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This Side Hustle Spotlight Q&A features Zach Downey, owner and CEO of Distinctive Vending, a company that operates cotton candy machines in high-traffic locations such as resorts and amusement parks.
Image credit: Courtesy of Distinctive Vending. Zach Downey.
What did you do before starting your side business? Why did you become interested in entrepreneurship?
I started vending during my freshman year of college, but entrepreneurship has been a lifelong journey for me. One of my first business experiences was going door to door with my power washer and window cleaning kit. That evolved into selling minigun models (unsuccessfully; I have 200 units of miniguns in my apartment). Each iteration of the business improved on the previous one, leading to today’s cotton candy vending machines.
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When did you start your side hustle and where did you get the inspiration for it?
This business didn’t start out the way I originally planned and I just pivoted to it because I had no choice. Originally, my goal was to install a pizza vending machine on the campus of James Madison University. The idea was approved and space was built for it, but it took a long time to get his UL certification (meaning a product or service meets local and federal environmental and safety regulations) for the machine. Funds were lacking. While surfing the net for a solution to my UL problem, I stumbled upon the world of cotton candy vending machines. Realizing that the market was not developing at all, we started contacting companies to test if there was a demand. And the demand was there.
Were there any problems in the early days of your side business? How did you fix it?
At first we had two machines in the resort, but after two months they stopped working at the same time. I remember driving from Virginia to Texas in one go so as not to lose the resort’s business. It was a stressful time, but I learned a lot.
How long did it take you to start earning a steady income every month? And how much money did you earn from your side hustle?
Because we installed the machine in such a high-traffic location, we started generating revenue within 10 minutes of setting up our first machine. It’s a strange feeling to see an idea come to life and see numbers on the screen. In the first weekend, with just one machine he made more than $800.
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You’ve turned your side hustle into a full-time business. What is your current average monthly or annual income?
As you can imagine, our monthly revenue is cyclical, with the majority of our revenue occurring in the summer. In the nice months of summer, one machine can earn him anywhere from $6,000 to $15,000. Getting 10 machines will earn him $100,000 a month. The important thing is to have a good location. We expect to reach $500,000 in revenue by 2024. Currently, we own and operate 10 of his machines, and in the next year he plans to add 25-50. As we expand, we are focusing on locations where we can house multiple units.
How passive is your current business? Do you have employees who can help with machine maintenance?
Cotton candy vending machines aren’t as passive as regular vending machines, but you’d be wrong. After approximately 100 to 150 uses, you should have an employee clean the bowl and burner cover. Also, the employee must replenish the consumables after he uses them 300 times. The biggest problem we’ve encountered is dispensing failures, which happen from time to time. For example, we just repaired a machine in Texas that had humidity issues. The built-in humidifier was not working well, so when the machine produced cotton candy, the cotton candy did not stick to the paper sticks. I solved the problem by increasing the base humidity of the machine, but be prepared to deal with problems like this on a weekly basis.
Technically, we don’t have any employees and all of our employees are classified as independent contractors, which saves us on payroll taxes. We typically employ different independent contractors for each location, unless there is a concentration of machinery in one area.
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What advice would you give to people who want to start their own side hustle and be successful?
As a startup, you need speed. Too many people wait until the stars align, until the seas part. However, by the time this happens, it is usually too late. Everything we did needed to be quick and completed yesterday. Startups live and die by how quickly they learn and implement those changes.
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