Want to start an ATM Business? We have got you covered. Starting an ATM business can be an extremely profitable venture. With proper strategy and execution, you can create a reliable source of passive income and earn money by sitting at home. But how to start an ATM business?
According to Grand View Research, the global ATM market size reached $22.80 billion in 2022. It is expected to grow at a CAGR of 4% during the forecast period(2023-2030). Undoubtedly, this is one of the best times to capitalize on this lucrative opportunity and set up an ATM business.
However, starting an ATM business is a big and complex venture and it is important to understand the nuances before you begin. In this blog, we will discuss everything you need to know to start an ATM business and make money.
How to Start an ATM Business? Step-by-step Guide
Here are the steps to start an ATM business and ensure that it is registered properly and legally compliant.
Step- 1 Market Research
Before starting any type of business, it is necessary to conduct thorough market research. Here’s how you do it.
Determine the Initial Costs
An ATM business requires high initial costs, meaning it is important to understand how much capital you will need to set up your business. Start by researching the cost of ATM machines, and other associated costs like vendor commission, maintenance fee, installation fee, etc. While you are at it, make sure to understand the potential ROI and potential profits of the ATM business.
Identify the Target Market
One of the most important aspects of your ATM business is your target market and location. Determine who you want to provide services to and where your business will be located. This will help narrow down the types of ATMs you want to buy and where you will install them.
Start by researching the local market and determine the type of foot traffic and what type of ATMs would be most suitable for that particular area.
Choose an Appropriate Location
A general rule of thumb is to find an area with a high volume of foot traffic and low competition. Some of the most common locations are-
- Convenience Stores
- Gas Stations
- Casinos
- Bars and Restaurants
- Retail Stores
Moreover, it is also important to negotiate a good deal with the vendor or landlord of the location. Remember, the more you pay the vendor the lower your profit percentage will be. Agree upon a reasonable rate that is beneficial for both of you.
Step- 2 Legal and Financial Requirements
Before you can start your ATM business, you will have to take care of legal and financial requirements to become a properly licensed business.
Register Your Business
First and foremost, register your ATM business. It is the first step to paying taxes, raising capital, creating a business bank account, and other important elements of starting a successful business. There are mainly three business structures that you can opt for. Here are the options-
- Sole Proprietorship is the most typical setup for a small business. In this type of business, the owner and the business have no legal separation. All the revenue is received by the proprietor, who also bears full responsibility for business debts, liabilities, and losses. Taxes on all income earned through their enterprise are reported on a personal tax return form.
- A General Partnership is a partnership that involves two or more who join to create a business. They share the profits and losses of the business and both of them are responsible for any debts incurred by the partnership.
- Limited Liability Corporation is a type of business structure that combines the elements of sole proprietorship, partnership, and corporation. It ensures that owners are not held liable for any debts or losses.
Acquire an ATM License
One of the most crucial aspects of starting an ATM business is acquiring an ATM license and other necessary permits. You must obtain a “Doing Business As” (DBA) from the government and health-related permits from OSHA.
Besides these permits, you must also get trademarks, patents, and copyrights for all intellectual properties associated with the new venture. Moreover, depending on your location, you may also be required to obtain state-level and regional licenses or permits.
Create a Business Bank Account
Next, create a business bank account to separate personal funds from the revenue generated by your ATM venture. It also helps draw a financial line between your personal and professional expenses and makes filing taxes a lot easier.
You can also easily track the performance of your business and the potential expenses. Make sure to research the market to see which banks offer the best interest rates, fees, and features before signing up.
Get Business Insurance
Business insurance is a mandatory step as it will help protect you from potential liabilities and risks associated with the business. Here are some of the business insurances you can opt for
General Liability Insurance: This insurance protects your business from claims involving bodily injury, property damage, and other losses that may occur in the ordinary course of operations.
Property Insurance: This type of insurance covers any damage to property like ATMs and their components. It also covers theft of property.
Product Liability: This insurance will protect you from claims involving product malfunctions and customer injuries related to product defects.
Make sure to consult an insurance executive to properly understand the terms of your business insurance and choose the coverage required for your business.
Step- 3 Buy ATM Machines
Now that you have taken care of the financial and legal requirements of starting an ATM business, you can start looking at the types of ATM machines and choose the one that suits your needs.
