How To Start an ATM Machine Business in Five Steps

Do some market research and analysis before you start. Understand your competition, your target market, how much you need for upfront and ongoing costs, and how much you can earn in processing fees. A business plan is a great way to determine your strengths and weaknesses and potential solutions before you put your money on the line. For example, you should determine the following:

• Who are my customers?

• Where will they want to withdraw cash?

• How much cash will I need to stock each machine?

• When do I need to restock?

• What can I charge customers for the ATM services?

• Who is my competition, where are they located, and what are their transaction fees?

• Will I have enough cash flow from surcharge revenue to restock the machines and purchase new ones?

• What are my other costs besides cash, such as business insurance, paper, ink, and supplies?

A business plan is helpful for organizing your business and is necessary if you seek a loan or business credit.

The first step is to protect your business liabilities and debts from your personal assets. Suppose a customer claimed an injury by one of your ATMs. They could sue you. However, if you formed a limited liability company (“LLC”), the customer can only sue your business and will recover only your business assets.

Many ATM operators are sole proprietorships, and they form a single-member LLC to shield themselves from business debts and liabilities. You can create a multi-member LLC if you have a partner or partners in your business.

Another advantage of an LLC is its flexible tax structure. You can report your business income or loss on your personal income tax forms, avoiding “double taxation.” Forming an LLC is easy with your Secretary of State’s office or using an online service.

Once you have your LLC, you will want to open a business bank account. You should make all your business transactions from your bank account to maintain personal liability protection. However, it may be challenging to find a bank that wants your business since ATM processing competes with tsheir business. You could have to find a small bank or credit union.

ATM business owners know a critical part of their business is to place their machines where there is a lot of foot traffic and where people may need cash. For example:

• Convenience stores, liquor stores, retail stores, gas stations

• Bars and restaurants

• Hotels and casinos

• Cash-only businesses, such as arcades or medical marijuana dispensaries

• Places where potential customers may want to tip with cash, such as barbershops, salons, etc.

• Places where customers prefer to pay in cash

Scout out potential ATM locations in high-traffic areas. You will have to get permission from business and property owners to place ATM machines there. It is essential to sign an ATM Placement Agreement with the owners outlining who is liable for injuries, what rent or commission you will pay for placing your ATM at their location, and other rights and responsibilities.

ATM industry experts advise purchasing a new ATM machine when launching a startup because it will have the latest security technology. Otherwise, if you buy ATM machines from eBay, Craigslist, or Facebook Marketplace, you may need to pay to upgrade the technology, which could be more costly. A new machine may cost around $1,500-3,000. You may also need to pay a technician to install and program the machines.

Have the machines delivered to their final destination so you do not have to arrange to move them. When installing ATM machines, bolt them to the ground to avoid injury or theft. Consider having general liability or business insurance to cover your small business.

As your ATM company grows, you may need to find new locations, hire technicians to repair the machines (i.e., if a dispenser breaks), or keep up with the latest types of machines.