The Basics of Starting an ATM Business and Earning Semi- Passive Income
Starting an ATM business can be a highly profitable venture with a relatively low upfront investment and potential for strong returns. The easy part – that honestly anyone can do – is to understanding the costs and finding locations to place your ATM machines. The hard part is executing this correctly. Finding profitable locations, and negotiating fair splits is really what makes or breaks it in this industry. In this post we give you basically all the information you will need to get started. If there is anything we missed- or you have questions on- please call or email us. We will be happy to go over everything in more details.
High Level Overview
Understanding Costs
You have a few upfront costs when starting an ATM business. The first and most obvious is the cost of ATM hardware. ATMs typically ranges from $2,300 to $3,000 depending on the model and options you choose. You will also need to budget for other costs such as communications, installation, cash allocation and time management. On average, you should expect to invest around $4,000 to $5,000 in total per ATM to get your first ATM fully operational – not counting your time – which does have a value!
What to Look For in Selecting a Location
As a general rule, 1 in about 45 customers who walk past an ATM will use it. Placing your ATM in high-traffic locations, such as convenience stores, bars, or shopping centers will help you earn back your investment faster however the vast majority of these “premium” locations are going to be taken by experienced operators – unless you have an “in”. Some less competitive locations that are great for starters are Hair & Nail Salons, barber shops, mom & pop restaurants, and bars.
Returns on Investment
Average operators will see ROI in as little as six months to a year, depending on the location and transaction volume. The average ATM investor- recoups their initial investment back in approximately 12 – 18 months, and earns approximately $250 – $350 per month depending on commissions to the hosting location.
Now what Really Matters
Choosing a Partner for Success – Some may suggest partnering with a small, local ATM company. If you’re goal is to own and operate a handful of machines, that honestly may be your best option. If you’re aiming to grow a larger ATM portfolio, making several thousand of dollars each month – working with a mid sized ATM company will be more advantageous. Mid sized ATM companies can often provide lower processing fees, better pricing on hardware, and have the capacity to handle a higher volume of machines more efficiently than a smaller operator who might only have a few more ATMs than you do. A Mid Sized Company will still value your relationship and you will not just be a number to them. They need you, they value you- and they are large enough to help you grow and make you more profitable.
That said, some of the really big ATM companies (not going to mention names) can not compete with mid-sized companies when it comes to pricing. They don’t need to be as aggressive because, frankly, they don’t care. So, it’s important to find a partner that’s the right size for your business needs—someone who values your success and offers competitive pricing- like BestATMstore.com. Lots of people make recommend you “go through” someone else to go to a large company. That’s honestly the worst advice ever. They are basically just telling you to go through a middle man (usually them).
Start an ATM Business and Start Earning Semi Passive Income in Just a Few Simple Steps
Starting ATM business is an excellent opportunity if you’re looking to boost your income or break free from the 9-to-5 grind. Surprisingly, it’s not a complex venture at all! By following these simple steps, you can quickly own and operate an ATM business that generates semi-passive income in no time!
Step 1: Decide on an ATM Provider
BestATMstore.com is a full service ATM solutions provider. That means- we don’t just sell you hardware and we aren’t just a processor. We provide everything related to owning and operating an ATM. Such as ATM processing with your choice of processors (CDS & Switch Commerce), wireless ATM connectivity (through our partners at DPL & Opt Connect), nationwide ATM service & installation, parts sales, parts repair & exchanges and of course cash logistics (armored cash loading services). We are your one stop shop for all your ATM needs. We have been in business since 1998 and are family owned and operated. Our partners choose us because we have the strength of a nationwide company yet still maintain a local and personal touch.
There are many ATM companies out there to choose from, make sure you go with someone who understands your needs & goals, and who can help you grow and achieve success.
Step 2: Fill Out Paperwork
To get started, you’ll need to complete some important paperwork. This documentation ensures that you’re set up correctly to run your ATM business and most importantly that you get your money back when someone uses your ATM.
Here is a list of required documents:
- ACH Form: Authorizes us to transfer money into your bank account from your ATM.
- Voided Business Check or Bank Letter on Bank Letterhead: Verifies account information on ACH form
- Sponsorship Agreement: Every ATM must be sponsored by a Bank. We utilize Pathward, and you are required to fill out their form.
- Driver’s License: Required by our Sponsor Bank Pathward.
- W-9 Form: Our processor will send you your taxable earnings for the year.
- ATM Processing Agreement: This outlines your ATM Providers responsibilities and your responsibilities. Our standard agreement is Month to Month- meaning we earn your business not lock you in for a 5, 7 or 10 year agreement.
Step 3: Choose Your ATM Machine
There are several brands of ATMs and styles to choose from.
If you are starting an ATM business- we would recommend free-Standing ATMs: These can be placed anywhere with a power source and take up little space. These are also the most popular models which can easily be moved from location to location. Recommended models are the Genmega G2500, Genmega Onyx and Hyosung Halo 2.
Through-the-Wall (TTW) ATMs: We would not recommend a through-the wall ATM for an unproven ATM location or someone new to the business. If the location turns out to be a dud, its going to be very difficult to sell, and find a new spot for. They are also more costly to purchase and install.
Wall Mount ATMs: Ideal for small spaces. We do not typically recommend this model either to someone new in the business. Similarly to a through the wall- they will be harder to place if the location turns out to be a dud.
Pro Tip: Always buy a new ATM if your are new to the business! Unless you know exactly what you are purchasing and it is certified refurbished by a reputable ATM supplier- don’t buy used!
Step 4: Find the Right Location
The Most Important thing in this business is finding a good location. The success of your ATM business depends solely on this factor. Look for high-traffic areas, places where people need cash, or locations that don’t already have an ATM nearby.
Best Locations: High foot traffic locations, liquor stores, bars, gas stations, gambling establishments, convenience stores, salons & barber shops—places where people need quick cash. Also, look for cash only small restaurants, delis, and bars/ restaurants who have enacted cash tipping policies or who pass on the credit card fees to the customers.
If you choose us as your ATM provider- feel free to bounce ideas off your reps head. We will give you our opinion free of charge!
Step 5: Set Your Surcharge
The surcharge is the fee customers pay to use your ATM. On average, this is about $2.50, but you can adjust it based on competition or location. A higher surcharge helps you make money faster, while a lower one might attract more users.
If you’re splitting profits with a location owner, you may want to set a higher surcharge to ensure you still make a good income.
We can also help you out with revenue sharing ideas!
Step 6: Keep your ATMs full and Start Earning Money
Once your ATM is up and running, the number one rule is keep your ATMs full! We can not stress that enough. You earn money when people use your ATM, so if its out of money- you can ensure you are not making anything!
That being said, the average ATM location will bring in around $400 per month in Gross revenue, with about 160 transactions at $2.50 each. If you manage more ATMs, your income will grow, and with 3–5 machines, you could make $1,200 to $2,000 in each month.
We give you free tools to track your ATMs performance online, text & email alert notifications so you can manage your ATM business.
Starting an ATM business is simple, and most of the decisions are in your hands. You choose the equipment, location, and surcharge that work best for you.
If you have any more questions, contact BestATMstore.com, and we’ll help you get started today!
