robbed by urban youth and meth heads. Might be different in a high trust area if those even exist anymore.

The business i wish i had in college was to rent a 2 bedroom apt and stick a tanning bed in the other room. Could have made bank and known every chick on campus.

The bolded is one concern.  

The biggest question he needs to ask and answer is why is there NOT a vending machine where he would want to put one?  Is it security or risk of theft/vandalism?  Is it a competing service?  Has there been one there in the past and, if so, why was it removed?  

Most of the big guys in town have the premium spots already.  He's not going to just walk in the door and get a contract with a large company because he has a winning smile.  There are contracts involved and most places won't break the contract if there is nothing wrong with the service.   There may also be penalties involved in termination or cancellation.  

I've messed about in coin-op in the past and I am glad to have gotten out of it when I did.  It's not dead by any stretch but the traditional vending machine seems to be falling out of favor.  I would encourage him to explore other ideas because the chances of vending machines working out are slim.  He may be better off trying to place an ATM machine or two somewhere.  But those bring on a whole list of challenges too.  Security is the main one.  The initial filling of the machine is another.  

Kudos to the kid for trying to come up with a business idea.  He's got his head in the right place.  

Now THAT is a winning idea.  

I've bought several used pressure washers from a guy that does that. He rotates them out after 2 years no matter what, so they are still usable for light users. The last one I picked up from his house. He has a huge garage with several nice sports cars (Porshe, etc) in his multi-million dollar home. Seems like a good business. Looking at his business shop he runs about 15 trucks if all the bays of the shop are full.

i know a guy who does this, it's a spin off from him window washing startup.
a bucket, squeegee, jug of dawn detergent and some ladders was his initial investment.
he has car dealerships, country clubs, strip malls and private homes
sunrise to noon, then they go fishing / hunting in the afternoons.

Maybe I missed it, but have you and your son put together a business plan for this venture?

With the big expense of machines, you need to sell quite a bit to break even, plus all of your other costs.

I would avoid something with high start up cost like a vending machines

My old roommate did this after college and his dad helped with start up costs. He went with higher end machines with coolers and stuff.  

He did ok and made some money, but was constantly running around filling them etc.. basically a full time job.  He ended up buying most things from Sams club as distributor was similar cost

He did have trouble getting the machines in places.  Something to consider if you don't know people to get the machines in decent places.  You also usually have to give a cut to the location

He did get lucky and got into a private boarding school with a couple machines.  Those made bank from the rich kids and premium options and the rest varied depending on location.  He eventually got out of the business and sold everything for way less than he bought it for

If you do move forward i would recommend a few things

1. Make him write a business plan- this will prove he is invested and everything is thought through
2. Do some scouting for locations and talk to people about possibility of getting machines in the location.  Most good locations will already have them- would they be willing to switch for better terms etc
3. Try to come up with a different concept than everyone else.  Like offering protein bars and healthier foods along with the standard fair.  Unique choices may drive some business

I love the support and idea, i just think something on a smaller scale for less startup is a better option as a 1st business for a teenager

Something like car detailing comes to mind.  You could buy him some decent equipment-steamer etc and have him make a website, google places, and facebook page for advertising.  You can even do mobile detailing etc... Just an idea, but scan the market for a lacking service or product and go from there

This.  Needs a business plan, and to talk to property owners becore investing in equipment.

If he want's to follow in the footsteps of the vending guy who is popular on fb last week (timing sounds very coincidental), the best places would be schools and large employers.  He'd have to some big undercutting/profit sharing/lease deals for those prime spots though.

I had a similar deal with one of my nieces about 8 years ago, and we setup a vending route that she was able to take over. Here are my takes….

1) start small- we did quarter coin machines. They were much cheaper to purchase, and simple to repair/maintain. They also brought in good revenue. Many locations would take two machines, one for candy and one for Gumballs. Mike and ikes seemed to be the magic candy for our area. We started with four, and ended with roughly 20.

2) buy in bulk- a Gumball at the time cost less than a penny, and sold for .25 which is a hell of a return. I set the candy machines to give a generous portion of Mike and ikes, and still was at roughly .02 of product. Buying in bulk kept cost low, and made a fantastic return.

3) Locations- I placed my machines in local businesses that would either see tons of kids( think clothing/toy exchange stores), waiting areas (oil and lube places/mechanic shops), and places with walk up counters (plumbing/auto supply stores, construction material etc.) These did the best, as those using cash would put their change in the machine often, or kids would nag their parents until they give them a quarter or two. I also tried to place them in clusters, to keep the time driving from machine to machine a minimum.
I DID NOT PAY A SINGLE LOCATION FOR MACHINE PLACEMENT!
When placing a machine, I would get business cards from the business, and place it on three or four other machines that were placed in dissimilar businesses. They got free advertising, and I got free machine placement.

