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Private ATM Business Plan
Private ATM Business Plan
Business Plan for Setting up, Running and Maintaining a Private ATM Business
(By : xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx)
Affiliation:
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BUSINESS PLAN FOR PRIVATE ATM
Introduction
All businesses require a business plan for success especially a Private ATM business, as it is new
and its characteristics are not so well known all over the world. A Business Plan is a report
which spells out how the business will be carried out so that it is profitable. The business plan
serves the following functions (a) it spells out clearly what is to be done and in what
circumstances (b) it lists down the priority of the actions. Finally (c) it forms the guide to our
business so that in case any party who has been approached for part finance can go through it to
know all about the business and thereby come to a decision as to whether they will be safe in
Trends forecast
With the increasing benefits that bank customers are enjoying and their gradual increase, banking
industry experts feel that customers will want more and more of ATMs in the very near future,
which are here to stay. Hence, ATMs will be broadly classified into two separate categories one
type, which will offer all kinds of services from filing your tax returns to investing money in the
capital market. The other, which is being considered in this plan, are the ordinary ATMs.
Profitability
Statistics show that in the US, more than 50% of ATMs are privately
charging transactions with a surcharge of 2% to 4% on its value. This shows that the ATM
Despite the profitability, there has not been much of a study in this line. We will therefore
form our business plan vide the old formula of (Returns less Investment equals Profit). In fact,
gauging accuracy of the Investment costs become all the more important when we consider the
The most expensive item here is the ATM machine. They are available in the range of $1,500
to $3,000. It should be kept in mind that we want our ATM to have a tag of being reliable. This
is very important in retail selling. Say we go the corner drugstore twice and by co-incidence, the
things required are not in stock at the drugstore. In such a case, the store is termed unreliable.
The store therefore loses our business and the business of our friends and relatives too. In the
same way, if a customers sees that the machine is under repair twice or thrice, the ATM will go
in for an unwanted tag of unreliability. We therefore invest in a brand new machine say at $2500.
We can get these advantages from buying a new ATM machine. Apart from these, if we
buy a second hand machine, we have to keep in mind that many ATMs sold vide E-bay are not
3DES compliant. Triple DES is an advanced encryption technology that is now mandatory in
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BUSINESS PLAN FOR PRIVATE ATM
ATMs. Buying an old incompliant ATM will involve heavy upgrading expenditure. Further,
second hand and leased ATMs have this tendency to break down at frequent intervals.
ATM Processing
What is ATM processing? An ATM has to be programmed with software, which can be
such that apart from the common services, it can close down the machine when cash is exhausted
and inform me. If programmed, it can send a SOS text to me and the service company in case of
a defect; it can keep records of all transactions and even give out gift cards at random intervals to
customers etc. All this can be done by hooking up the ATM to the other ATMs in their WLAN
If required, they can even fill up my machine with cash, at a surcharge per transaction or
we can do it ourselves. All this services should be covered in the ATM processing companys
agreement and everything should be well described. My interest will be to negotiate a contract
with the company not exceeding 3 years without any upfront payment .A two year period is a
must because the processing company has to recover their costs from a part of the surcharge and
also make a profit. These companies already have a number of ATMs, which has a call center
number, and they will just add our phone number to it. Naturally, if we try to provide a similar
service our costs will be much higher. It is best to give the AMC of the ATM also to the
processing company.
While negotiating we will allow a maximum of 0.8% of the transactions. Two facts which
are favorable to us is that we can sell advertising space to the company and as the machine is
new, it will not need much servicing. As regards filling-up money, a retail ATM has been found
to operate between 8-10 times/day and an average withdrawal being $60-$ 100. Therefore, filling
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BUSINESS PLAN FOR PRIVATE ATM
up money of $1000 should be adequate. Within a few days we will be able to find out the trend
in our machine.
We decide the location of the machine, which is very important. The more the footfall in
the particular area, the more is our earnings. So we select a location which is the most favorable
for the ATM. Movie Theatres, Video game centers in malls, fast food chains, casinos etc. are
some possible locations. The actual location can only be decided by after seeing it. Inside a
video game center in a mall is a good choice. When we talk to the owner about placing our ATM
there, we need to point out that as his is a commercial enterprise where people spend money, the
maximum portion of a withdrawal is likely to be spent there itself, thereby increasing his
turnover. As soon as he realizes this, we should get a discount on your rent, payable monthly. The
deal will be concretized by an agreement. Another point is that the ATM will be secure with the
We have almost finished our job. Apart from what has been listed, we will require
1. A Power connection
2. Two telephone lines, .one for the machine and the other for the helpline .
Let us consider a charge of $ 70 for the rent and $ 30 for the power and the telephone.
We charge a surcharge of 3% per transaction, out of which 0.8% is retained by the processing
Then, considering operations for 1 month and 3 months, we have the following graphs.
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BUSINESS PLAN FOR PRIVATE ATM
1000
900
800
700
600
500 10 days 20 days
400 Processor earnings per
300 day=o.8%=$8
200
100
0
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BUSINESS PLAN FOR PRIVATE ATM
6000
5000
4000
Month 3
3000 Month 2
Month 1
Month 0
2000
1000
0
Total Earnings Owner Earnings Processor Earnings
As can be seen from the graph, in four months I will be able to square off my investment
and earn a profit. From the fourth month onwards, it will be completely profitable.
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BUSINESS PLAN FOR PRIVATE ATM
Before we conclude the business plan, we have to list a few basic things to do at the very start,
which are
We now conclude our business plan after showing the profitability of the proposed ATM
business.
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References :
Article compilation, 2008, Emerging Algeria The Report, the Oxford Business Group
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BUSINESS PLAN FOR PRIVATE ATM
McDysanD, S.D., 1999, ATM Theory and applications, New Delhi: Tata-McGraw Hill.