ATM Brokerage interview in ATM Marketplace

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Selling your ATM portfolio? Here’s what buyers are looking for

While they have the acumen and attitude to start and run a business, what most business owners lack is an exit strategy. Here are answers to the questions IADs ask most frequently about the valuation and sale of their ATM business.

Selling your ATM portfolio? Here's what buyers are looking forphoto istock


 | by Triton Systems — Marketing, Triton

Like all entrepreneurs, ATM owners and operators get into the business to make money. Many purchase a few machines, find a few available locations and get started, eventually growing their startup into a full-fledged business.

But while they have the acumen and attitude to start and run a business, what most business owners lack is an exit strategy. The most frequently asked questions ATM operators are about the valuation and sale and exits of their business and subsequent exit from it.

To get answers to these questions, Alicia Blanda, CEO of Blanda Marketing, sat down recently with Jeff Sosville, of ATM Brokerage, a company that buys and sells ATMs and ATM routes, and helps IADs with the valuation and sale of their ATM portfolios.


Q: Would you say the market for ATM portfolios is more favorable to buyers or sellers?

A: Great question. I think it is a little of both at the moment — possibly hedging slightly toward a buyer’s market. On the “buy” side we are seeing nice opportunities due to traditional reasons such as relocation, retirement, etc. There are some ATM portfolios out there where operators have decided to sell rather than invest in EMV upgrade, though there are not too many of those left.

Sad to say, there are some owners who feel forced to sell right now due to the continued crackdown from government regulations and related banking regulations. This is a bit of a tricky time as we are seeing new entrants having a difficult time establishing banking relationships. Due to these challenges, the likely buyers are primarily established insiders who tend to drive valuations down.

On the “sell” side, the ATM market and business is still strong. There are many established ATM companies looking for acquisition targets and there are also new entrants looking to get into the ATM business.

I am a strong believer in the long-term value of the ATM industry and think it is an immediate cash-flow business that can be grown fairly easily and is fairly low-risk. The risk is mitigated through multiple locations so an owner can lose a location and, typically, not lose an entire business for any reason.

Q: How has EMV changed the buying and selling of portfolios?

A:Last year we received quite a number of inquiries from ATM business owners who were considering selling due to EMV. Some of these did sell and some, after walking through a valuation, decided to make the upgrade and hold onto their business.

EMV continues to be an issue and, currently, we are writing in discounts or credits for EMV upgrade into the valuations. If a seller decides to sell and has not upgraded, we typically consider those costs in the sale and credit the buyer for some EMV costs.

Q: Can you explain some of the variables that buyers are or should be looking for when purchasing an ATM portfolio?

A:When purchasing an ATM business, there are several factors to key in on:

Thinking about Selling Your ATM Portfolio? Here’s What Buyers are Looking for Today

CEO at Blanda Marketing & Public Relations

We sat down withAofATM Brokerageto pick his brain about portfolio valuation, the state of the market and the variables involved when purchasing or selling part or all of an ATM business.

Like any business, ATM owners and operators (IADs) enter the business for the purpose of making money. Many purchase a few machines, find a few available locations and get started, eventually growing their business into a full-time business. Despite the business acumen and go-getter attitude required to get started, what most business owners — no matter the industry — fail to consider is an exit strategy. In fact, one of the most asked and most popular questions for ATM operators are about the valuation, sale and exits of their business.

Q: Would you say the market for ATM portfolios is favorable to buyers or sellers?

A: Great question. I think it is a little of both at the moment — possibly hedging slightly toward a buyer’s market. On the “buy” side we are seeing nice opportunities due to traditional reasons such as relocation, retirement, etc. There are some ATM portfolios out there where operators have decided to sell rather than invest in EMV upgrade, though there are not too many of those left.

