First Steps to Creating a Business—ATM-Style
A quick Google search or AI prompt will provide you with a list of some general first steps to creating a business. These steps might vary slightly based on the type of business you want to start. However, you’ll find that even an ATM business fits the mold when it comes to basic business startup.
In this article, we’ll introduce some of the most basic, general first steps to creating a business and adapt them for the ATM industry. That way, you can see how similar starting an ATM business is to any other business. Then, we’ll cover some specifics that are unique to an ATM business. When it’s all said and done, you’ll know the first steps to take to get into business in the ATM industry.
First Steps to Creating a Business—Adapted for ATMs
Creating a business involves several critical steps to move from an idea to a functioning operation. Here’s a practical breakdown of the first steps for most businesses:
1. Define Your Idea
What’s your product or service? Clearly describe what you’re offering and the problem it solves.
As an independent ATM deployer (IAD), you’re buying or leasing ATMs, placing them in high-traffic locations, and earning revenue from surcharges users pay per transaction. You offer customers access to their bank accounts. For stores and businesses, you enhance their customer service, increase foot traffic and impulse purchases, save them money on credit card processing fees, and possibly offer an extra revenue stream.
Who is your target customer? Identify your ideal market or audience.
As an IAD, you’re looking for locations that have a need for ATM service. Small businesses, convenience stores, bars, salons, gas stations, or events without existing ATMs are good places to start.
What is your revenue model?
As the owner and operator of an ATM machine, your revenue comes from the surcharge fee. This is the transaction fee for using your machine and is typically $2.50–$3.50 per use. You might also possibly profit-share with business owners hosting the machine
2. Conduct Market Research
Who are your competitors? Look at businesses doing similar work and see how yours can stand out.
For an ATM business, you want to find gaps in the market. Installing an ATM machine in a location that already has convenient access nearby is going to affect your earning potential. If there are other ATMs nearby, you want to offer a competitive surcharge rate to pull more customers from other machines with higher fees.
When searching for a location to operate your ATM from, you might find that a store or business is already working with an ATM service provider. This can be a good opportunity to discover whether or not they are happy with the service they are receiving. If they aren’t, explain how you can solve that pain point.
Is there demand?
Find out the potential of a location by scoping out locations in person, having conversations with location owners, and conducting online research. Visiting locations can give you a sense of how busy a location is—the busier the better. Conversations with location owners can reveal their motivations or objections which can tell you a lot about a location’s potential. And online research can provide you with a map of potential competing locations and customer reviews.
3. Create a Business Plan
A basic business plan should include a summary of what your business is and what it will do. It might also include market analysis, a marketing and sales strategy, organization and management structure, and financial projections like basic budget and expected revenue/costs.
A simple business plan for an ATM business might look something like this:
- Start-up costs (ATM purchase/lease, cash to stock the machine, installation, etc.)
- Monthly operating expenses (maintenance, communication line, armored cash refill if outsourced)
- Expected transactions per month and projected income
- Growth strategy (e.g., 3 machines in Year 1, 5+ in Year 2)
4. Choose a Business Structure
There are three common types of business structures: sole proprietorship, limited liability company (LLC), and corporation (C-Corp or S-Corp). All can work for an ATM business, but the most common route is sole proprietorship.
While a sole proprietorship is simple, there is no legal separation from you and your business. An LLC, on the other hand, protects personal assets. Choose LLC for liability protection, tax flexibility, and to separate your personal and business finances. Finally, corporations are more complex and are more appropriate for large businesses or raising capital.
5. Register Your Business
Choose a business name after checking its availability in your state. Register it with your state government. Apply for an Employer Identification Number (EIN) with the IRS for tax and payroll purposes.
With a sole proprietorship, you can operate under your own name or a fictitious business name, a DBA—doing business as. You may not need an EIN under a sole proprietorship, but you will if you establish an LLC. Check out Forbes’s side-by-side comparison of the best LLC filing services.
6. Take Care of Legal and Tax Requirements
Get required licenses or permits (varies by industry and location). Set up a business bank account. Consider business insurance (especially liability or workers’ comp if hiring).
For an ATM business, you will need a business bank account. This is where ATM surcharge profits will be deposited and where your vault cash will be settled for you to withdraw to refill the machine. You may have two business bank accounts: one for your surcharge revenue and one for vault cash.
You will also need an ATM processor agreement. This is documentation of your partnership with an ATM processing company that will handle the communication between networks and transactions.
Insurance is optional unless the location owner requires it as part of the placement deal. However, it is a good idea to invest in general liability insurance to protect your equipment and liability.
7. Set Up Operations
Location: Decide whether you’ll operate online, from home, or at a physical location.
Website: Create a basic site or landing page.
Systems: Pick tools for accounting, invoicing, communication, etc.
With an ATM, you will probably operate out of someone else’s store, business, or other location. However, you can also rent a space in a shopping center or similar area.
There are many ways to establish an online presence as an ATM business owner. This can be a good way to get location owners coming to you to set up placements which saves you the time spent approaching them. You can create a website if you want, but sometimes a simple social media page can be effective.
You can also get a custom web page designed and featured on an already high-ranking website in, say, an “ATM providers near me” web directory. Borrow their search engine optimization to increase your own visibility, credibility, and lead generation.
And tools and resources you can use to help manage your finances, track profits, and record expenses include accounting software tools like QuickBooks, Wave, or Xero. You will also have access to remote online monitoring that offers reporting tools you can use to monitor transaction reports for performance insights.
Unique First Steps to Creating a Business in the ATM Industry
There are some general first steps to creating a business. These apply to almost any business, ATMs not excluded. We’ve adapted them for your convenience so that you know exactly how to apply each step to starting an ATM business. Now, it’s time to get into some specifics those basic first steps to creating a business didn’t cover:
1. Purchase Your ATM(s)
To operate an ATM business, you need to purchase the equipment. You can buy new or refurbished machines (costs range $2,000–$4,000 each). Make sure you choose EMV-compliant and ADA-compliant models that support remote monitoring and cash alerts.
2. Secure Locations and Contracts
Most IADs secure locations and contracts with existing businesses. Approach business owners and offer free machine installation and maintenance for a monthly rent (flat fee) or revenue-sharing (e.g., 30% of fees). Be sure to draft, agree on, and sign a placement agreement with each location that outlines the responsibilities of each party.
3. Stock and Monitor Your Machines
You can load cash yourself to save on armored truck service. While this adds another $2,000 or so to your startup budget, it is typically more cost effective in the long run. Install remote monitoring software to track cash levels, errors, and transactions. That way, you can manage your business off-site.
3. Market and Scale
Create a simple web page to establish credibility, generate leads, and open lines of communication. Create business cards and/or flyers to leave with more locations and leads. Consider adding more ATMs to your route as your revenue grows.
Now You Know the First Steps to Creating a Business ATM-Style
Now that you know the first steps to creating a business in the ATM industry, you can decide for yourself whether or not it’s really for you. If you’re still on the fence, remember that an ATM business offers benefits most other businesses do not: low overhead, little to no real estate costs, no employees, flexibility, and simplicity. What other job can you think of that makes you money while you’re doing something else altogether?
If you have questions or want to know more about the first steps to creating a business in the ATM industry, contact us today! With decades of experience, ATMDepot has worked with thousands of IADs just like you. It’s our mission to help anyone earn semi-passive income from operating ATM machines.