Running your own ATM business can be very profitable. But with several big players, banks and many experienced competitors already in the game, success can be elusive to a new owner. Guest columnist Jeff Sosville, Founder of ATM Brokerage, provides his insights on the 7 most important things you must do when setting up your ATM business.
Starting or Re-Tooling An ATM Business - What You Must Do
In spite of the advances in electronic, digital and alternative payments, cash is still a preferred means of paying for goods and services throughout the world. Recognizing this fact has prompted many entrepreneurs to strike out on their own and enter the ATM industry as independent owner/operators. If you are thinking about starting an ATM business, or are looking to make adjustments to your present business model, here are 7 things you must ensure are part of your process in order to maximize your chances for success.
1. Make a plan
As with any business, you will want to have a plan. Are you going to offer full service, processing only, or a mix? What is the niche you targeting? Bars, hotels, convenience stores, or something else? Going after high margin lower volume accounts or targeting high volume and potentially lower margin accounts? Decide how you are going to deploy, where you wan to be located and what your business focus is. Set a plan and potentially talk to an expert.
2. Understand the business
Do some research, talk to as many people as you can. Read and look into information online about how to start and grow an ATM business. Talk with processors, ISOs, merchants, retailers, consultants etc. This way you will have a complete and clear understanding of the ATM business.
3. Find a bank
With rules and regulations hitting the banking sector, it’s a good idea to talk to your bank and/or locally recommended banks and set up your relationship.
4. Find a processor
Look into and research ATM processors and offerings. If back office support important, then ask about that. Is web portal technology key for you? 24/7 technical support and service? What is the interchange and or buy rate? If you don’t know what these things are, find out.
5. Get signed contracts
Make sure when setting up relationships with merchants that you obtain a signed contract or agreement. The agreement should state the ownership of the ATM as well as the surcharge and split to the merchant. Try to get merchants to sign 3+ year contracts or minimally one-year recurring agreements. The key thing is to have something in writing.
6. Stick to one manufacturer
There are 4 main manufacturers in the independently deployed ATM industry. You should choose one and stick with it. This way, you know your machines and you understand how to repair and replace parts and you can substitute parts when needed. If you end up purchasing from many different manufacturers, your costs and learning curves go up exponentially.
7. Build your route with logistics in mind
Keep your locations as close to home as you can. The closer to home and to each other your locations are; the easier and less costly they are to service.
In many places the ATM is referred to as a cash machine. Turn your ATM business into a fleet of cash machines by following these proven steps to success.
Jeff Sosville is the owner and founder of ATM Brokerage. ATM Brokerage is a leader in valuation, consultation and buy/sell analysis for the ATM industry.