Do You Need an LLC for ATM Business?

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Do you need an LLC for ATM business? This is a question commonly asked by new ATM entrepreneurs. It’s also asked by entrepreneurs who might have been in business for a while but are questioning whether or not they need to maintain their LLC. 

The short answer is, no; you do not need an LLC for an ATM business. You have other options. Each option has its own legal, tax, and operational considerations. Therefore, it’s important to research and consult with professionals to determine the best fit for your ATM business based on your goals, preferences, and circumstances.

Every business requires some documentation. While you don’t need a specific license to operate an ATM business, you will still need some sort of business name to complete the agreement with the ATM processor as your ATM vendor and to open a business bank account. Here, we’ll discuss what an LLC entails as well as a glimpse into some alternative options. 

What is an LLC?

LLC stands for limited liability company. It offers limited liability protection and more tax options which other alternatives do not. There are three main benefits an LLC offers.

Limited Liability Protection

One of the primary reasons for forming an LLC is to separate your personal assets from your business liabilities. If someone were to sue your ATM business, having an LLC can protect your personal assets from being at risk. This means your car, house, bank account, etc. are protected in the event your business is sued, is bankrupted, or defaults on a loan. 

There are a number of situations where you might find yourself at risk of liability. Limited liability ensures that, regardless of the outcome of the lawsuit, your personal assets are not threatened. And if you end up struggling to pay back a loan on time and accrue significant debt, your personal assets will remain safe regardless of whether your business pays back the debt as long as you didn’t personally guarantee the loan. 

Tax Considerations

Another benefit of an LLC is tax benefits and options. LLCs offer flexibility in how they’re taxed. By default, they are pass-through entities, meaning profits and losses pass through to your—the owner’s—personal tax returns. This can offer tax advantages depending on your situation. The business’s net income is then subject to income taxes (based on your tax bracket) and self-employment taxes.

A sole proprietorship or partnership is taxed in the same way, but an LLC offers the S-corporation (S-corp) option. An S-corp is an IRS tax status that an LLC can elect which allows business owners to be treated as employees of the business. This can lower self-employment taxes and will allow you to contribute pre-tax dollars to 401k or health insurance premiums.

Whether or not you think you might want this tax option depends on how much your business can/will pay you, the employee-owner. To really benefit from an S-corp, you should expect a reasonable salary of at least $10,000 in distributions a year for the work you perform.

Credibility

Finally, operating as an LLC can convey a sense of professionalism and legitimacy to potential customers, partners, and investors. This can be especially important when negotiating a placement agreement. In order for business owners to agree to share a space of their location with your ATM and to work with you, you’ll need to establish trust and credibility. 

So, do you need an LLC for ATM business? No, but it might be a good idea. It really depends on the scale of your operations, your risk tolerance, and your specific business goals. 

How Much Does an LLC Cost?

Setting up and maintaining an LLC involves some costs and administrative tasks, such as filing articles of organization, annual fees, and potentially more complex tax filings. In addition, with an S corp, your business might need to spend more on accounting, bookkeeping, and payroll services.

While the cost of starting an LLC varies by state, the average cost to form an LLC is $129, while the average annual cost to maintain one is $104. However, other optional LLC costs can range from just $35 to hundreds of dollars a year.

Formation Fees and Publication Requirements

When forming an LLC, you’ll typically need to pay a fee to the state where you’re registering your business. The fee amount varies depending on the state but can range from around $50 to several hundred dollars. 

In some states, newly formed LLCs are required to publish a notice of their formation in a local newspaper. This requirement can add several hundred dollars to the formation costs.

Registered Agent Fees

Most states require LLCs to designate a registered agent who is responsible for receiving legal documents on behalf of the LLC. You may choose to hire a registered agent service, which typically charges an annual fee ranging from $50 to $300 or more.

Operating Agreement

While not always required by law, it’s highly recommended to have an operating agreement in place for your LLC. This document outlines the ownership structure, management roles, profit distribution, and other important details of the business. You can draft the operating agreement yourself and save hundreds of dollars on hiring a lawyer for this. 

Annual Fees

Many states impose annual fees or franchise taxes on LLCs to maintain their active status. These fees can range from a nominal amount to several hundred dollars or more, depending on the state.

Business Licenses and Permits

Depending on your location and the nature of your ATM business, you may need to obtain various business licenses and permits. The costs vary widely depending on the type of licenses and permits required.

