If you’re looking for a business opportunity that offers the chance to earn some passive cash 24/7, then you must consider starting an ATM business. When you know how to start an ATM machine business, then you’ll be solving one very critical problem for your community: access to their own cash. Many people are willing to pay a dollar or two so they don’t have to go to their financial institution to get the money they need.
Before you get started with this type of business opportunity, there are a few steps that you’ll need to complete to make sure that you can legally operate your business in your community. Make sure that you’ve thoroughly answered the following questions as you design your business footprint.
1. Should You Look For Franchising Opportunities?
There are a number of ATM franchises that are available which can help you get started right away with a business. There are some advantages and disadvantages to a franchised business. The main advantage is that you’ll have access to a premiere brand name that will give customers confidence in the services that they’ll receive from your machine. The disadvantages is that you’ll have to pay franchise fees and potential royalties on your revenues.
Many franchise opportunities are in the $25,000 range for ATM machine businesses and veteran’s discounts are typically available. In return, you’ll gain access to suppliers from your franchise arrangement that you’d have to normally develop on your own. It may be cheaper, however, to just purchase and install the machines on your own.
2. Should You Start Small and Scale Upwards?
The average cost of an ATM is about $7,500. You may be able to find some machines for as little as $3,000 in some markets. If you are low on capital, then there’s the possibility that you could start with 2-3 ATM machines instead of paying a franchise fee and go into business with yourself. As your profits come in, you can then make your business scalable and add machines as money allows.
3. Will You Need Additional Equipment?
If you’re servicing ATM machines and putting new cash into them every day, then you’re actually putting yourself at a higher level of risk. Free cash is something that criminals are going to smell from a mile away and there’s a good chance that you’re not going to be in an armored vehicle. You’ll need to have at least one vehicle that will help you transport machines and you may need clips to fill the machines with money. The costs of these are quite variable, so research your local market to see what kind of capital you’re going to require.
4. Are There High Traffic Areas That Could Use an ATM?
Most of the high traffic areas in the public today are owned by another business already. If you see, however, that a grocery store in your community doesn’t have an ATM present, you may have a placement opportunity. The grocery store is going to charge you a leasing or rental fee for the space of your ATM. You may be able to negotiate a commission or royalty on each transaction instead. It is important to remember, however, that you can’t just put an ATM down anywhere that isn’t your own property unless you have permission to do so.
5. What Fees Should You Charge?
Most ATM fees have a price range of $2-$4 when they are privately held. This is in addition to any additional fees that individual’s financial institution charges them for an ATM withdrawal. Knowing how much to charge can be a bit tricky. If you charge $4 and a person’s bank charges $3.50 for a withdrawal, then it will cost that person $7.50 just to withdrawal $20 from their checking or savings account. Many people won’t find that cost to be worthwhile.
This is why many ATMs are offering low fee amounts unless they are in a high profile location, like a casino or a sports stadium. Fees in the $1-$2 range are manageable, even with other ATM fees, and can still make your business profitable. If a traffic location gets 10,000 people every day and you get 5% of that traffic accessing cash, that’s $500 per day that you’ll receive at a $1 fee. Have 3 machines at similar levels and you’ll average $1,500 in revenues daily.
6. How Much Security Will You Need?
There are multiple levels of security that you’re going to need for your ATMs, especially if you plan to connect them via the internet.
- You will need to have some sort of firewall and encryption on the data that is being sent.
- There will need to be regular inspections of the magnetic strip scanners to make sure the data isn’t being secretly compromised by a third party.
- The ATM will need to have some sort of physical security that keeps the machine from being stolen, from chains to bolts that secure the machine to the floor.
Some areas may need more security than others. Take your time to evaluate potential locations in your community and don’t just settle for the first person who allows you to place a machine. Make sure that your communication lines are open so that you can know when it is time to fill up the machine again and then be sure to switch up your servicing times so you don’t expose yourself to personal risks of theft.
7. How Big Do You Want to Grow?
The size of your ATM business will also dictate a lot of the choices that you make. If you have a relatively large amount of machines, you may wish to consider subcontracting your servicing needs to an armored business. You may also need to have employees hired, which required an employee ID number for taxing purposes. Determine the costs of these needs, compare them to your potential profits, and proceed with expansion if it makes financial sense.
Knowing how to start an ATM machine business can help you find a passive income source that is relatively reliable. Manage your risks properly and you may just find a profitable business venture in your future.
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