Starting an ATM Business: 8 Mistakes to Avoid
You’ve made the decision to start your own ATM business – congratulations! This can be a profitable endeavor if done correctly. However, there are some common mistakes new business owners make. Avoid these 8 errors to set your business up for success:
- Overestimating Cash Flow
While some sources online promise $500+ per month from each ATM, these numbers are often inflated. For planning purposes, estimate $250-$300 per ATM on the high end, or $150-$200 on the low end. Talk to merchants to get realistic income expectations.
- Buying Used Equipment
Purchasing used ATMs may be tempting, but isn’t advisable for a new business. Invest in new machines under warranty to avoid maintenance issues and to ensure you meet industry requirements like EMV compliance.
- Underestimating Capital Needed
Have ample working capital – estimate needing at least $2,000 per week per ATM to keep them loaded with cash for customers. Scale this number accordingly as your business grows.
- Failing to Understand EMV
Research EMV standards thoroughly so you buy compliant hardware upfront rather than paying more down the road. Newer machines sold typically include EMV technology.
- Not Securing a Bank First
Contact banks beforehand to confirm they support the ATM industry. Some banks decline this business type due to past fraud issues. Get this relationship solidified early.
- Setting Margins Too Low
When negotiating surcharge fees and merchant commissions, don’t undervalue your services. Price appropriately based on market rates while still maintaining profitability. We recommend no more that 30% of the surcharge.
- Lacking Signed Contracts
Formal agreements protect relationships with merchants should issues arise. Contracts also make your business more valuable should you look to sell down the road.
- Choosing Poor Locations
Strategically place ATMs close together in your target geography to minimize service costs and drive an efficient route. This makes your business more operational and appealing to future buyers.
Starting an ATM company takes research, planning and strategic decision making. Avoid these common mistakes as you establish your business for the best chance of ongoing profitability and success.
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Looking to buy an ATM Location? Greenpoint ATM Solutions can help. We actively sell new ATM placement contracts.