Water: we all need it and use it for many purposes. The same goes for its frozen counterpart.
In the 1800s, people used ice to keep their meat and other perishable goods cold. But getting enough ice was a pain in the ass for most.
The solution?
Ice harvesters cut huge chunks out of lakes and ponds in New England to ship elsewhere. These harvesters had to haul these extremely heavy blocks out of the lake and into transport.
We live in a magical age, friends. People still use ice all the time, but it’s a hell of a lot easier to distribute it. Plus, there’s no risk of falling into a freezing lake to get it.
It sounds almost too good to be true, but you could cash in by chilling out with an ice vending business.
Starting an ice vending business is one way to break in. But the best way to get started is by buying someone else’s already-running ice machine company.
Understanding the Ice Vending Business
An automated, shockingly simple idea could become your next boring business!
Just like soda or candy vending machines, ice vending machines allow someone to swipe their card, choose which size they want, and walk away with the filled bag of ice.
Perfect for barbecues and parties, fishing, camping, and so much more, these grab-and-go ice bags are a blissfully simple moneymaker.
But there’s no free lunch in the world of business. You do need the following things to start:
- An ice machine
- A site to place it
- Water/electric hookups
Four big benefits to becoming an ice queen or king:
- The cost of goods is low–like, really low: expect to pay $.10-.25 per bag in costs
- Low barriers to entry with no special training needed
- It’s a high-margin, low-people business (read: low overhead)
- You can finance the machine through an equipment loan
A couple of risks or challenges to be aware of:
- The machines aren’t cheap (but they are easy to finance)
- Seasonal issues (ice is in low demand during the winter)
- You need to find a good space to rent with at least 10k/cars driving by a day
- You need to find someone who will service your machine
Buying an existing business means someone else already accounted for the last 3 risks.
You’ll be able to buy into an operation that’s in a good location, knows how to account for seasonality, and has service handled. And, if you go the seller financing route, you’ll have a solid path to paying off the previous owner with the profits from your new business.
Case Study: How Brett Retired Early with a $71K/Year Ice Vending Business
Brett’s a former tradesman who wanted a new way to make money. So he set up an ice vending machine near his home, generating $71,000 a year doing it.
Wait, what? $71k from frozen water?
Yep. Here’s how:
Outside of the initial equipment, startup costs and operational expenses are really low for an ice vending business.
Capitalizing on someone else’s foot traffic, Brett scoped out locations to place his machines.
Let’s break down some of that math:
- He sells around 900 bags a month at $1.50/bag
- He pays about $.25/gallon for water
- He also pays about $.25 per 100 bags of ice for electricity and water
That’s revenue of $1350/month with minimal expenses. Okay, not enough for most to retire on, but a solid ice side hustle.
Once you set up one machine like Brett, it’s too easy to add a few more to get more revenue.
Oh, and there’s this huge bonus: no employees needed. That’s an entire chunk of most businesses’ overhead that you won’t need to worry about.
You can be like Brett and start from scratch.
But we recommend you do one better and buy an established ice vending company.
Why? You can get started for less with seller financing. And you can find businesses with more than one machine (more machines = maximizing your revenue) instead of starting with a single location.
But if you’re really convinced that starting up from ground zero is best for you, follow these 6 steps:
- Create your business plan
- Choose the perfect location
- Select the right equipment
- Get permits and licenses in order
- Set up your location
- Manage and scale
1. Create Your Business Plan
A business plan serves as your formal roadmap for how you’ll succeed. It lays out your target market and location, budget and necessary startup costs, and your marketing plan.
If you need investors or a business loan to start, this plan is crucial since it shows you’ve done your homework.
Even if you don’t need outside funds, a business plan helps you outline core components of your launch and operations. And you’ll need it if you want to get a machine from a franchise ice machine manufacturer.
Spend plenty of time outlining your budget for your ice vending machine business. It should include:
- Whether you’ll buy or rent the land for your machine
- How you’ll acquire your machine (like financing or an equipment loan)
- Other initial investments required
- Ongoing operational costs (such as maintenance and utilities)
You can use cash, business credit cards, or business loans to help you get the startup capital you need.
You’ll need a business plan whether you plan on building from the ground up or buying an established business. The difference is a business plan for buying an existing business is more focused on expanding revenue. The plan for starting one is all about just getting on your feet.
2. Choose the Perfect Location
Volume is vital for an ice vending business. Aim to park your machine in an area with at least 10,000 cars passing by per day.
