The Automated teller machine has since its introduction in the late 1960s been one of the very essentials of life today. Automated teller machines provide a convenient way for bank customers to withdraw their cash, check their account balances, and perform other important banking functions anytime.
The size of the worldwide ATM market was projected to be USD 20.18 billion in 2020, and statistics indicate that it will increase at a compound annual growth rate (CAGR) of 4.9% over the next several years.
In this article, we will discuss how to start an atm business, it also involves its steps, benefits, and all the problems you are searching for; let’s dive into it
How to start an ATM Business?
Launching an ATM business would involve finding the most appropriate locations, purchasing or leasing machines, proper installation, maintaining cash levels sufficiently enough, collecting fees from transactions, and offering continuous after-sales support.
One fundamental aspect is developing relationships with local businesses regarding the placement of your ATMs. The overhead of this ATM business is low, but it does demand a careful plan and efficient management.
Through strong research and accurate implementation, a small ATM fleet can generate stable, passive income. In addition to this potential, the business is also scalable, allowing entrepreneurs to grow their ATMs over time.
Not easy and full of its own set of risks and challenges, though. The ATM business does present one of the more promising opportunities for individuals interested in launching an automated venture that delivers them the capability to get quick cash flow.
Steps To Launching an ATM Machine Business
Create a Strategic Plan
- Where do they want to withdraw cash?
- How much cash each machine holds and how much cash is required to be filled for each machine?
- When shall my supplies be re-stocked or replenished?
- How much money can I collect as fee charges from the customers who are making use of my ATM services?
- What other overheads do I have outside of cash, such as business insurance, paper, ink, and supplies?
Before start an ATM business, do accurate market research and analysis. Be aware of your competitors, know your target, your fixed cost, and your periodical cost, and calculate the amount you can earn through processing charges. ATM Machine Business plan will help you learn everything about your potential weaknesses and remedies before spending your hard-earned money. For example, you first set up as follows.
A business plan becomes an excellent tool for organizing your business and is also indispensable if you’re looking at getting a loan or business credit.
Business liabilities and Debts
First, you wish to shield your business responsibilities and debts by the utilization of your assets. Suppose a customer claims she is injured from one of your ATMs. You can be sued. But if you had formed an LLC, the customer may only sue your business and be able to obtain only the business’s assets.
Most ATM operators tend to be single-member LLCs, primarily to protect themselves against business debts and liabilities. You can also have a multi-member LLC if you have one or more partners involved with your business.
An LLC’s tax system can also be adjusted. You have the flexibility to report the income or loss of your business on your tax return and thus avoid “double taxation.” You will simply need to find a way to open a business checking account.
Open a Business Bank Account
Once your LLC is formed, you should open a business bank account. It is essential to run all your business activities through your bank account to enjoy your personal liability protection. It is, however not simple to find a bank willing to walk with you given that any ATM processing competes with their core business. You might have to work with a local bank or credit union.
Find the Best Places for placing ATMs
Business people who run ATMs know that the secret to successful business depends to a large extent on their putting their machines in the most likely places to attract a huge mass of people who are likely to need to withdraw some cash. These include:
- Vendors selling food, drinks, or other retail products or who sell gasoline
- Restaurants and bars
- Hotels and casinos
- Cash-intensive businesses, such as video game centers or marijuana dispensaries
- Places where clients would likely drop cash tips, like barbershops, salons, and other shop types.
- Locations that prefer to pay in cash
Secure and install ATMs
According to ATM professionals, the best option is to obtain a newly purchased machine to utilize the latest security technology. When establishing a venture. Otherwise, buying an ATM from such websites as eBay, Craigslist, or Facebook Marketplace may oblige you to spend on its high technologies, which raises your costs.
The cost of a new machine ranges from $1,500 to $3,000. You will also require the services of a technician for installing and programming the machines.
Order the machines to be delivered directly to the final destination and do not have to bother about their transport. Ensure that the ATM Machine business will be bolted on the ground with maximum protection against possible injuries or theft incidents. You may want to get general liability or business insurance to protect your small business.
With the expansion of the ATM business, you have to look at new locations and locate technicians for fixing machines.
What kind of business is ATM Business?
An ATM business owns and operates automated teller machines and renders cash-withdrawal services to customers at different locations.
A new business will be introduced, and this business will be operating automated teller machines in many busy locations, such as convenience stores, shopping malls, and gas stations. Such a business earns income by charging customers to access the services of withdrawal of cash or performance of various banking transactions.
Once a deal is sealed with the owners of the site where ATMs are to be installed, the owner of the ATM would accrue a share of all the fees so generated. Such a business provides a steady flow of income with hardly any ongoing expenses. This is an attractive proposition for business owners who want a scalable model that uses cash transactions.
Advantages to start an ATM business
First, let’s talk about why you might want to start an ATM business. These are but a handful of the benefits.
- Consistent Revenue Flow
- Low Maintenance cost
- Chances for Advancement
- Flexible Working Hours
Common mistakes to avoid before starting an ATM business
Miscalculation of funding needs
Some cash will have to be allocated to replenish the machines on a rollover schedule. You should budget for at least $2000 a week for every terminal. To deploy 10 terminals, it is going to cost you at least $20k in working capital or more to successfully service the machines.
Pay no heed to EMV
Deeply investigate EMV, so you know which makes and models are eligible to be upgraded and what the cost for these upgrades will be for you. This will avoid any future headaches when implementing EMV.
Reduce your margins
Be careful as you discuss your surcharge fees and commissions with your merchants. Avoid eating away too much profit margin. One needs to know the dynamics of the market and understand what would be expected while keeping certain levels of vagueness. Properly setting your margins from the outset will make you much more satisfied with your income over time
Signed agreement
When you are thinking about selling your locations or settling for starting an ATM business site, you should ensure you get signed agreements from each of your merchants. So many operators are running their ATM businesses on verbal agreements, and when the time comes to sell, the valuation is badly affected.
If the merchants decide to pull your ATM or let a competitor install one in your place, you will be out of luck. The big lesson is to have signed contracts.
Poor understanding of geography
Ensure your locations are not too dispersed from each other or your home base. Choose a territory and properly execute it. The higher your location’s distances, the higher your time and service costs will be. A well-integrated machine network is certainly more attractive to potential buyers.
Final thoughts
Consequently, start atm business is one of the most unique opportunities offered to entrepreneurs today to make passive cash daily. A serious challenge in such a business is the overhead and maintenance costs, but this is relatively minimal as the business can easily be scaled upwards into becoming a very stable source of revenue.
In other words, more locations, especially in high-traffic locations, would translate into more income. The ATM company’s performance is mostly dependent on three things: machine security, strategic ATM placement, and adherence to banking regulations. ATMs, for those looking for an elastic and potentially profitable business in this market, would also appear to be a great option.
