THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, May 6, 1996 TAG: 9605040281
SECTION: BUSINESS WEEKLY PAGE: 05 EDITION: FINAL
SOURCE: BUSINESS WEEKLY
LENGTH: Medium: 52 lines
It was in bold type last week in the classified ads, under the section heading Wanted to Borrow. It minced no words.
``Investment angel needed,'' said the ad, ``Need $70,000 to expand existing business of 5 1/2 years.'' It gave a Suffolk number.
Another struggling small business? Hardly. Ever wonder about operating your own soft drink vending route? Then listen to Butch Broadbent. He and his wife, Deborah, placed the ad.
``We're getting all kinds of calls,'' he said. ``Most of the calls we're getting, they're not investors, but they know investors.''
What the Broadbents have in mind follows the simple rule of it takes money to make money. In their case, they want to borrow the money and build a warehouse and fill it with cases of Coca-Cola. Hundreds of cases. At least 60,000 12-ounce cans.
That's a lot of pop, though the Broadbents know it won't last four months. He was a Pepsi Cola and then a Coke route salesman for 15 years in New York and Tidewater. He knows something about the business.
``It takes a little bit more than a suit and a tie and nice manners to be a route man,'' he said. ``The main thing to being a route man is proper service. You give them proper service, you'll have loyal customers no matter what.''
Now the couple operate B&J Beverages. He finds good sites for soft drink vending machines - such as at the front door of a busy gas station. Good sites are important because a typical vending machine costs about $2,700. The thirsty pay 55 cents per can. To make the machine pay for itself in a year requires a location that sells at least 96 cans a week.
His domain includes 41 vending machines in Tidewater. If the machine jams or empties before the delivery truck comes by, the gas station calls up B&J, which gets on the horn to the supplier.
He gets a commission based on each 24-can case of soft drinks sold through the machines. So the more cases sold, the more he makes.
He figures profits will rise if he refills. He says B&J can refill faster than the supplier.
``With us servicing the account, they won't need to call and tell us the machines are empty,'' he said. ``I'll make sure they don't.
What he needs, though, is inventory. Which led to the ad for $70,000. The Broadbents figure they can build a $23,000 warehouse, buy $30,000 worth of soft drinks, and use $17,000 as working capital.
And what happens if no angel appears? Just in case, the Broadbents applied for a loan at the bank. by CNB