Is an Automated Teller Machine Business an Excellent Investment?
Owning an Automated Teller Machine can be an excellent venture as it can create a good flow of passive income (work a couple of hours per week) and run from the comfort of the owner’s home (low overhead cost). But it can also be a bad idea if owners make bad decisions along the way.
Sellers of these kinds of enterprises tell potential buyers how much money they can make, fifty thousand dollars per year traveling the world while their devices do all the hard work. In reality, some investors have been pretty successful, but there have been unfortunate souls in this industry as well. The ATM business, as well as the financial system, are going through tons of changes that ATM business buyers need to consider. There are three options for starting this type of enterprise:
- Purchase an existing location
- Start the business from scratch by buying and placing devices yourself
- Purchase an Automated Teller Machine franchise
If an individual has the funds, purchasing an existing location is the easiest way to go since ATMs are already in place. Finding a location that has tons of foot traffic is 99% of the venture’s success, so if individuals have the funds, purchasing a route is the best and quickest way to set up the business.
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If we take a closer look at current listings for this type of enterprise on the market at the top part, we can see $900,000 for a big route with at least 150 locations that generate at least $300,000 per year in passive income. Always keep in mind that servicing 150 devices will be a full-time job, not like when you have a minor route.
If we take a closer look at these more minor routes, we will see listings like seven device Automated Teller Machine enterprises selling for at least one-hundred thousand dollars, with sales revenue close to forty thousand dollars per year. Individuals can also find single-machine locations for sale at around twelve thousand dollars.
Before investing, individuals should keep in mind that they also need cash to put in the cash dispensers above their initial investment; bigger locations with more than one device will need a lot of money. The amount owners will put into the device will differ depending on how busy their location is, but two thousand to three thousand dollars should be a safe rough estimate.
If their ATM runs out of money, they do not make any income; that is why they need to make sure it is stocked every day. Any machine that is not Americans with Disabilities Act compliant can result in penalties of more or less $50,000, so they need to make sure their devices are to code. Owners should also learn how to install the device, who can repair them when they face some issues, how to replace receipt papers, and more.
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Do business owners know what places or locations are good with tons of foot traffic? Do they have the credibility to get their devices into premium locations? For instance, a bustling airport is not taking the rusty ten-year-old Automated Teller Machine that the owners just paid four hundred dollars for.
In this case, franchises have advantages with existing relationships with big national organizations that can help owners get their foot in the door. They will pay franchise fees and premiums, but they should make that back through good placements.
The Third option
Purchasing a franchise can help individuals with negotiating the best possible rate, training on the enterprise in general, as well as placement. Entrepreneurs should have about sixty thousand dollars minimum to start the franchise. Their franchise fee is around twenty-five thousand dollars.
They will need at least two machines and at least seven thousand dollars in cash to load their Automated Teller Machines. Owners will also spend money on tech support for ATM machines in case of repairs or maintenance. Again, they will pay franchise fees, as well as ongoing fees in franchise situations, but some individuals have found that it helped them create their enterprise a lot faster and on larger scales compared to going solo.
Is it a good investment?
There is no doubt that cash transactions are starting to decline. Today, cash accounts for only twenty-two percent of all transactions, and it is possible that cash dispensers will disappear in the next twenty years. During the COVID-19 pandemic, cash transactions dropped drastically.
The public prefers to use their cards or mobile apps to pay for goods and services, and some companies only accept touchless payments, debit cards, or credit cards. With that being said, if individuals get an excellent price on an existing Automated Teller Machine route or excellent locations, there’s still money to be made in the next couple of decades.