Newbie hits $30K exit after 4 months...

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No one is going to buy a business based on your Personal Brand, but they will buy a boring business.

Welcome to another issue of Passionate Income.

Today, we’ll be discussing how a beginner entrepreneur launched a boring business and sold it for $30,000 just one month after it started making profit.

Let’s dive in.

In an era where everyone and their dog is teaching you how to start an agency, I love experts who go against the grain. In particular, ones who teach offline business models. Things like how to start and scale a pressure watching, or storage, or a vending machine business.

So when I saw a tweet about a beginning entrepreneur who exited a boring business for $30,000 just four months after starting it - and one month after it started generating revenue - I just had to know more.

Here’s what I found out.

The tweet I saw (below) was from an X account (MrPassive_) regarding how one of his students started a sold a vending machine biz after just 120 days.

Here’s the timeline his student followed leading up to his exit:

✅ Step 1 - Committed to the business model in June of 2023

✅ Step 2 - Began cold calling to find a high foot traffic business that would let him place his vending machine on-site (July most likely)

✅ Step 3 - Got first client (August)

✅ Step 4 - Placed the vending machine (late August most likey)

✅ Step 5 - Vending machine does $2,300 in revenue in September

✅ Step 6 - Student sells the business for a 13x multiple of monthly revenue ($30,000 USD)

Not bad for his first four months in business. Especially considering his “company” only had one month of revenue on the books.

So the question is: How?

How did he start a vending machine business and how can YOU do the same?

🛠️ The How

While I can’t teach you every single nuance on the planet about how to launch and operate a business in one short email, here’s the 40,000 foot summary:

✅ Phase One - Research and Planning

Research the industry, identify high foot-traffic locations where you could place your vending machine, and run some hypothetical financial numbers.

✅ Phase Two - Get Capital for Startup Expenses 

Initial expenses include purchasing vending machines, inventory (candy, sodas, etc.), and obtaining any relevant licenses and permits. A new machine can cost anywhere from a few hundred to several thousand dollars, depending on the type and features. Last, include transportation fees involved in moving the machine to the business’ location and relevant insurance fees.

✅ Phase Three - Study Revenue Sharing

Business owners aren’t just going to let you put a machine on their property for free (in most cases at least). Instead, you will likely need to pay them a monthly fee OR a percentage of revenue. Mentally prepare for that conversation, and emphasize the non-financial benefits of having a vending machine on their premises (convenience, customer satisfaction, etc.).

✅ Phase Four - Securing High Foot Traffic Locations

If you want your machine to generate profit, you must Identify businesses with high foot traffic (e.g. pizza parlors, strip malls, school stadiums, etc). Many of these places will have already been approached and potentially have machines already, so build a large list of potential candidates.

✅ Phase Five - Get Your First Partner

Once you identify some good candidates, start contacting decision makers with your proposal. Focus your outreach on the mutual benefits and revenue potential. Expect to network and do cold outreach. And if you hit a wall ,consider using a vending machine placement service.*

*This is the part where most people give up given there’s rejection involved in cold contacting businesses. Don’t make this mistake!

✅ Phase Six - Ongoing Maintenance

Once you get a partner and your machine is making sales, you’ll have to stop by every now and then to replenish inventory. This is a great time to identify bestsellers (and stock more of them) and duds (which you should take out, creating space to test something new). Last, make sure to track your expenses as it relates to replenishing stock. That way your profit numbers stay accurate.

✅ Phase Seven - Exit and Ball the F*** Out

Last, sell your vending machine business for a huge sum of money (at which point your family will believe you’ve been laundering money for the cartel). Such is the price of success!

📈 The Math

Per the example from MrPassive’s tweet, his student was able to sell his vending machine business for 1.1x Annual Revenue (13x Monthly).

Meaning, with one machine doing $1,000 per month at one location, you could sell the business for $13,000. And with two machines doing $2,000 each at two different locations, you could sell the business for $52,000.

Meaning, to understand your “rapid exit” valuation, just take the monthly revenue your machines are making and multiply that number by 13.

I'll leave you with this quote…

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