16 Months In, Payback Is Still 22 Months Away

Scope and Shape of the Note

This note looks at risk for 2 units over 16 months at an industrial park, written from the buyer's side of the table. The figures are modelled rather than measured: cup volumes, price per cup and cost lines follow stated assumptions, and the arithmetic is left visible so a reader can substitute their own numbers.

What Was Assumed, and What Was Not

Cup volume is stated per unit per day. Revenue is cups x 30 days x units x price per cup, taken at 10.2. Cost is consumables, the site share, power and parts. Payback is equipment spend divided by steady monthly net. No figure here is a quotation.

The model keeps the ramp separate from the steady state: the early months carry a lower cup count, and the steady figure is the plateau the site settles into once regulars appear. A reader who expects a different ramp can replace it without disturbing anything else on the page.

Six Months in One Table

The columns are shown separately because the argument is rarely about the total. It is about which line moves fastest when a site underperforms, and which lines were fixed before the first cup was sold.

How to Read These Rows

The best month in this model nets about 2353, the weakest about 460. The gap is the site's own variability rather than a change in cost, and that gap is what a trial period exists to measure.

At the modelled plateau, payback lands at 21.6 months. Read it as a reading of these assumptions, not a forecast: halve the cup volume and the same placement reads very differently.

Consumables scale with sales, so they rarely surprise anyone. The site share and the route hours are the two lines that do surprise operators, because both are agreed before the first cup and neither moves when the site underperforms.

The exit risk Question, Answered with Rows

Concentration is the quiet risk: one host with three sites, one supplier with the only capsule in stock. Both look like efficiency until the year they do not.

The uncomfortable version of this business is a fleet where a single host's decision can remove a third of the revenue in a week.

Diversification is not a corporate word here; it is the difference between a bad month and a closed operation.

The Harder Question Behind It

Placement paperwork fails on the dull clauses: access hours, who pays for power, what happens when the host changes the use of the space, and how either side leaves.

The exit clause carries more value than the rate. A placement that cannot end without penalty is a bet that has to win; one with a written move-out is a test that can fail cheaply.

A Short Check List

1. Check what share of revenue the largest site carries
2. Confirm a second source for the capsules the menu depends on
3. Keep the move-out terms in the machine folder, not in an email
4. Write access hours and the power arrangement into the agreement
5. Agree the move-out term and the notice period in writing
6. Confirm the trial period and the move-out term before delivery
7. Write the modelled cup volume into the plan and review it after month one

Running the Same Numbers on Your Site

The arithmetic is short enough to redo in an afternoon. Do it in this order:

1. Take a full week of cup counts, including the two dead hours nobody likes to record
2. Price one cup from the invoice, including the capsule, the cup and the lid
3. Put the host share, power and spares on three separate lines, never one
4. Divide total equipment and installation spend by steady monthly net, then round the answer into a range
5. Halve the cup volume and see whether the site still earns - if it does not, say so before signing

The Same Cabinet, Four Venues

Put the same cabinet in four rooms and you get four different ledgers. These are the patterns worth recognising before the walkthrough.

None of these patterns is better than another; they are different rhythms. A menu and a restock cadence that suit a shift-change site will look wrong at a clinic, and the reverse is also true.

What Survives the Meeting

Start with this: a ledger is a negotiating document. It is only useful if the other side can see which line you disagree with.

Second, the trial period is the cheapest instrument in the whole purchase. It converts an opinion about a site into a reading, and it costs nothing beyond a written move-out term.

Third, write down the cup volume you are planning for. A placement that hits its volume and misses its margin is rare; a placement that never reaches the volume is common, and a written number makes that visible in month two rather than month ten.

The Conditions Behind the Result

What breaks this conclusion is boring: fewer cups than modelled, a higher share than agreed, or a delivery window that closes before the route arrives. Each is a question, not a pilot.

The useful reply to a better number is a request for its assumptions. Nine times out of ten the gap is a cost line that was left out rather than a saving that was found.

Common questions

What is the biggest risk in a placement?

Concentration - a single site or a single supplier that the numbers depend on. It is measurable, and it usually shows in the first quarter's ledger.

How is risk limited on a new site?

A trial period with a written move-out, a modest first capsule order, and a menu that does not depend on one line.

What do the modelled numbers actually mean?

They are the arithmetic of stated assumptions, not measurements. Every input is listed in the assumptions section so a buyer can replace it with their own.

Why show six months instead of a full year?

Because the first six months contain the decision: the ramp, the plateau, and the first sign of which cost line moves when the site underperforms.

Related reading

• Month One Is Not the Business: 13 Cups, Then 32
• On Paper, 9 Months. Read the Assumptions First
• Best Month $5,569, Worst $2,199: the Spread That Decides It
• Where 24% of Revenue Went, and Why Nobody Priced It