Want to know the ins and outs of how to start an ATM business this year? Any business set up right can be lucrative but an ATM business where people flock to your ATM to get their hard-earned money out when done correctly can be a very lucrative passive income source.
The smartest way of doubling your money is by investing it in opening up a business. Yes, it takes time for a business to get established and start generating huge profits and it comes with its risks but we believe it is totally worth it.
Although you must research the type of business you want to invest in. It should be something popular with a great following so you could start making money as soon as possible. One of the top running businesses in this era is an ATM business. Situating an Automated Teller Machine at a populated spot is a great way of generating a steady income. However, it is not everyone’s cup of tea.
How to start an ATM business is quite a complicated question as it requires a lot of things i.e. a nice-sized investment, a prime location, a business license, and further other business-related equipment. If you are interested in investing your savings in this business, continue reading this article till the end. In the upcoming sections, we have thoroughly explained the process of opening your own ATM business.
Following are the 10 steps that are involved with learning how to start an ATM business.
Table of Contents
How To Start An ATM Business In 10 Easy To Follow Steps
1. How To Start An Atm Business The Business Plan
Planning is the first and foremost step of literally anything when it comes to life in general, and this holds especially true when learning how to start an ATM business properly. Whether you are considering opening up a small-scale business or you are launching on a large scale, business planning is a must. Without a proper plan of action, no one can achieve their goals.
When learning how to start an ATM business, multiple specifics should be considered. You have to consider the costs that will be incurred during the establishment process of your business. A typical ATM Machine costs around $1000 to $10,000. But that is not the only investment you need.
In the US, the cost of an ATM also depends on the style and types of ATM machines you purchase. You can get one for as low as $3000 only if it is just a basic ATM, or you can opt for one with more advanced features by paying a higher price for a modern fully-featured ATM machine.
You can even opt for a used ATM machine if you want to keep your startup costs as low as possible.
Even though you will not need a lot of ATM supplies to start an ATM business, you will still have to pay rent for the space you will place your ATM along with the electricity bill and other things such as taxes, transporting vehicles, etc.
Other things to plan out before the launch of your ATM business are the name you are going to give your brand, your target market, the amount you will be charging your clients for ATM fees, transaction fees, and other similar business-related stuff such as a potentially good location for your ATM machines.
2. Forming Your ATM Business As A Legal Entity
We cannot guide you through the process of forming a legal business entity since it depends on your jurisdiction. To get the most accurate information, visit the website of your state’s secretary. But what we can do is enlighten you about the different types of legal entities so you can decide which one you want to go with.
You can go for sole proprietorship if the ATM business is just a side hustle for you and your main job is something else. However, a better option would be to go for LLC i.e. Limited Liability Company. The benefit of opting for this particular type of ATM insurance is that you will not be held accountable in case your business gets sued for some reason.
Before making up your mind about a business type to go with, make sure to learn about it in-depth. Consider the tax and legal associations for each of them so you know what you are signing up for.
When choosing a name for your business, you first need to check out the business listings in your jurisdiction. This prevents repetition and saves you a lot of time too. If you decide to name your business different from your documented name, you will have to add that name to the registration documents to get it established with the state.
3. How To Start An ATM Business Registering For Taxes
It is impossible to start up an ATM company without getting registered for local and federal taxes. To do so, the ATM owner is supposed to get an EIN i.e. Employer Identification Number. Applying for an EIN is a simple process and the best part about it is that it is free of cost.
The EIN is a distinct 9-digit code that helps the IRS in keeping a check on every business for tax collection and tax reporting. You can your EIN by visiting the official United States IRS website where you can apply for it.
4. How To Start An ATM Business By Opening Up A Business Bank Account
Here comes another important step. Opening up a separate business bank account for your business transactions is highly essential. Usually, inexperienced entrepreneurs think of it as unnecessary and prefer to proceed by using their bank accounts.
We cannot emphasize enough how big of a mistake that is. Since your ATM business and you are separate entities, you should also have separate bank accounts for both. If you use the same account for your personal as well as business transactions, there is a high probability of those funds getting mixed up.
This would create trouble for you in the long run as it would become challenging for you to differentiate between your personal funds and your business funds. In the case of your business going through any legal trouble, it could also result in the confiscation of all your money since you didn’t keep them separate from day one. In the worst-case scenario, even your assets such as your land and car can be taken away from you.
Furthermore, having a separate bank account for your business enables you to have it in the business’s name instead of using your own name plus, it makes tax filing a little less hectic. Get a business credit card too so that you can keep a record of your business transactions which can prove to be useful later on.
5. Setting Up Accounting When Starting An ATM Business
Without setting up proper accounting for your ATM business, there is no way to identify if it is performing well enough. Business accounting assists you in keeping track of everything such as capital investment, rent expense, other utilities, and other various sources of business income.
Having an organized record for all your debit and credit business transactions is highly useful when it comes to federal tax filing or even when you have to provide legal evidence for your business. All these steps are designed to guide you on how to start an ATM business while also keeping yourself out of trouble in the coming years even after the business has been well established.
6. How To Start An ATM Business By Getting The Proper Permit and License
Starting an ATM business is huge. So if you are thinking you would be able to ditch the government agencies if you do not apply for the required permit and license, then you are absolutely wrong.
While small businesses may get away with this, a large-scale business like this one will never survive. To keep yourself on the safe side, apply for the permit and license necessary for your business.
Not having it in times of need can result in a huge amount of fines or some cases can even result in your business getting shut down. Therefore, you should pay a small amount of fee at this step to prevent a big loss in the future.
Again, we cannot tell you the exact method of applying for these permits since they vary from area to area. However, you can visit the clerk’s office of your town or county to get the relevant information. You can also get help from any of the local associations in the USA, they can guide you properly in this matter.
