How To Start An ATM Business in 2023
Starting an ATM business may seem daunting at first, but with our proven formula for getting your ATM business off the ground, you will avoid many of the mistakes that novice ATM owners make. There are countless details and nuances that make up an ATM business (especially in 2023) so we have sectioned this article into simple, concise steps in order for you to follow more easily:
Buying ATMs new, used, or leased
Finding a location for your ATM
Keeping your ATM filled with cash
Planning for miscellaneous expenses
Networking
Buying Your First ATM
Congratulations! Buying an ATM is the first step towards getting your foot into the business, although for many, it is a significant expense, as new machines can range anywhere from $2,500 - $4,000+.
Depending on your finances, buying a used ATM may make more sense for you. If you want to get into the ATM business, but you don’t have the necessary capital to buy a new ATM, used machines can be a great option, sometimes costing less than $1000 if you find a really great deal. However, before you go to craigslist and start buying every cheap ATM you see, consider the following:
Used ATMs are inherently older, and have seen much more use in the industry. This means that the parts within the machine have a higher likelihood of wearing out, thereby leading to a machine failure.
Replacement parts for ATMs are not cheap! Even for a simple pin-pad replacement, you’re looking at spending $500+ for the pin-pad alone, not including the cost of hiring a technician to replace it for you.
If you are mechanically inclined, you may be able to get away with replacing and installing your own parts on your ATM, but for many, this is not feasible. ATM companies hire ATM technicians to install the parts they order and typically charge a minimum of $100.
The used ATMs you find on places like craigslist and Facebook typically are older models whose software will not be supported by processing networks in 5-10 years.
With all of this in mind, this absolutely does not mean you should avoid used ATMs all together. This just means that you need to thoroughly inspect the ATM beforehand for faulty parts, and be aware of the risks that come with buying used.
However, if you do have the capital to buy a new ATM outright, that is absolutely what we recommend! Buying your ATM new allows you to avoid all of the potential risks we have outlined above, while only spending marginally more.
If you are really looking to spend essentially none of your capital upfront, leasing an ATM is certainly an option to consider. Leasing an ATM allows you to make small monthly payments on each one of your machines over the course of many months. However, the risk associated with this is that the location you ultimately place your ATM at may not produce enough revenue to pay the monthly payments on the machine. People want to get into the ATM business to generate passive income, and if your location cannot produce enough profit each month to make the machine payments, you will actually be losing money each month! However, if you are certain that your location will do well before leasing your machine, leasing can be a great option to consider!
Finding A Location For Your ATM
Now for the hard part. When you are first starting out as an ATM company, the hardest part of growing your company is through finding location leads. As a smaller ATM business, there is little inherent value for a business to choose your ATM company over a larger one. They have more infrastructure, employees, and capital than you do. However, this does not mean that you don’t stand a chance - you just need to get creative!
When starting your ATM business, you likely will not have a website that companies can reach out to for their ATM needs, so platforms like Facebook marketplace and craigslist are great places to advertise your business. We recommend making about 10 ads/listings for each one of your ATMs that you are trying to place on either of these platforms.
Cold calling businesses in your area is a tried and true method for finding ATM location leads, although there are several things you need to emphasize to the business you are calling when closing a deal:
You are providing a free service - they do not need to buy anything from you.
Having an ATM in their business will inherently bring more value and therefore customers to their business.
This is not completely necessary, but we recommend giving their businesses a portion of the ATM surcharge as an incentive to work with you.
You will take care of everything. They don’t need to worry about the installation process, the cost of the machine, or loading it with cash (if they don’t want to).
Finally, one of the best ways to find locations for your ATM is through your connections. Reach out to your family, friends, acquaintances, or anyone else who may have or know someone who owns a business. This is one of the easiest ways to find locations as your connections will inherently trust you more than someone who you cold call and have no relationship with.
There are many ways to find location leads as an ATM business but these are the main ones you should consider when starting out at first!