4) Servicing- this took the longest to figure out. We started in a weekly service, but that was to soon. The good ones needed service every two weeks, the lesser ones monthly. I would collect change, refill with candy, and clean the machine until it was spotless. All the machines looked new, and if they did not they were pulled from service for repaint or repair.  No one wants to buy candy that looks a year old, in a machine that looks like shit. Also insure the business owner has your number  in case a problem arises.

All in all, machines averaged about $25 a month/machine. Some do better some do worse. Low performers we moved occasionally, but it’s better to have it out bringing something, instead of in the garage bringing nothing. Service time was probably 2.5 hours a month for the 20 machines. She was able to take it over and handle it no problem, and eventually handed it down to another young girl when she grew up and moved away.

I’d start here, and if he can keep it up evaluate if you want to get into priced machines!

I'm way late to this but wanted to say, COOL!  Good learning experience about the very basics of business for a kid.  Figuring out then making a plan to refill, service, and perhaps repair.  Good stuff.

A clean well kept machine definitely gives the impression that the product is fresh too (even if it isn't), nicely done.

I have had Youtube videos pop up in my suggestions about vending machines with a guy who makes it sound like free money. I am guessing that the easy money spots are mostly taken.

Good luck with the business! Hope everything will work out for him.
From my short business experience, microsoft teams calling  is the best when it comes to the communication with the clients.
It is much more effective than all the other channels, like emails , letters or such a popular cold calls. Not many people are open for such a conversations these days.

I saw this one when I was working a construction job in midtown Atlanta.  About every 15 or 20 minutes, this pretty girl would walk by with a dog.  But it was a different dog every time.  From about 9am till 4pm, which was when I left.  I initially thought, damn she’s got a lot of dogs!  I talked to her later on and she was a dog walker that stayed extremely busy.  She charged in 15 minute increments and she did very well. Some customers wanted their dogs walked twice a day.  No overhead and some doggie poop bags and you’re in business.  This was in an area with multi story apt/condos where all her customers were concentrated.  So no drive time or minimal time  between customers.  Just thought I’d throw that out.  For someone in school with an inflexible schedule, I don’t see this working unless you do it on weekends or coordinate with someone else to share duties.

ETA: this has nothing to do with vending machines.

My grandfather started the largest vending machine company (in 1980’s/1990’s) in the southwest a long time ago…Western Vending. I didn’t work for him but i did help when i had free time during high school. Let me tell you, just restocking the dang things took all day. I couldn’t imagine stocking, maintenance, money collection, etc.  But then again, he had hundreds if not thousands of machines.  

I think a small group of machines would be manageable, but would it make money? Not sure. I wish I could give some insight to help.

Starting a vending business can be a great learning experience, even if there are some challenges. Your 11th grader seems pretty committed and has been doing the homework, so that's a good sign.Considering the capital and ongoing maintenance involved, it might be worth exploring some alternatives too. Maybe check out this link: https://connectvending.co.uk/vending-machines/ for some insights on different vending machines. It could help weigh the pros and cons and make an informed decision.

You may laugh, but my youngest taught himself to code in high school and developed an app that brings in about $1,500 a month (and steadily growing) for 1 - 2 hours of work monthly.

He also has a job.  The app is just gravy, and should continue to grow for the foreseeable future.

Edit to add:  The app has been on line for about 3-1/2 years now.  In the first six months it grew to about $500 a month, and it has steadily crept up since then.

This was his second app.  The first was planned to be an improvement over an existing commercial app, but after he worked on it for over a year, the original app rolled out an upgrade that incorporated virtually everything he was doing to improve it.  (sad trombone noise)

I have two thoughts on this.

1) low risk / high reward initial action would be to get a job at vending business where he can get an inside view of the environment wo expenditure. Early life work is primarily to learn, with a view towards $$$ later as the end game.

2) real money is supply / demand so on that note is he creative? Anybody can vend snickers and root beer. Is there something unique with high demand he can come up with? Even study marketing and IP perhaps copyright a new product and/or packaging? What do his friends buy that aren't normally in vending machines? Etc.

I would definitely encourage creativity on his part--it's a learned skill for some but too if he's gifted enough to be being "pulled towards" vending business so young What else is he capable of? I admire his drive and I'd reinforce to him there are basically no limits to what he can do.