When a consumer needs access to cash, most are willing to pay a few dollars in service fees at the nearest ATM. Automatic teller machines strategically placed in public locations around town is a profitable way for entrepreneurs to earn a comfortable passive income.
Learn how to start your own ATM Business and whether it is the right fit for you.
Ready to form your LLC? Check out the Top LLC Formation Services.
Start an ATM Business by following these 10 steps:
- Plan your ATM Business
- Form your ATM Business into a Legal Entity
- Register your ATM Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your ATM Business
- Get the Necessary Permits & Licenses for your ATM Business
- Get ATM Business Insurance
- Define your ATM Business Brand
- Create your ATM Business Website
- Set up your Business Phone System
We have put together this simple guide to starting your ATM Business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What will you name your business?
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
Luckily we have done a lot of this research for you.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our ATM Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
What are the costs involved in opening an ATM Business?
While this type of business venture does not require an office space or a lot of supplies, there are a few things you will need to purchase. Total investment will be defined by how many machines you plan to start with. Each machine will cost between $3,000 and $10,000, depending upon the style you purchase. Each machine should have at least $2,000 in cash on a rotating basis. The only other items you should need is an insurance policy, a bag for transporting cash, tools for routine machine maintenance, and a reliable vehicle. Each machine must have access to a phone line or the Internet and you will need a computer for checking the status of each machine.
What are the ongoing expenses for an ATM Business?
Most machines require a minimum of $2,000 cash per week. Cash should be loaded in on a rotating basis. Many banks will charge your business a surcharge and merchants charge a monthly rent fee or commission, depending upon the contract both parties have agreed upon. New business owners are urged to conduct thorough research regarding your market, so that margins are correctly set from the beginning. This will help ensure higher profit margins for your ATM business.
Who is the target market?
Your ATM business is there to serve anyone who may need quick access to cash. Restaurants, bars, strip malls, convenience stores, and shopping malls are a great place to start.
How does an ATM Business make money?
An ATM business charges each customer a fee when they draw money out of their account.
How much can you charge customers?
The standard fee is $2.50 to $3.00 per transaction.
How much profit can an ATM Business make?
It’s important to choose high-traffic areas for your terminal locations. Successful business owners report an average of $500 per month, per ATM machine.
How can you make your business more profitable?
The more machines you have strategically placed, the higher your profits. Many new business owners find comfort in investing in franchises. Once you have learned the intricacies if this business venture, considering passing that knowledge on to new entrepreneurs by offering franchise opportunities.
Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your ATM Business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an ATM business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
ATM businesses should consider requiring clients to sign a services agreement before installing a new machine. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and so on.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
FInd out what types of insurance your ATM Business needs and how much it will cost you by reading our guide Business Insurance for ATM Business.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market an ATM Business
Unlike most business ventures, an ATM business requires little to no marketing. While you will not be directly interacting with your customers, you will communicate regularly with your merchants. Develop strong connections with them to ensure a long-term, mutually beneficial relationship. Networking with business owners in the community is a great way to ensure your name is recognized. When an entrepreneur opens a new business, your merchants will pass your name along, helping to solidify your business’ positive reputation.
How to keep customers coming back
It’s important to remember that each customer is coming to you out of convenience. Do not earn a reputation for having machines that are low on cash or always broken. Strive to deliver what they need, when they need it, at all times.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
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Is this Business Right For You?
Are you seeking a business investment that doesn't require an immense amount of time or investment? Do you enjoy interacting with other business owners throughout the community? If so, opening an ATM business may be the perfect business opportunity.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at an ATM Business?
The amount of time spent managing this type of operation varies, depending upon your skill set and the number of ATMs you own. Each machine must be kept in working order at all times. It should also contain enough cash to dispense 24/7. Anything less, and your business is losing money. Most ATM business owners have a regular route they tend to each day, where they check to ensure everything is working as it should. The rest of your team’s time is divided between administrative duties and nurturing relationships with vendors, banks, and the businesses that house your machines.
What are some skills and experiences that will help you build a successful ATM Business?
There is no formal training for owning an ATM business. Since this investment requires a significant amount of cash be on hand at all times, entrepreneurs must be skilled at handling cash and budgeting for future needs. A business degree or background is recommended. Strong interpersonal skills would also prove beneficial, as you will need to develop relationships with vendors, banks, and business owners throughout the community.
What is the growth potential for an ATM Business?
Consumers love convenience, making an ATM business a worthy long-term investment. The potential for growth is significant, as these small machines can be strategically placed wherever customers may need quick access to cash. A well thought out business plan will help you define and reach your short and long-term goals for growth and profit.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting an ATM Business?
Successful ATM business investors offer the following advice:
- Conduct thorough research prior to purchasing your machines. Choose one manufacturer and use them for all your machines. This will prove beneficial as you and your team learn how to repair and replace parts over time.
- While it will require more start-up capital, purchase a new machine with a 1-year warranty on parts. Older equipment leaves you open for potential issues and may not be equipped to handle evolving banking requirements/laws. .
- Make sure you understand EMV and that your machines are EMV compliant.
- Have each of your merchants sign an agreement.
- Map out your route with locations fairly close together to cut down on operating costs.
How and when to build a team
Most new ATM business owners start out managing the business alone. If your goal is to spread out over a large area, it may be necessary to hire additional team members for servicing. When considering hiring new team members, review their background and job history thoroughly, as they will be regularly handling a significant amount of cash. Additionally, each team member should have the knowledge and skills needed to perform routine maintenance on your machines.