7. Getting Business Insurance For Your ATM Business
What if your ATM gets damaged in an accident? Who is going to help you recover those $10,000 that you invested? The insurance company! Whether a business is based on a small scale or a large scale, one should never neglect the importance of getting it ensured.
Even though the chances of your ATM business suffering from a big loss are quite rare, it can still happen. So don’t get yourself into a situation where you might be on the verge of going bankrupt.
In case of any loss, you can easily recover a considerable percentage of your money by claiming the insurance thus saving you the loss of your investment and preserving your business’s financial condition.
General Liability Insurance and Worker’s Compensation Insurance are the most common and popular types of business insurance policies. The former one is perfect for a start-up like this one so you may want to start with that.
The Worker’s Compensation Insurance is for the businesses that have employees. But since an ATM business does not require any employees as such, that insurance policy may not be of any use to you.
8. Defining The Brand For Your New ATM Business
When learning how to start an ATM business you need to come up with a great business name. If you want your ATM business to flourish, you should build a strong brand image. Let’s give you a little task here: come up with the names of any three businesses that you have never associated with.
We bet that all the three businesses that you thought of are well-defined brands even if you have never had any experience with them. The low-profile brands probably did not even cross your mind.
So in short, the only way to make your business stand out in such a saturated market is to do its strong branding. To do so, get your logo designed by a professional and spend a generous amount of money in marketing your business to its target audience. Wondering what your target market could be? Well, that too, will be discussed in the upcoming sections.
9. Creating A Website For Your ATM Business
Even if you don’t offer online services, you should still create a website. In this digital era, having an official website for your business is a must-have thing. If you ponder over this, you will realize that all authentic businesses have their official socials and website regardless of their size.
It is a way for their audience to connect with them. Gone are the days when people would visit offices to discuss their queries and learn more about what you have to offer. Nowadays, everyone prefers getting all the information while sitting at their home.
The good news is that website building has been made a lot easier over the past few years. Some time back, it was considered a tough task that was not possible by everyone. But thankfully, that is not the case anymore. With the launch of several website-building software, you can now easily create your website within a couple of hours and open up a bridge for you and your customers to connect when first learning how to start an ATM business.
10. Setting Up A Business Phone System For An ATM Business
Owning a phone system for your business is one of the best things that you can do for yourself. It grants you the liberty of keeping your professional and personal life separated from each other. It also helps you to keep your personal number private.
Furthermore, having a phone line for your business will contribute to its further automation. It will also enable your target market to be able to get in touch with you without any hassle.
You can easily find many types of phone business systems from different companies. They have various features depending on their price, you can check them out on the internet and go with the one that you find the most suitable.
Now that you know how to start an ATM business, let’s talk about some ideal locations to place an automated teller machine.
Choose The Best ATM Locations For An ATM Business When Starting An ATM Business
- Gas Stations
One of the most suitable locations for placing teller machines is gas stations because of the foot traffic. As many people stop by the gas stations to fill their tanks, it is convenient for them to draw out some cash from there too. It saves them an extra round of traveling to a nearby ATM if they are short on cash.
- Convenience Stores
When at a convenience store, we all end up buying more stuff than we intended to. Sometimes even the things that we don’t need. So what happens if standing at a counter you realize that you are short of cash? Of course, you will look around for an ATM.
If this has previously happened to you, then know that you are not alone in this boat. Convenience stores are an ideal location for ATMs as a lot of people end up drawing cash from thereafter buying tons of extra stuff making convenience stores a great location for a new ATM machine.
As a matter of fact, the most desperate users waiting to pull out money from the nearest low transaction fee ATMS are seen at the hospital. Even though a hospital setting can be quite depressing, observing from a business point of view, teller machines receive most of their transactions from hospitals.
Therefore, placing your automated ATM machine at a well-known hospital might be a great idea since it is a location where people tend to draw a huge amount of cash in case of emergencies.
- Shopping Malls
Do we even need to state the obvious? Of course, shopping malls are the best high-traffic areas where you can set up your ATM. Our society has a knack for shopping. Even window shopping sometimes leads to an expenditure of hundreds of dollars.
But not everyone carries around that much cash in their wallets, right? Having access to an ATM right inside a mall is super convenient for customers. This way they don’t have to go all the way to an ATM closest to their location to pull out cash.
These four places are the best places to put an ATM. However, you first need to seek permission from the proper small business owners at these locations and strike a deal with them. As you are occupying their office space, they should be getting something out of it too, right?
Lastly, let us discuss some ways of promoting your ATM business when getting started with your new ATM business:
How To Market An ATM Business
The most important thing to learn about how to start an ATM business is how to market your new atm business to your target market. By now, you should have a good understanding of the fact that promoting an ATM business is a lot different than promoting a regular business.
This is because an ATM business does not require a lot of promotion. Some may wonder why so here is the explanation: as long as you are operating at a prime location, you will not need to attract customers. Those in need of cash will automatically come to your ATM and draw cash from it.
Since you do not get to directly communicate or engage with your customers, there is not a lot that you can do to attract them. However, as mentioned above, you should build a strong brand image. Also, build strong relationships with your merchants as they are the ones that you directly interact with.
Keeping customers happy and satisfied will result in them discussing your ATM business in good words with others in their community hence promoting your ATM business, and getting you more free word-of-mouth advertising.
Conclusion On How To Start An ATM Business
The extensive process of how to start an ATM business has been perfectly elaborated on in this article. It is indeed a very profitable business but remember it takes a lot of hard work and consistency to drive any business towards success!
But with the right business plan, you can turn your ATM startup into a thriving ATM franchise creating a nice semi-passive income source for yourself and your family.
See how to start an ATM business by watching the quick video below and see how this can potentially be a great business model for you.