Financial Management in Vending

With costs increasing and new accounts still hard to find, it behooves vending operators to bone up on financial management. Small vending operators usually don’t pay a lot of attention to financial management. They believe that if they are covering their costs and making a decent profit, they are doing well.

Business conditions can change unexpectedly, and an operator who doesn’t have good financial benchmarks is at risk of not grasping the impact of the changing conditions. Antares operators need to understand that keeping a business in good financial health requires staying regularly on top of several factors.

Most companies have a profit and loss (P&L) statement, which measures the profitability of the company. This is how the profitability of some Antares vending companies is measured. It begins with the company’s gross sales for a finite period of time, and then shows all of the operating costs, including product costs. The operating costs are then subtracted from the gross sales, giving the net profit for the business.

Operators need financial benchmarks

How does an Antares operator get to know if his costs are out of whack? Fortunately, there is a set of industry averages available, the National Automatic Merchandising Association’s Operating Ratio Report. This report is conducted annually and is designed to provide comprehensive, yet straightforward guidelines for analyzing profitability. The report summarizes key financial ratios in managing a vending business. The basic elements of financial management in any business are financial operating ratios.

Ratios give perspective

If you have had a bad year, it may not be as bad as it seems, once the financial ratios are reviewed. At the same time, even in the best of times, operators can find themselves unable to meet their payroll if they fail to pay careful attention to these fundamentals. For the successful running of your Antares Corp. vending operation, you will need to pay attention to these fundamentals.

This report evaluates a variety of operating ratios across the industry and then compares the typical NAMA member’s figures against the industry’s top performers to help pinpoint areas that could be improved to increase profitability.

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