There are a number of questions to ask when starting a business to make sure you have a plan and clear expectations. You don’t want to go into business blind, so asking yourself the right questions can help you prepare for success.
Here, we have 15 questions to ask when starting a business. While these questions usually apply to conventional small businesses, they apply to ATM businesses too.
An ATM business is unconventional in the sense that you aren’t selling a product, you don’t work directly with the public, and you don’t own your own location. But an ATM business owner has many of the same responsibilities as any other business owner.
There are certain universal considerations, decisions, and liabilities that go into starting a business. We’ve tried to summarize them here so that you can go into business for yourself as an ATM owner with a clear direction and no surprises along the way.
1. What is my business idea and expectations?
The first of many questions to ask when starting a business is what your idea and expectations are. There are many ways to start a business in the ATM industry. So what aspects appeal to you the most?
Do you want to own and place your own machine? Do you want to start a route of many machines? Would you rather sell machines to locations that want to operate the ATM themselves? Would you like to negotiate placements for other ATM owners? Do you just want to sell a service to other ATM owners like vaulting or technical support? Are you interested in getting into Bitcoin ATMs?
Once you have a clear idea of your business goal, you can start taking the appropriate steps in the right direction. Managing your expectations early on can save you time and money you’d spend changing your mind mid-way through the start-up process.
2. Is there a market for my service?
Your business idea might (and should) depend on the market. Consider where you live and what opportunities are available to you. If you live in a small town, you might have better success operating your own machine than trying to manage others as there might not be many other independent ATM deployers (IADs) in your area.
You also want to consider the placement of an ATM machine. Are you able to identify a gap in the market? Is there an area with a clear need for ATM service? Are there ATMs in your area that are often out-of-order, outdated, or poorly managed?
These are questions to ask when starting a business in the ATM industry so that once you have your machine, you know where to put it and how well you expect it to perform. An ATM machine with no transactions won’t make you any money.
3. What are the initial startup costs?
You want to think about the initial startup costs of starting your business so that you know how to budget for and fund your business. As an IAD, you’ll want to plan for the costs of ATM equipment, installation and programming, and vault cash.
4. What are the ongoing expenses?
After the startup costs, how much should you expect to deduct from your revenue in operational costs? This might include ongoing maintenance, wireless service, insurance, and any revenue you share with other parties like the location owner.
Not every ATM business has the same ongoing expenses. Some you will want to budget for right away; others you can add once you start making money. You may or may not have a revenue share, but you’ll figure that out when you negotiate the placement. But it’s good to have some money set aside for maintenance costs like technical support, tampering or vandalism, and cleaning supplies.
5. How will I fund my business?
Once you have a good idea of the initial costs of starting an ATM business, you’ll need to figure out how to fund it. If you already have a few thousand dollars saved up, you can fund the business yourself. Fortunately, ATM business startup costs are relatively low, so you should be able to fund the business with your own money, via credit card, or through a loan from a friend or family member.
6. What legal structure is best for my business?
You might need to decide whether to register as a sole proprietorship, partnership, LLC, corporation, etc., based on legal and tax implications. You will want to set up your business bank account under this entity. A simple route for IADs is to create a sole proprietorship or an LLC and get a fictitious business name, a “doing business as” (DBA), to avoid conducting business under your own name.
7. What technology and tools do I need?
Operating your ATM machine will require some technology and tools. Some are nice-to-have and others are need-to-have. For example, the installation will require certain drills and bits. But you don’t have to handle the installation yourself. If you hire this part out, you don’t have to worry about procuring the installation tools.
Technology that is nice-to-have might include cameras for surveillance or a wireless router to avoid relying on a location’s unpredictable internet service provider.
Technology that is need-to-have is remote online monitoring. You will want to be able to track your ATM activity from anywhere 24/7. This will help you keep your assets safe as well as keep your machine up and running without any lapses in service.
8. How will I handle day-to-day operations?
Just like you can choose what role you want to play in the ATM industry (IAD, vaulter, technician, etc.), you can choose which aspects of your business to handle and which to hire out. It depends on your level of comfort, how much time you have/want to invest in your business, and how much profit you want to make.