If you place your machine near an area where it’s convenient or already associated with running errands, you may boost your profits. Think places like:
- Gas stations
- Car washes
- Grocery stores
Putting your machine on the way to and from popular recreation areas, like a state park, is another potential idea. But that could limit your sales during off-peak seasons.
Don’t forget overall access to the machine itself. As you scope areas, answer these questions:
- Is there high-level visibility for the machine from street level?
- Are there any competitors (including any other ice suppliers like an in-store ice box at a grocery) nearby?
- Do you also have the space to put up parking barriers or spaces around the machine?
- Do you have ingress and egress (AKA, can people easily get into and out of the area?)
- Is the area where the machine will go well-lit?
Scouting the perfect area will take you a lot of time. Then you have the headache of negotiating the price to buy or lease the land.
Those are things you won’t need to worry about when you buy an ice business. The previous owner already found a good location for you. And, if they don’t own the land outright, then they’ve already got a leasing agreement in place with the landowner.
3. Selecting the Right Equipment
Buying or leasing a branded or franchised machine for your vending business is the way to go here.
When you get the machine from an established company, you can get them to take care of maintenance for you. It’s in their interest to keep the equipment with their name on it in good shape, and it’s less hassle for you.
The last thing you want is to drive around in blazing summer heat trying to repair or clean these machines. So, while an unbranded machine is technically an option, it’s almost always the inferior choice.
There are a few big names in the market for branded ice vending machines, like:
Ice machines cost anywhere from $20,000-100,000, depending on your model.
That sounds like a steep buy-in, but you can finance it using an equipment loan or through one of the manufacturers.
If you’re selling ice from your machine at the same rate and price as Brett, your estimated numbers with one of these machines could look something like this:
- $300/month payment on equipment
- $300/month in land rent
- $200/month in maintenance/utilities/permits
You could break even at just 14 or 15 bags a day!
There’s still a distinct advantage to buying an established ice machine business here, too.
You can increase your revenue by buying out an owner with more than one machine. And you can negotiate seller financing terms that are more favorable than financing through the manufacturer.
4. Get Your Permits and Business Registration in Order
It’s not sexy to talk about permits and licenses, but it’s well worth doing the research to avoid problems down the road.
Contact your local business licensing office to find out what applies. Requirements vary from city to city and state to state, but doing your due diligence is important.
In general, you need a business license and business registration. These will also help you look much more professional when scouting out and pitching landowners for your locations.
FDA regulations state that you must handle and manage ice as if it’s food. For an ice vending business, that usually means complying with the manufacturer’s recommended cleaning schedule.
An existing business already has its registration and permits in order. And a good one will have procedures in place to treat ice like food. Buying one of these businesses means you’ll be able to work through this step far faster than starting fresh.
5. Set Up Your Location
Mark out where you’ll place the machine in advance so you can ensure it makes sense to drive cars up to and away from it. When install day comes, this makes your life much easier for putting the machine in the perfect location.
If the place you’re buying the machine from doesn’t cover it, include install costs in your business plan budget section.
You may need to hire a contractor to install the machine, hook up electricity, and connect the water lines. Thankfully, most companies that sell you the machine include installation.
Buying a business bypasses the setup and installation process.
You won’t need to worry about installation costs. Or the contractor’s fees. Or the risk of something going wrong and delaying you from selling ice to customers.
6. Manage and Scale Your Ice Machine Empire
One major challenge for plenty of businesses? Hiring, training, and managing the staff to do the day-to-day work.
That’s not an issue with an ice vending business.
If you get a maintenance contract with your machine supplier, you don’t even have to fix it yourself.
You can run this business in as few as two hours per week, which makes it ideal to scale with other locations. Connect your water properly, keep the plastic bags stocked, and you’re pretty much set.
With no staff involved, you can easily run this business with multiple locations in your area entirely on your own.
Some machines come with pre-installed software that lets you know when there’s an issue, too, so you can run this truly hands-off.
There’s very little marketing needed for an ice vending business if you place the machine in a good location to start with. That’s yet another place where you can keep your operational costs low.
From Idea to Igloo: Start Your Ice Vending Business Now
Too many aspiring entrepreneurs overlook boring businesses. But some of them are no-brainers if you want a diversified portfolio or a very basic, no-workers-needed passive income model.
While every business requires some upfront and ongoing work, an ice vending business requires very little of both.
The hardest things about it include finding a machine and a good location. Both of which you can bypass when you purchase an existing ice machine business. From there, ice pretty much sells itself.
