Yes, your ATM business will need to hold any local, state, and federal registrations required for businesses. Most businesses need to have a sales tax permit, Employer Identification Number, and Occupancy Permit, among others. Some states may require specific ATM vendor permits in addition to these standard permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
While this type of business venture does not necessarily need an office space or a lot of supplies, there are basic things you will need to purchase. However, your total investment will be defined by how many machines you plan to start with. Each machine will cost between $3,000 and $10,000, depending upon the style you purchase. Each machine should have at least $2,000 in cash on a rotating basis.
Another item you should need is an insurance policy, a bag for transporting cash, tools for routine machine maintenance, and a reliable vehicle. Owning your own ATM business is often promoted as a passive income opportunity; however, there is still work to be done as you will have to load cash and ensure the machine is working properly.
However, the time spent on the business is very flexible, and commitment is not high as long as there is not much travel time between machines. This is easily a business that can be owned while still working a full-time or part-time job. Establishing relationships with venue owners can be a long-term process, so don’t get frustrated if you don’t quickly reach agreements when you’re starting.
Acquiring a used ATM machine may cost less, but people may be hesitant to use it as it can look older, not to mention the potential for costly repairs. Once you have an agreement with a venue owner, having a detailed contract can help to protect this agreement. Also, make sure to budget money for a business lawyer who can help you draw up an appropriate contract and review any modifications you may need to make.
Basic Licenses Needed to Start and Run an ATM Business in the United States
Owning and maintaining ATMs is a way many people earn a living and create additional or passive income, however, there are basic licenses you will need to start this business legally. They include;
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The business entity (also called a legal entity or business structure) will define how your business is legally organized. You can choose from four main business entity types – sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each business entity type has different pros and cons regarding liability, costs, and administrative requirements. A business lawyer is a good resource when deciding which type of entity is right for your business.
Business Operation License
Every state in the United States requires that you have a business license. Note that to apply for your business license at your state department you can go to The U.S. Small Business Administration. You only have to fill out a form with your social security number and profession. A business license normally costs around $100 but the cost can range from $50 to $400. Note that an additional processing fee of about $25 can also be added.
Doing Business As (DBA) License
A Doing Business As (DBA) License offers you the opportunity to operate your business under a name other than your own—for instance, if you are going to use the company trade name “Samson Cash ATM,” it subjects you to having to file a DBA, LLC or corporation. A DBA is not mandatory, but since it fulfills some requirements for opening a business bank account and enforcing any necessary contracts, it is definitely something to consider getting. If you would like to register for a DBA, you must file with your county or state.
Federal Employer Identification Number (EIN)
Note that every state collects sales tax on products you sell to consumers. Normally you pay 8% of your retail price in state tax. You are expected to go to your state’s tax office to register for this Tax Identification Number. You will also need to provide your business operation license, personal details, and a description of the items you are planning to sell. Online incorporation services charge around $75 for an EIN. The IRS does not charge anything for it so you can get this yourself for free by going directly to them. You can apply for a Federal Employer Identification Number online at the IRS.
Certificate of Occupancy
You are also expected to validate that your property is fit for the business you are planning to set up. The Certificate of Occupancy is more or less a document that is issued by a local government agency or building department that certifies that your property is compliant with the requirements for the type of business you are planning to run.
Note that you are expected to request this certificate before any work is done on the property. The cost of a Certificate of Occupancy is around $20 to $80 depending on where your business is based and the size of your property. Commercial business spaces less than 1’500 sq. ft. are typically around $30 where bigger ones go up to $80. Note that this certificate will be issued when all inspection checks have been done. These inspections include an electrical inspection, plumbing inspection, fire safety inspection, and a general building inspection.