Anyone who has talked to me about selling their business or if you just read my newsletter and articles, you know how I feel about preparing a business for sale. Sometimes, the best way to prepare is to pay attention to industry data and trends, which can unlock strategies to get the best possible price for your business. The new State of the Industry Report offers plenty of useful information.
The report alone does not really contain hidden gems. There's always a little confusion in the data. Are we talking about micro markets or vending? Because of the timeline of the survey, this year's report does not cover the hottest new aspect of the industry - smart markets. The webinar on July 15th, presented by Automatic Merchandiser, which took a deeper dive into the true state of the vending and micro market industry, provided some useful insights that any operator can use to position their business for sale.
The survey looks at the 12 months ending Q1 2025.
Looking at the data - it's no surprise, but it is impactful - the vending and micro market portion of the industry is exploding from a revenue standpoint. $21.7 billion in 2022, $26 billion in 2023 and in the most recent period - a stunning jump to $33.85 billion.
What is the insight for operators who are thinking about selling their business? I believe things are starting to look like 2017, 2018 and 2019 - a great time to sell. Will sales jump again? The economy is slowing, job growth is slowing, back to office is happening, but working moms are leaving the workforce. So many factors are in play - between tariffs, inflation and consumers losing confidence in the economy, you need a crystal ball to know what is ahead. One thing is certain - because of the current numbers, multiples have never been higher. Bottom line - especially if you want to mitigate risk - It is a great time to sell your business and VBB Advisors, the industry's #1 sell side broker is ready to help you make deal you have been dreaming about.
Did you miss out in 2017 to 2019?
Maybe you missed out and decided to keep your business in 2017 - 2019, only to get hammered in 2020 and 2021. The good news, according to the state of the industry report, buyers are active and hungry. As the report indicates, there was an increase in the number of companies that made an acquisition in the current period and the industry revenue picture reflects the consolidation. 65% of the revenue is generated by 10% of the industry.
What is the insight for operators who are thinking about selling their business? I don't need the state of the industry report to tell you that there are plenty of active buyers out there. There is a significant amount of money on the sidelines right now looking for a destination. Bottom line: In this type of market condition, multiple offers are the norm, but only for operators who know how to position their company in advance, market their company properly and present their company to the a wide variety of well capitalized buyers. As the industry's leading sell side broker, VBB Advisors can make that happen for you.
Opportunity in alternative locations
Finding a new revenue channel in an established industry is a blessing and it translates to a nice boost in the value of a company. While the state of the industry report did not address hotels, residential and previously untouchable public locations, the webinar offered a fresh discussion on the opportunity. "We've had success with micro markets in residential and apartments, but it didn't take off as much because of the theft discussion. Same with fitness centers and gyms," said Tony Danna of Cantaloupe, who went on to explain that smart markets are changing everything and he offered case studies to prove it.
Danna pointed to a fitness center selling energy drinks, water and protein bars out of a smart cooler, generating around $3100 a month with no theft issue. "That's a 12 month ROI," he said. After being required to remove a micro market from a Fed Ex location due to ongoing theft issues, a smart market installation yielded staggering results. "To say they are doing well in sales is probably the biggest understatement I could say. This unit is doing about $663 per day in sales, 4800 transactions, average transactions of $4.12. Total revenue last month was just under $20,000. That is a heck of a micro market out there."
What is the insight for operators who are thinking about selling their business? Smart markets are the next big thing. Keep in mind, there were 28 smart markets on display at the NAMA Show in May. Bottom line: Even if you only plan to stay in the business for a year or two more before you reach out to me to find you multiple buyers, smart markets are a great investment - in the right locations. Car dealerships, health clubs, entertainment venues, distribution centers - all of the locations where a traditional micro market will not work - smart markets will elevate the value of your business.
Are you ready to take that critical first step? That is often the toughest one to take.
Order my free 2025 Exit Strategy Planner. At the very least, it will provoke some thought, and this is a good time to think about your future.
Whatever your reasons are to sell your company - the timing, a sense of frustration, the desire to enjoy life or an interest in rewarding yourself for years of hard work – VBB Advisors can help you realize your goals.
I am Mike Kelner, the leading sell side intermediary in the convenience services industry. Let’s sit down and have a conversation. Use this appointment scheduler to set up a meeting with me.
Or – give me a call at 704-942-4621