For example, you can hire someone to vault your machine for you, or you can do it yourself. Just weigh the costs of hiring someone else against the amount you are willing to “pay yourself” for taking the time to handle that aspect of the business.
9. What is my unique value proposition?
This question requires you to identify what sets your business apart from competitors and why customers should choose you. Now, as an ATM owner, there are two ways to look at this:
First, you want to consider the value you offer to the location where you will place your machine. Will your ATM bring in new business? Will it add a much needed service to existing customers? How will the location financially benefit from having an ATM on the premises? These are questions to ask when starting a business so that you know how to approach location owners with a proposal to place an ATM machine on-site.
Second, you want to consider the ATM users. Why should passersby use your machine rather than one a couple of blocks down or at the bank? Can you offer better security? A competitive surcharge fee? Coupons? Superior customer service? Ask yourself these questions, and then do it.
10. How will I handle customer service?
Again, you have two angles to consider here:
How will you ensure that the location owner does not have any problems working with your or your machine? Will you be available to handle any unexpected issues? Do you have a partner or someone you trust to act in your stead if you have to be away? How quickly will you be able to address any problems?
Do you have a process in place for handling customer complaints? What happens if there is a discrepancy with a withdrawal? What if there is a security concern? Is it clear who users should contact and how? Answering these questions early on will save time and money later.
11. What is my pricing strategy?
Really, as an IAD, the only pricing you need to worry about is the surcharge fee. You want your surcharge fee to be low enough to encourage transactions but high enough that you make a decent ROI and profit. There are a number of factors to consider when setting your surcharge fee including any preferences of the location owner and revenue share.
Remember that your surcharge fee can change, too. You might start low to encourage traffic and then raise it once it’s steady. Or you might start high to reach your ROI quicker. Monitor the activity and trends and adjust the surcharge fee accordingly to find the “sweet spot” that satisfies both the customers and your own business goals.
12. What is my marketing strategy?
When you have your ATM installed and ready to go, you’ll want to think about advertising it. People can’t use your ATM if they don’t know it exists. So how will you encourage transactions? Thinking about this early can help you get a head start and budget extra features into your startup costs.
For example, you might want to invest in a topper for your ATM machine, custom graphics, and/or a light-up ATM sign for the location window. Speak with the location owner as well to see about offering coupons to encourage transactions and increase in-store sales.
13. What is my growth strategy?
Depending on your business goals, you may or may not plan to grow your business. However, if you do, you will want to think about your growth strategy early to better manage your expectations and work toward that goal purposefully.
You could grow your business by offering additional services (vaulting, placement, technical support, etc.) or by adding more machines to your route. There is nothing wrong with managing just one machine. But the more machines you operate, the more profit you will earn.
14. How will I measure success?
It’s important to set goals for yourself in any endeavor, especially in business. Otherwise, how will you be motivated to keep going? Make a list of SMART goals so that you always know what success looks like, how to achieve it, and how to measure it. Then, you can make adjustments along the way as your business improves, you learn more, and your financial and other goals evolve.
15. What are the potential risks and how will I mitigate them?
Finally, one of the most important questions to ask when starting a business is how to mitigate potential risks. Predicting and planning for risks early not only helps to minimize disasters but also helps overcome obstacles that might be standing in your way of taking the next step.
Having a plan for the worst case scenario can help put your mind at ease knowing that there’s nothing you can’t handle. Whether it’s a technical problem, a security issue, or a breach of contract, document a procedure you can use to address it. There’s a good chance you’ll never have to, but it’ll be worth it for peace of mind.
Conclusion
Hopefully this extensive list of questions to ask yourself when starting a business makes the journey smoother for you. We’ve tried to think of everything so that you don’t have to. You don’t have to have any specialized knowledge or training to start an ATM business. But we know that not knowing what to expect can keep many people from taking that first step. And encountering unexpected barriers along the way can keep them from taking the next step.
If you work with ATMDepot, you will receive all of the support you need from choosing the right equipment to negotiating placements to ongoing technical support and business advice. What are you waiting for? Get your ATM business start-up kit today!