Keeping your ATM filled with cash
How you decide to keep your ATM filled with cash in many ways determines what type of ATM business you want to be. There are 2 main options for keeping your ATM filled:
1 - Filling Your ATM With Your Own Capital:
This is a great option if you are looking to maximize the profit that your ATM generates in every aspect. Filling your ATM machine with your own money means that you do not need to pay someone else (a vaulter) to keep your machine filled. Vaulters typically charge 50% of the surcharge fee of your ATM, which means that you can literally double the profit you generate through your machine when compared to paying someone to do it for you!
Hold on a second! Filling your machine with your own cash is certainly a great option if your primary goal is to maximize profit, however there are two inherent risks that come along with vaulting your own machine:
Filling your ATM with your own cash means that there is an inherent risk of someone stealing your machine, in addition to the cash you filled it with! Precautions such as bolting down your ATM and putting a tracker in it are two ways to effectively deal with break-ins, but certainly do not eliminate them entirely. The risk of someone stealing your ATM is not high, but it is definitely something to consider when considering this option.
Filling your ATM yourself means that the work you do for your business will inherently be less passive, as you will sometimes need to drive multiple hours away from where you live just to fill your machine. If you have multiple machines on a route, or have enough money to keep the ATM filled for weeks at a time, it's worth considering this method, but we think that it limits the long term growth of your company, as you can only fill so many machines at a time.
2 - Paying A Vaulter To Fill Your Machine
Personally, this is the method we recommend if you are looking to maximize long term growth. Having a vaulter fill your ATM on a consistent basis means that you will have essentially no work to do for your ATM on a daily basis. They will take care of the cash loading, and, in many cases, vaulters will also be willing to replace and repair parts in your ATM if they break. This method truly allows your ATM business to grow exponentially, as, with each additional location you gain, you will obtain more passive income to your business, while essentially having the same amount of time to work on other aspects of the business.
Plan for miscellaneous expenses
ATM machines are not simple. There are hundreds of moving parts within the machine and it is not a matter of if something fails in your machine, it’s when. Depending on if you buy a new or used machine, the frequency of machine breakdowns will vary, however, at some point, you will eventually need to pay for replacement parts for your machine. Parts can be as low as $50 but in many cases they will be several hundred dollars. ATM machines certainly do not fail all the time, but you should expect these expenses when starting your business so you can be prepared adequately!
Additionally, there are many smaller expenses that you should come to expect when starting an ATM business. These expenses include a form of internet connection for your ATM machine ($100+), receipt paper ($30+), ATM insurance ($200+), filing for an LLC ($500+), digital marketing, and much more..
You won’t encounter all of these expenses on a very frequent basis, but you should be aware of all of the costs associated with being an ATM business before getting started, which is why we have outlined them for you here!
Network
This is perhaps the most important step for your ATM business. As we briefly covered before, networking can be an excellent option for finding your first ATM location, but it is also a great option to continually find more locations. As your business grows, and you build more connections with the businesses you place your machines at, you can use these businesses to see if they know any other businesses that might need a machine. This is a great option for creating a continual stream of leads for your ATM business.
Networking is not only beneficial to finding new locations. In fact, using your network of vaulters, processors, and anyone else in the industry allows you to overcome new problems you might face as your business grows.
For example, if you have a location that reaches out to you that is outside of you or your vaulters’ service area, you can contact the people in your network to see if they know anyone in the area that could help you!
Networking is crucial for sustained growth as an ATM business as there will always be obstacles that you alone will not know how to face.
Final Thoughts
We hope you found this guide useful, and if you are at all interested in getting our personal help for starting your ATM business we offer processing and mentorship on our website to get your ATM business started. Don’t hesitate to reach out to us - we’ve been in your shoes before and don’t mind sharing what we’ve learned. At Dash ATM we have an abundance mentality and truly believe there is enough of the pie to go around for everyone!
