ATM Portfolio Valuations

As a person/company is growing their atm portfolio, you should always keep in mind of your exist strategy. Never forget that you can unlock amazing value by properly structuring your route and contacts. Today, if properly structured, you can get up to 18 months of monthly profits on a sale.

Some tips to think of:

Vault Cash: Many times, companies do not use armor car. While this cuts down on costs, it makes the value of your location less. For instance, by not having your atm setup for armor car, you are forcing that new owner to retrofit the atm with a new lock (ie cencon) or needing to replace the atm machine entirely.  This will greatly effect the valuation.

Contracts: This is the gold part. To unlock the most value, you need a solid contract with multiple years left on it. A good rule  of thumb is to have at least 3 years left on the contact, ideally 5 years. With more years left on the contract, you run a greater chance of getting a higher buyout price. Additionally, you can earn a even higher value if you can get the existing atm location to sign a new contract with the acquisition.

History: The longer the transaction history, the greater the value. If you have less than 6 months of transactional data, you will have a very hard time to sell it. Ideally, you want a solid year of transactions to show the seasonaility of the locations to the new owner.

ATM Hardware: If you are using an older model atm, or there seems to be issues with the atm, you might want to upate the parts. Or better yet, replace the atm entirely. When a new owner is looking to purchase, they look at ways to lower the price by additional work that they need to do.

So How Much Will I Get?
Ah, the question all atm owners want answers too. If you have

  1. Solid Contract – 5 years remaining
  2. ATM Machine is Armor Car Ready
  3. At least one year of transactional data

I can get you 15-18months of gross profits.
Example, you average 500transactions a month, $2 surcharge, with .50 per transaction going to the owner, that leaves you with a gross profit of $750. Assume .30 on interchange, brings us to $900 gross profit. This one location would get between 13k-16k

If we take that same example, but you it doesnt have armor car set up and/or has a small dispenser, the valuation could drop to 12-15 months.

Those are generally not the deal breakers. The deal breakers generally revert back to the contract. This will make or break the valuations of your portfolio. Many atm companies feel their locations are worth more. Thing is, its only worth what someone is willing to pay for it. By trying to cater to the buyer AS MUCH AS POSSIBLE, you run an excellant chance of coming through with a proper sale!

If you have portfolios you are looking to sell, or would like some additional information on setting meetings up with buyers (all under an NDA), feel free to contact me : Contact the author: ATM Business Author

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The Interchange Game

Interchange is a funny thing within the atm business. Many companies dont want to give it away. Reason being, its easy money. For each transaction, your buy rate determines what you’re getting. I remember one of my models consisted of being a middle man between store owner and atm owner. I would ask for part of the interechange. Many didnt want to do it, but the alternative of paying an upfront fee is much worse.

In the end, interchange is a small portion of the picture. It comes down to what your giving out (interest rate cost, store owners cut, tech calls) and what your bringing in (surcharge to atm owner and interchange to atm owner). You have to use EACH variable to increase your bottom line.

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Cut Throat ATM Business

Many atm companies are seeing many agreements being broken. You have an atm company, and a store owner. The ATM placement agreement is important, but VERY few of them are enforceable. Why you ask? Many atm companies just use a standard template. A hand me down from one atm company to another. This unfortunately gives you a false sense of security. A store owner can very easily break 99% of any atm placement agreement out there.

If you want to do it right, make sure you cover ALL your basis. Make sure services and performances are written carefully…. its notmally the easiest way for store owners to get out of atm contracts.

Contact the author: ATM Business Author

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Getting into the ATM Business is Easier Than Ever!

For all those entrpreneurial individuals that are looking to get into the atm business, the time is now! The cost of an atm machine, a new one,  is less than a 2,000 (and thats for a good quality one). Interest rates are extremely low. If you’d rather not layout the capital to buy a machine, there are many companies that will allow you to lease it for less than $75 a month.

ATM Service
From a service side, there are many techs that are always looking for work (especially if you are in or near a major city). You can contact them at any time if and when an atm goes down. Their costs are significantly lower than going through a major organization.

Money for ATM Machines
Now, this is the main aspect. If you’re able to be on top of your cash flow, you can flourish in this business. In some instances, its worth tapping into your line of credit to use it as cash for the atms.

Quick Math:

250 transactions @ $2 = $500
.50 transaction paid to store owner = $100

One tech call a month 
(which I divided by 2,
since its really once
every 2 months)    =    $50

That leaves you with a profit of $350 (not including interest charges if you are borrowing money).
That means you get the cost back of the atm machine is less than 6 months.

If you are having trouble finding atm locations, there are business out there that will secure them for you (this will of course come at a cost, and normally a hefty one). Might be something worth looking into the first atm you get.

Remember, if you build the ecosystem around you properly, you can flourish in this business

Contact the author: ATM Business Author

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Digital Signage Show in NY was a Hit

I was lucky enough to attend the kiosk and digital signage show at the Jacob Javits Center in NY last week. I was able to see some of the neat technology that was out there. There was even a company that created their own atm machine, with an integrated screen. IMO, still some work that needs to be done, but the concept was neat ( a nice change to the boring WRG ones out there).

My personal favorite is the ability for a sign to determine your sex, and estimate your age within a 7 year range. Very powerful from the advertising and marketing perspective. Another neat item is the “stretch screen” from LG. You have a “stretched” out screen with a minimal height. Helps generate user focus given the appearance

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Paperwork Headaches

Year after year, it seems that the paperwork and additional logistics pushed down to ATM Vendors is increasing. While this is time consuming and ultimately adds to your cost, its in your best interest to take care of these as soon as possible. The networks are holding atm owners liable for anything not done properly . Fees are extremely steep, could even justify you leaving the business!

Like always, keep a close relationship with your distributor(s). Be on top of the game and prosper

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Competition is Getting Fierce

The atm industry is getting tight. The independant owner needs to be careful. With many atm contracts up for renewal, you are seeing a trend of store owners breaking out of contracts to get a better deal. This brings up a critical point. Relationships Count!

Make sure you have a good relationship with the store owner. Not just some monthly statement and check being sent out. A vendor will come in to sway that store owner with better payouts, fancier signs, and additional promises. It’s imperative that you have a good relationship with the owner. Period

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Armor Car Options

If you’re looking for a national solution, your are limited to the Big 3, Pendum, Brinks, and Loomis.The last two, they just arent cheap. If your locations generate a significant amount of revenue , then it will be worth considering. There is another option, but it will take more management efforts on your end. These are the metrio regional carriers. I know in the Northeast, Mt. Vernon Money Center (MVMC) are very efficient and reliable.

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Surcharge Increase Helps ISOs

With all the banking surcharge increases, it looks like the independant atm owner is gaining ground. If you take New York City for example, Bank of America and CitiGroup have higher surcharges than the surrounding independant atm machines. This is becoming extremely attractive from a convenience standpoint, along with the down international economy

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Install Your ATM w HEMI

When drilling tile, its best to  avoid drilling into the cracks. Go directly through the tile. For wood, I
drill through the wood, use large washers, and  drop carriage bolts.

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