Vending machines are rapidly disappearing from many locations, and micro-markets are taking their place. A micro-market is essentially a mini convenience store in an office break room, hotel lobby, hospital lobby, etc. and carries a much larger selection of food and beverage products than a vending machine, including many fresh and healthy options. And the products are attractively merchandised to make the micro-market more inviting to shoppers. Studies have shown that an office break room with a micro-market significantly improves employee productivity and morale, and a hotel lobby with an attractive, well-stocked, self-checkout market greatly improves guest satisfaction.

Now is a great time to start a micro-market business. The COVID-19 pandemic significantly changed how office goers got their meals and snacks when “stranger danger” kept them away from restaurants, and how hotel guests got their snacks and beverages when hotel restaurants remained closed.

A pure micro-market business has these advantages over a traditional vending business:

  1. Less capital intensive – no expensive vending machines to purchase & maintain
  2. More flexible – products can be easily swapped in and out based on what is selling at a particular location, without having to worry about a vending machine’s limited available slots and their fixed sizes

Here are the 9 steps you need to take to start your own micro-market business:

  1. Set up your company
    • Choose an appropriate and preferably descriptive name for your company, so the name itself conveys what kind of business you are
    • An LLC is the most popular entity for a micro-market business – it can be set up in a matter of minutes at LegalZoom, or you can have a local attorney or CPA set one up for you
  2. Create your master product catalog
    • A differentiated catalog will help you position your micro-market as a premium offering when compared to vending machines, so you can charge premium prices
    • Include a good selection of fresh and healthy food, in addition to popular snacks and drinks
    • Plan your catalog carefully, because it will define your investment in shelves, coolers and freezers
  3. Create sub-catalogs for different-sized locations
    • Start with 3 simple sizes: small (<50 employees or hotel rooms), medium (50-100 employees or hotel rooms), and large (>100 employees or hotel rooms)
    • Decide how many and which products from your master catalog will be in each sub-catalog
    • Identify how many shelves, coolers and freezers will be needed at each location size
  4. Pick your equipment suppliers
    • Find a local supplier for commercial-grade coolers – small coolers can be purchased at appliance stores when you are starting out
    • Find a local supplier for shelves – easy-to-assemble ones can be purchased at IKEA and other furniture stores when you are starting out
  5. Pick your product suppliers
    • Purchase popular snacks & drinks from distributors like Vistar
    • Purchase popular regional products at local wholesalers
    • Find a reliable fresh food supplier – the key word here is “reliable”, since fresh and healthy food is what truly differentiates a micro-market from a vending machine in offices
  6. Pick your micro-market system
    • This end-to-end system enables you to manage inventory, and enables shoppers to purchase products at the micro-markets
    • Depending on the characteristics of a particular customer location, you may need to deploy a kiosk-based system (hotels, or if the office location has lots of visitors) or simply use a smartphone-app-based system (smaller office locations)
  7. Identify your target customers
    • Larger vending operators tend to prefer larger customer locations, thus opening up opportunities for new operators in medium & small locations
    • Target one of more types of small/medium locations that currently only have vending machines – e.g. hotels, multi-tenant office buildings, medical office buildings, small & startup businesses
  8. Create a sales & marketing plan
    • Create a brand for your micro-market offering – name (including domain name), logo, who you are, why you are different, etc.
    • Set up your website, and add your business to Google, Yelp, and other listing services (We have partnered with The SMB Hub to help you with this)
    • Create your marketing assets – business cards, flyers, brochures, etc.
    • How will you reach potential customers? Social media, search, email, snail mail, etc. (We have partnered with The SMB Hub to help you with this)
    • How will you sell to prospective customers? Special offers/incentives, product prices, product variety, service commitments, etc.
  9. Start & grow your operation
    • Start with 1-2 small locations, until you grasp the operational aspects of the business
    • Analyze your costs for each market – equipment cost, product cost, delivery and stocking personnel cost (even if it’s only you for now), drive time to and from market location, shrinkage/theft, spoilage, etc.
    • Scale to additional small locations, then expand into medium ones, and then large ones – the operational aspects and costs will be very different for each location size, especially with fresh food

We are looking for motivated operators in smaller cities across the US to set up & run GrabScanGo hotel lobby markets. Contact us if you are interested in learning more.

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