Determine the Type of ATM Machine You Need
First and foremost, you have to determine the type of ATM you need. Every ATM has different features. Some accept cash, debit/credit cards, or both. Moreover, there are types of ATMs that serve different functions and serve as a mini-bank. Make the choice carefully after evaluating your target audience and their needs.
ATM Machines
These are the best ATMs available in the market that will be best for your ATM business-
- Genmega Onyx- $2445
- Hyosung Halo II- $2295
- GenmegaGT 3000- $3445
Step- 4 Install and Operate ATMs
After you have picked the most suitable ATM for your business, it is time to install and operate it.
ATM Installation
Installing an ATM is an arduous process and will require assistance from a handyman. First and foremost, choose a spot for your ATM machine. Try to position it away from entrances, windows, or back doors.
The best place is close to a rear wall. The handyman will mount the ATM to the wall or the floor. You also need an electrical power supply for the ATM. Depending on the type of ATM, you will either need a 110-volt AC outlet or a 12-volt DC outlet. Connect your machine to the power supply and tape any exposed wires to prevent fire hazards. And you are good to go.
Maintain the ATMs
Lastly, it is crucial to maintain the ATMs to ensure they are running properly. This includes checking for any signs of wear and tear and other issues that could negatively impact the customer experience.
Make sure to also check the wiring from time to time to prevent fire hazards or ATM malfunction. Additionally, keep up with the software updates and security patches to ensure that your machine runs smoothly. Also, hire a cleaner to clean your ATM every once or two weeks to clean any dirt or dust.
Step- 5 Market and Launch Your Business
Now that you have taken care of logistics and legal requirements, it is time to market your business to increase its visibility among the target audience.
Create a Marketing Strategy
Every business needs a solid marketing strategy to beat the competition. You can start by identifying your target audience and developing clear marketing plans to reach out to them.
Depending on your target audience, you can create a website, share promotional content, advertise your business in newspapers or television, and set up booths in public areas to spread awareness about your business.
Offer Extra Services
Nowadays, ATMs serve as mini-banks with a plethora of services like mobile banking, money transfers, bill payments, and more. You can offer these services to stay ahead of the curve. However, depending on your ATM machine, you might have to update the software or buy another machine with these features.
Then, you can promote these additional services to customers for increased foot traffic to your business.
Customer Loyalty Programs
The best way to maximize customer engagement is to incentivize the customer. You can offer a rewards-based customer loyalty program by offering discounts or cashback when they use your ATMs.
Why Start an ATM Business?
Now that you have understood how to start an ATM business, let’s dive into the benefits of starting an ATM business. Here are some of the advantages-
Passive Income
What’s better than having a steady source of income? Having a steady source of passive income. Cash will never go out of fashion and neither will the ATM business. Your customers will always need cash, meaning you will always have a steady stream of passive income from ATM transactions.
Low Maintenance
An ATM business has an upfront cost but is easy to maintain and quite sustainable. There are not many maintenance costs that you need to worry about. This also means that you won’t have to regularly update or service your machines.
High Growth Potential
As mentioned above, the ATM market is on an upward trajectory and you can capitalize on its growth by starting an ATM business now. As the market grows, your business grows, and so does your income.
Flexible Work Hours
An ATM business is a passive source of income and you are in charge of your own working hours. This means you can take vacations or breaks whenever needed and only work when it suits you.
Read Also:- 8 Mistakes to Avoid When Starting an ATM Business
Final Words
Starting an ATM business is not as easy as it looks and requires you to take care of many financial and legal obligations before you can get started. However, with proper planning and research, you can streamline the process and own an ATM business. Make sure to choose a suitable location for your ATM business as it will be crucial for the success of your business. Additionally, it is important to keep up with regular maintenance and promote your business among the target audience for maximum efficiency.
Frequently Asked Questions(FAQs)
Ans. An ATM machine's cost depends on the model and features it provides. Generally, basic ATM machines range anywhere from $2,000 to $4,000. However, the more advanced models can cost up to $10,000.
Ans. Yes, the ATM market is growing and this is the best time to capitalize on that. If you only process 5-10 transactions a day, you can earn a gross profit of $20-$25. With only a single machine, you can earn approximately $500-$750 per month.
Ans. The cost of launching an ATM business will vary depending on the size of the venture. There are large upfront expenses like the cost of ATMs, installation fees, licensing fees, etc. Some other expenses include setup costs, marketing costs, and maintenance costs. Overall, starting an ATM business will cost somewhere around $10,000 to $50,000 depending on the scope of your business.