Tax Filings

LLCs are typically required to file an annual report with the state and may need to file additional tax returns depending on their tax classification (sole proprietorship, partnership, S-corp, or C-corp). You may choose to handle these filings yourself or hire an accountant, which can add to your expenses.

Ongoing Maintenance

LLCs have ongoing administrative requirements, such as holding annual meetings, maintaining accurate records, and filing necessary reports with the state. While these tasks can often be managed internally, they require time and attention.

While this sounds like a lot, it is important to remember that consulting with legal, financial, and ATM industry professionals can help you navigate the process and ensure compliance with applicable laws and regulations. The process of establishing and maintaining an LLC really depends on the complexity and scale of your business.  

Alternatives to an LLC

Sole Proprietorship

The most common way new independent ATM deployers (IADs) start their businesses is by creating a sole proprietorship and operating under a fictitious business name, or a DBA—doing business as. You will be able to open a business bank account with this as well as be able to set up the vendor relationship for your business with the ATM processor.

While an LLC automatically establishes some credibility, you can also gain this with a sole proprietorship by “borrowing” another company’s name, like your ATM processing company. Some companies will license you the right to use their name as part of your company name. This often requires additional paperwork and a fee for usage rights, but it is an option for making a good impression when you are just starting out.  

This is the simplest and most common form of business structure. In a sole proprietorship, there’s no legal distinction between the owner and the business. It is easy to set up and operate, but you have unlimited personal liability for the business’s debts and obligations. However, some common liabilities can be covered with general liability insurance.

Partnership

If you’re starting the ATM business with one or more partners, you could form a general partnership. Like a sole proprietorship, a general partnership doesn’t provide liability protection for the partners. However, there are also limited partnerships (LPs) and limited liability partnerships (LLPs) that offer some liability protection for certain partners.

Corporation (C-Corp or S-Corp)

Corporations are separate legal entities from their owners, providing limited liability protection. C-corps are taxed separately from their owners, while S-corps are pass-through entities for tax purposes, similar to LLCs. However, corporations have more formalities and administrative requirements than LLCs.

Do You Need an LLC for ATM Business?

If you want to know do you need an LLC for ATM business, think about your business goals. If you want to purchase and place multiple ATM machines and develop an extensive route, then an LLC may be worth your time and effort. 

The more machines you operate, the more you increase your business risk. The more people you work with, the more customers you serve, and the more opportunities there are for something to go wrong. If that happens, you’ll want to be protected by an LLC.

However, if you are just starting small and aren’t sure yet where your ATM entrepreneurship journey will take you, there’s not a huge need to establish an LLC. Keep it simple and start with a sole proprietorship. It’s easy, it’s common, and your business likely will have a relatively low level of risk.

If you want to know more about starting your own ATM business, check out ATMDepot.com’s ATM Business Road Map, or contact us with any questions you might have!

ATM Cash Machine Business vs. Vending Machine: Which Is a Better Side Hustle?

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An ATM cash machine business and a vending machine business are two side hustle options that can earn you a semi-passive income. So which one is better? 

At the end of the day, it is up to you and your personal goals, experience, and comfortability that will affect your decision. However an ATM cash machine business can be a simpler venture in many ways. Here, we’ll provide you with a side-by-side look at some considerations of each.

Why Are ATM Cash Machine Business and Vending Machine Business Good Side Hustles?

An ATM cash machine business and a vending machine business are similar in many ways. Both businesses involve the purchase, placement, operation, and maintenance of one or more machines. 

Compared to traditional retail businesses, ATM cash machines and vending machines typically have lower overhead costs. There is no storefront rent, utilities, or a large staff; just the equipment and product.

The success of each is dependent on the quality of the location. Finding a quality location requires research into the target demographic, market gaps, and amount of foot traffic.

Since there is no storefront rent, both businesses, therefore, require placement negotiations. You will have to partner with other business or location owners or renters by appealing to them with the extra service you can offer to their customers.

Additionally, both businesses offer semi-passive income. This means that you can be making money while you do other things: work another job, pursue hobbies, sleep…. But you will still have to monitor the activity on your machine, making sure it’s stocked, operational, and generating revenue.

Then, of course, there is ongoing maintenance for both. You might have to troubleshoot error codes, handle customer complaints, make sure the machine is clean and presentable, and address any tampering, vandalism, or damage.

