Vending machines are a staple in American culture. We depend on them to carry us over to our next meal (or on some days they replace our meals) in our office, the mall, schools, even the laundromat. When you walk up to the machine put in your money and hit D7, it’s still exciting to watch as the mechanics get to work and your snack falls out. Do you ever think about who decides what goes in the machine or who puts the snacks there? Probably not. That’s why we wanted to share this special customer success story with you.
Cal Miller, owner of CNS Vending, is native of Arizona with a background in architecture computer drafting. Not the guy you think of when you imagine the owner of a vending machine company, but that’s exactly who he is. When the recession hit, Cal had to latch onto something and so what many people do when you can’t get work you start your own business. “I was fortunate enough to work for someone who owned a vending route in Arizona and I did that for about a year or so. He didn’t live locally and he offered to sell the business to me.” That was in 2010. “I am not an entrepreneurial guru, I’m just doing the best I can to run and grow my business successfully to take care of the family.”
Ariele Krantzow, OnDeck: What do you wish you knew before you bought your business?
Cal Miller, CNS Vending: I wish I knew more about where to find new customers – customer for vendors are different that customers for a grocery store and it’s kind of tricky. I’ve learned more about that since, but it was hard at the beginning – how to expand and where to find your customers.
AK: How did you start marketing your product/service?
CM: My marketing is practically non-existent. Most of my business is from word of mouth. I did get some freebees from existing contacts in the vending industry and the local community. In the vending business it’s not so much how many locations you have it’s about securing the right location, with the right traffic, and the volume of sales from the machine. It’s a lot of networking with local businesses and talking with people in HR departments of local companies.
AK: What are the differences between your two main client types (local businesses and corporates) that influence how you run your business (ie, payment cycles, product types)?
CM: An employee based location is extremely different than a public space. My biggest client is a laundromat chain, I take care of his stores and you can put anything in the machines because it’s a public location. In an office it’s different, for example, there is an aerospace manufacturer by the airport and that’s a typical office using the same machine and reaching the same people, so I need to put in specific things.
AK: What are the most popular items in your vending machines?
CM: The most popular items in the laundromats are anything hot and spicy; Cheetos or hot limon flavors. In employee based locations, it’s more Ruffles, Doritis, and beef jerky.
AK: What metrics do you look at to assess your business growth? How often do you look at these numbers?
CM: One thing I was able to do with the loan from OnDeck was install card readers on all my machines. The company had a software platform that gives me all the sales metrics. Before I used this service, it was extremely time consuming to track sales and metrics because every machine needed to be evaluated manually. Now, the system keeps track of all the money etc. and I can go back and see over the last 3 months how each machine is doing individually and collectively, which it helps making decisions easier.
AK: What was it like looking for financing as a small business owner? What sources of capital did you look into?
CM: Capital is always a problem, before I got funding I needed to save up to make a big purchase or I would have to make a decision to go without something that could help my business. I just didn’t know where to go. When I wanted to grow, getting financing was a necessity.
Before I came to OnDeck, I talked to my banker. When you go to bank if you’re small or a huge corporation they treat you the same. Their requirements just don’t work for a two-man operation. The bank needed so much paper work I said “oh brother”. It was so overwhelming I just stopped. When I talked to OnDeck it was fairly straightforward.
Since I was a new business and it didn’t have any established credit on its own, the only credit I thought I could get was under personal loan. When I spoke with my loan advisor at OnDeck, he suggested a credit line would regularly report to the credit bureaus under the business name so I could build my business credit. I liked the idea and I’ve used that line of credit to carry me through.
AK: What did you like about OnDeck that made you choose us?
CM: I like the weekly payments because I can pay the loan down really quickly without it being a drain on the business. The fact that it’s building up the credit is really nice. Now, I could qualify for a loan when I need to.
AK: How has OnDeck helped your business grow? ROI, hires, top/bottom line increases, new clients?
CM: Now that I have access to funds regularly, I can upgrade my machines, buy new machines for new locations and it’s taken the pressure off how to work around obstacles and issues.
AK: What are you most excited about when thinking about the future of your business?
CM: I’m hopeful that I can grow it to where it takes care of my family and I would love for the business to be big enough where my wife would be able to work with me instead of at her current job. Maybe 1-2 employees but nothing too big. I’ve been able to win some clients over from the big vending companies because I have quality customer service. For smaller locations, that’s a big perk because they usually get ignored by the big vending companies.