Just like any other venture, you first need to determine the amount of capital to set up your first ATM business. In this type of business, location is critical. Of course, you need high foot traffic, so people are more likely to use your machine.
In a perfect world, you only need to spend money once and then wait for profits to come trickling in. However, the ATM is still a device, and it will break down. Thus, you need to set up an annual or monthly budget for ATM repair and maintenance to optimize your unit. In the United States, there are almost 500,000 ATMs. More than half of them are owned by independent owners, which means the banks do not hold them. The numbers prove that operating an ATM is a profitable business.
Questions to Ask Before Buying an ATM
You need to study your market first to boost your chances of success. You do not only start a business without accounting for all the factors.
Here are some of the questions you need to ask yourself:
- Have you encountered many people requesting the location of the nearest ATM?
- Do you own a convenience store or bar? Data show that 40% of customers are likely to spend money on the store after withdrawing money.
- Do you have a location in mind with many restaurants, retail shops, bars, and the like? These are establishments where people are likely to spend money. And they need an ATM to do that.
- Do you rely on cash transactions for your business? Do you have many customers?
What Are the Expenses Involved?
If you are determined to start your ATM business, here are some of the costs you need to know about:
#1 – Buying the machine — A new ATM will cost you about $1,500 up to $25,000. A free-standing machine–the most common type–will cost you around $2,000 up to $8,000. A built-in machine is more expensive, as you may find a unit that is more than $10,000. You can also buy a used machine, which will cost you as little as $500.
#2- Additional expenses — Expenses do not stop with the purchase of the machine. You also need to consider the following costs:
- Internet
- Phone line
- Cash cassette
- Receipt paper
- Vendor fees
- Bags for transporting cash
#3- Repair and maintenance — If you are buying a new one, you do not need to be concerned about the machine breaking down as much. A typical machine is designed to last seven years without fault. However, you should budget money for ATM repair and maintenance. A conservative amount would be $300 per year.
#4- Rotating cash — At the minimum, your ATM should become refurbished about $2,000 per week. However, it depends upon the amount of withdrawal. You can easily monitor the cash dispensed through the terminal.
An ATM business is an excellent passive investment, which can yield you up to $20,000 a year. If you already have a retail or convenience store, the machine will provide you with a secondary source of income. The best thing is that the unit does not require maintenance and overhead expenses. You are only concerned about whether or not it is in excellent running condition, or it has sufficient cash for withdrawal.