However, while both an ATM cash machine business and a vending machine business involve automated transactions and generate revenue through user interactions, there are several important differences between the two.

Key Differences Between ATM Cash Machine Business and Vending Machine Business

Product Offering

The most obvious difference between an ATM cash machine business and a vending machine business is the product offering. One offers convenient access to cash while the other offers food and beverage. 

A vending machine business generates revenue based on the sale of the products it offers. An ATM cash machine generates revenue from a service fee, or a surcharge. Customers pay for access to the service, but they essentially receive that which already belongs to them. An ATM doesn’t sell anything per se.

An ATM cash machine business is simpler in this respect. The only “product” you work with is cash. The only metrics you need to monitor are how much cash is needed and at what times. This allows you to ensure that your ATM machine has enough cash to meet the demand during the times of highest need (maybe weekends, holidays, local events, etc.). 

There are a lot more factors to consider with a vending machine. For example, will you offer snacks or drinks? How much of a variety will you offer? Which product(s) sell more frequently than others? You need to strategically select and monitor the products that appeal most to your target demographic.

The same is true of an ATM cash machine business but on a much more limited scale. For example, most ATM machines offer a single denomination (20s), though you can opt for two denominations.

But that’s pretty much it. With an ATM cash machine business, your biggest stocking concerns are which denominations to offer and when the busiest cash-demand times of the month are.

Market and Placement

While product offering is limited to an ATM cash machine business, the placement options are more diverse. And that’s a good thing.

Vending machines are commonly placed in offices, schools, hospitals, gyms, and other public spaces. ATM cash machines, however, succeed wherever there is a need for cash. 

Vending machines typically require locations where large numbers of people congregate for a long duration of time. ATM cash machines do well in similar locations, like shopping centers, bars, and casinos. But they also do well in areas where people are simply passing by, like markets, convenience stores, and parking lots. 

ATM cash machines are also more versatile in that they can be placed indoors or outdoors. This offers 24/7 access to your service which allows you to make more money. 

Finally, ATM cash machines can be easier to place than vending machines. First of all, you aren’t limited to large venues that necessitate vending machines. You can appeal to salons, restaurants, and other small businesses which expands your options. 

And, business owners are motivated to add an ATM cash machine to their location for the benefits they’ll see in return. The added service can bring in more traffic, increase sales, and encourage cash payments which saves the company money on credit card transaction fees.

So while both businesses rely on placement negotiations with other businesses, the process and options vary greatly.

Regulatory Compliance

Just like any other business, an ATM cash machine business and vending machine business will have to comply with industry regulations. 

Operating a vending machine business may require adherence to various regulations and permits, depending on the location and types of products sold. Ensuring compliance with health, safety, and licensing requirements can add complexity and administrative burden.

ATM cash machines must meet regulation guidelines according to the Americans with Disabilities Act (ADA). But new machines are already designed to meet these requirements, so most of that burden is off your shoulders! All you need to do is make sure there is a clear path to the machine and that all functions are accessible.

Conclusion

While both vending machine and ATM businesses offer opportunities for generating passive income through automated transactions, they involve different products/services, target audiences, revenue models, and operational considerations. Carefully evaluate these factors to determine which type of business aligns best with your goals, resources, and risk tolerance.

An ATM cash machine business is simpler than a vending machine business in many ways which can make it a better side hustle. And what’s more is there is a risk-free training program available to you to get started in the ATM business from the ground up. 

If you want to start making money while you sleep, find out everything you need to know from ATMDepot.com’s own CEO and founder, Noah Weider with the ATM Business Road Map. With the right information, tips, and support, starting an ATM business has never been easier. Get started today!

7 Benefits of Getting an ATM Business Mentor

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A business mentor is a valuable resource in any industry. Having a mentor provides you with access to years of experience you don’t already have if you are just getting started. When starting a business, you don’t have to reinvent the wheel. Learn from others’ mistakes, repeat what works, and be humble enough to ask for help and admit when you don’t know something. Otherwise, your path to success will likely be a long and rocky one.

An ATM business is no different. Any business mentor will be able to give you business advice to a certain extent. There are some ins and outs that all businesses share. But a business mentor with specific ATM industry experience is a rare find. 

If you’re interested in generating passive income with an ATM business, you’re in the right place. In this article, you’ll find out all of the value an ATM business mentor can provide as well as how to get access to your own ATM business mentor who will be by your side every step of the way.

