Despite the current situation and the impact of COVID-19, there is still reason to be optimistic about the future of vending and OCS. That reason is technology. Software platforms are popping up all over to help make operations more efficient, leading to better customer experiences.
But don’t just take it from us.
This article makes clear that adding technology to your operations increases value:
“For years and years, there was limited interest from private equity, or what we would traditionally call financial buyers, because our industry was seen as stagnant, capital intensive, and generally lacking any technology to make it more scalable.” – Mike Kelner
There’s some hard truth here. For quite some time, vending machines–and OCS by extension–were pretty much the same as they’d always been.
While other industries seemed to carry on and progress as new technology became available, not much changed in convenience services. Vending machines remained the same and the coffee in the kitchen remained stale.
But that’s all changed. New technology of various kinds is now available to operators, providing a variety of solutions:
- VMS
- Micro-market/kiosk
- Better coffee options
- Mobile payment options
- Online ordering
All these platforms help make operating a convenience service business easier, more efficient, and–as Mike Kelner pointed out–scalable.
This is hugely important for a couple of reasons. First, it makes it more attractive for those private equity firms seeking new investments if and when you might consider selling your business. Second, and perhaps more importantly, the increased value added by scalable technology is better for your succession plans.
If your intention with your company is to pass it down to a family member, wouldn’t you rather hand them something of value?
What does it mean to ‘scale’ your business?
In short, it means growing without increasing costs. Scaling happens when you increase revenue without taking on significant operational costs.
Contrast that with growth, which is typically described as increasing revenue while incurring more expenses (i.e. more employees and other overhead costs), which would be the ‘capital intensive’ part of what Mr. Kelner mentioned above.
With the right software tools in place, however, operators can take on more customers without increasing a ton more costs in resources to service them. You become scalable.
How software makes your business scalable
Different platforms help in different ways.
For example, vending management software can organize and streamline routes, saving drivers time and effort. Cashless options make it easier to manage revenue. When it comes to delivery services, an online ordering option helps reduce time spent on managing orders so you can focus more on ‘white glove’ accounts.
Looking at it this way, you can begin to see how each solution allows for less employees/effort while serving more customers. This is what scalable looks like in convenience services.
It’s essential that the solutions you choose are able to scale alongside your company. In other words, when evaluating software it’s important to ensure it has the flexibility within the platform itself to expand as your company expands. The last thing you want is to invest in technology only to find out it can only do so much up to a certain point.