Before the Second Capsule Order: exit risk at a hotel lobby bar

What This Note Covers

This note looks at risk for 5 units over 19 months at a hotel lobby bar, 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.

The Inputs, Line by Line

Cup volume is stated per unit per day. Revenue is cups x 30 days x units x price per cup, taken at 11.9. 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.

The Rows Behind the Argument

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.

Three Things the Rows Show

The best month in this model nets about 17958, the weakest about 11853. 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 7.9 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 Reading

Exit cost is set on day one and rarely re-read. By the time it matters, the negotiating position has already been spent.

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.

A placement portfolio should be readable as a list of dependencies. If one decision by one host can remove a fifth of the revenue, that is the first page, not the appendix.

What Buyers Ask Next

Every placement has three people attached to it: whoever restocks, whoever cleans, and whoever takes the complaint. When those three are assumed rather than named, the machine is the thing that suffers.

An one-page card with a name, a number and the three most likely faults converts a stalled machine into a two-minute fix; without it, the same fault becomes a story about the supplier.

The 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. Name who restocks, who wipes and who is called first
5. Put the contact card inside the cabinet door, not in a drawer
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 method, stripped to five moves, runs like this:

1. Measure a week of cups in the venue, then discount the first two days as novelty traffic
2. Use the real consumable cost per cup, not the one in the brochure
3. List site share, power and parts separately so nothing hides inside a single number
4. Turn the payback into months, then into a band, and note which input the band depends on
5. Run the whole thing again at seventy percent of the volume and keep both outputs

Four Venues, Four Different Curves

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

A venue can change category within a year - a new tenant, a shift pattern, a bus route. The pattern is a snapshot, and the walkthrough is what confirms it.

The Takeaway, Stripped Down

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

The trial is the only instrument that turns a guess about a venue into evidence, and it is priced in one clause: the move-out term.

Keep one number on the first page: cups per day you are planning for. Everything else in the ledger is downstream of it.

Where This Conclusion Breaks

Three inputs move the result more than anything else: cups per day below the modelled floor, a site share above the modelled band, and a restock route that cannot reach the machine inside the host's hours. Each is checkable before signing, and none requires a pilot.

If a supplier's payback figure is shorter than the one this model produces, the useful question is which input they changed - volume, price, or the cost lines they left out. The honest comparison is two models with the same inputs, not two headlines.

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

• 23% of the Till Went to the Host: an exhibition centre Ledger
• Payback in 5 Months: 4 Units at a library study area, on Paper
• Best Month $5,569, Worst $2,199: the Spread That Decides It
• 24 Units, 10 Months, One Table: service at a hotel lobby bar