1. Get Answers to Your Questions  

One of the obvious benefits of an ATM business mentor is having someone to answer all of your questions. Yes, you can find answers to your questions from a variety of sources. But how long will that take? 

You might not find an answer that applies to your unique situation. You might come across outdated or incorrect information. And if you enlist the help of other individuals, you are at the mercy of their busy schedules.

Basically, having a dedicated ATM business mentor provides you with timely, reliable answers to your questions. You will rarely, if ever, have to spend time interpreting and discerning the different opinions you will get from a basic internet search or forum.

2. Avoid Mistakes

Plus, you don’t know what you don’t know. Without an ATM business mentor, how do you know whether or not you’re asking the right questions? Some of your questions might only arise after a mistake has been made and needs to be fixed. 

Without an ATM business mentor, you will make common mistakes that are easily avoidable. What you need is someone to give you a heads up! A good business mentor knows what you should do, but also what you should not do. This can save you time, money, and unnecessary stress.

3. Get Started Faster

There is a lot to do when starting an ATM business. You have to complete all of the necessary paperwork, get a business bank account set up, establish a location, purchase equipment…. That’s a lot of steps and a lot of new territory to navigate. 

But do you know what happens when you work with an ATM business mentor? You get started faster! Given your financial circumstances, how soon do you need to start making revenue? The longer it takes you to get started, the longer it will take to start making money.

Working with an ATM business mentor can help streamline the process. It can also help keep you accountable. That way, if you start to feel lost or overwhelmed, you’re less likely to abandon the idea altogether. So rather than waste time and resources trying to go it alone, invest in an ATM business mentor to increase your chances of success.

4. Make More Money

The sooner you get started, the sooner you can start making money! You will also save money by avoiding simple mistakes. The less money you have to put into your business, the more you get to put in your pocket.

And the smoother your business runs, the better your service will be. This will earn you more contracts, more customers, and before you know it, you’ll be making a steady flow of passive income.

5. Receive Ongoing Support

It’s important to remember that once your business is up and running, your questions and learning won’t stop there. Parents don’t send their kids off into the world once they learn to walk; there’s years of development in between.

Having an ATM business mentor ensures that you aren’t alone in your business once you’re operational. When extenuating circumstances arise, you will still want someone there to guide you through your situation. 

Your business will change over time, too. You might want to adjust the role you play in your business. You might want to scale your business. These changes will be easier and smoother with an established ATM business mentor who can help you make the best decision for you based on your unique situation and goals.

6. Borrow Authority

It can be difficult to gain clients and customers without any previous experience. Many people fall victim to imposter syndrome, wondering how they can assure people that they are serious, dedicated, and professional without any proof to back it up. 

This is where borrowing authority comes in handy. If you can align yourself with someone who is well-established, people will feel more comfortable with you and will take you more seriously. It also proves that you have access to the knowledge, tools, and resources you’ll need to do a good job. 

Aligning yourself with someone who has years of experience provides you with access to more and better networking opportunities, too. If you are ever in a position where you need to connect with other industry professionals, your ATM business mentor will know just where to look and who to call. They can introduce you to valuable contacts, potential clients, or partners, which can open doors for your business.

7. Try the Business Risk-Free

Finally, working with an ATM business mentor can allow you to explore various aspects of the business before jumping right in. This way, you can determine whether or not an ATM business is right for you before you get started. 

There are some questions you will have and things you will want to know before you invest your time and money. If you take advantage of the ATM Business Road Map, for example, you get access to mentorship from ATMDepot.com’s own founder and CEO, Noah Weider, with a 30-day money-back guarantee.

That means that if after 30 days (or 3 out of the 9 modules) you don’t think the ATM business or mentorship is right for you, then you haven’t lost anything!

Conclusion

Overall, having a business mentor can accelerate your learning curve, increase your chances of success, and provide invaluable support throughout your entrepreneurial journey. You don’t have to look any further for an ATM business mentor. The ATM Business Road Map has everything you need to get you started in the ATM business plus ongoing support throughout your business journey.

If you are looking for an ATM business mentor, Noah Weider is a trusted name in the industry with years of experience behind him. He is motivated by the growing need for successful local ATM business owners and operators who know what they’re doing. If you’d like to generate a couple grand a month in residual income, you can get started today!