If you are working a full-time job but want to start a business, investing in a passive income startup is a good option. Passive income is income that can be sustained with little effort. It is usually acquired through a side business that requires little attention and has low-maintenance costs. Michael Hoffmann, the co-founder of Passivepreneurs, a passive income consultancy that helps individuals generate lucrative streams and attain financial freedom, believes that one of the best passive income startups today is vending machines.
A common misconception about passive income startups, according to Hoffman, is the idea that one needs to spend more time on the business to have it take off in the beginning. The startup, supposedly passive in nature, becomes a full-time job on top of the day job that one must sustain during the early phase. This eventually causes burnout and promotes a pungent sense of failure. Instead of investing time and attention, Hoffmann suggests that one should earn with their mind. Coming up with efficient ways of streamlining activity and profits is what will help the passive business thrive.
This is especially true for vending machines. There are a few markers of a successful vending installation – including the traffic that the site receives, the type of products stocked, and the profit margins on those products. As a passive income startup, it does not require hands-on presence, but only ways of making the machine more attractive and central to the daily lives of the people in the area.
One must keep in mind some tips when embarking on a vending venture. Hoffman’s 3-pointer rule is based on his own vending startups and as well his clients’ experiences. Firstly, make sure that the machine you buy is in solid condition. Due diligence can be the factor that decides the amount you rein in monthly, and the projected growth of your business. An important reason why vending is a good investment option is its low risk and maintenance costs, but that will only be the case if the machine is in good working condition.
Once the machine has been installed, your only job as the owner is to make sure the response is optimal. If the location does not seem like a great choice, don’t hesitate to switch it. More often than not, when you talk to the authorities about pulling out, they market your vending so as to get more people to use it and that can be a good technique to ensure sustained revenue.
Additionally, it is equally important to be smart about the products you stock. Two things to consider are its popularity/demand and profit margins. Hoffmann uses the example of a 16 oz bottled water and DrPepper can. While both have a profit margin of 65%, DrPepper brings in more money because it sells for more.
On the whole, vending business is a great choice for investing in a startup. It has the potential to grow into a multiple-route business in less than two years, requires little to no maintenance, and the risk is minimal. Hoffmann has coached over 9 passive income startups with successful vending routes all over California, Hawaii, and North Carolina, and believes that it is one of the strongest options in the market today.