Sad to say, there are some owners who feel forced to sell right now due to the continued crackdown from government regulations and related banking regulations. This is a bit of a tricky time as we are seeing new entrants having a difficult time establishing banking relationships. Due to these challenges, the likely buyers are primarily established insiders who tend to drive valuations down.

On the “sell” side, the ATM market and business is still strong. There are many established ATM companies looking for acquisition targets and there are also new entrants looking to get into the ATM business.

I am a strong believer in the long-term value of the ATM industry and think it is an immediate cash-flow business that can be grown fairly easily and is fairly risk averse. The risk is mitigated through multiple locations so an owner can lose a location/gain a location and, typically, not lose an entire business for any reason.

Q: How has EMV changed the buying and selling of portfolios?

A:Last year we received quite a number of inquiries from ATM business owners who were considering selling due to EMV. Some of these did sell and some, after walking through a valuation, decided to make the upgrade and hold onto their business.

EMV continues to be an issue and, currently, we are writing in discounts or credits for EMV upgrade into the valuations. If a seller decides to sell and has not upgraded, we typically consider those costs in the sale and credit the buyer for some EMV costs.

Q: What are buyers looking for — or should be looking for — when purchasing an ATM portfolio?

A:When purchasing an ATM business, there are several factors to key in on:

Equipment What is the status, age, make, model and EMV upgrade status? Is there one manufacturer or are there multiple manufacturers within the fleet? Maintenance on a new and upgraded portfolio with a single manufacturer is ideal.

Contracts Does the owner have contracts in place with their merchants? If so, how are the contracts written?

End dates and automatic renewal clauses are important. The quality and validity of the contracts is important as well as the ability for the contract to be assigned to a new owner.

Financials — The overall profit and loss as well as the current state of the business are essential. Is the business being run as owner-operator, fully outsourced, or processing only?

We look at the details of the surcharge revenue, surcharge per transaction, interchange income and related buy rate. How much commission and merchant splits are being paid? How much margin is left after the owner pays their merchants?

Then it is important to review other expenses such as communication costs, fuel, parts, paper, labor, payroll and other expenses to fully understand what the business earns on an annual basis.

Locations and Geography Business location as well as ATM locations and relationships are important. Is there one large c-store chain with accounts or are they all independent locations?

What types of locations are included in the portfolio — bars, taverns, c-stores, hotels? Where in town are they located — inner city, rural, suburbs?

Then we look at the compilation of the route. Is everything in a 30-mile radius or is the portfolio a mix of locations over a much larger area? Time to service the route is key and a route with 20 locations within a 10-mile radius that can be serviced in five hours versus a 20-location route spread over a wide radius can make a big difference in valuation.

Q: What advice would you give an IAD who is looking to sell?

ABuyers are looking for new, upgraded and well-maintained equipment. I recommend getting your equipment upgraded and EMV-compliant. Also, if you have machines that are reaching the end of their life, consider upgrading the fleet.

Get all locations under contract — aiming for three to five years with an automatic renewal clause. Contracts on all locations and longer terms will keep your valuation in the higher range.

Get your books in order! I cannot stress this enough. The No. 1 reason one portfolio sells over another is the presentation and organization of the books. Clean and organized, well presented books and financials make a world of difference when selling the business.

Lastly, take a good look at your numbers and locations and do your best to get rid of poor performers. Move the locations as close to home as possible and think about risk aversion. Don’t put all your eggs in one basket with one key client.

While there many more things that go into a complete portfolio valuation and the sale of ATM businesses, these key factors are a good jumping-off point for any entrepreneur looking to buy or sell all or part of their ATM portfolio.

7 side hustles that (almost) run on autopilot (Fortune Magazine Article)

7 side hustles that (almost) run on autopilot

May 8, 2023 at 2:41 PM EDT
Photo illustration of a woman placing clothes into a dryer at a laundromat.

You don’t have to start a business from the ground up—or say goodbye to work-life balance—in order to be a successful entrepreneur.
PHOTO ILLUSTRATION BY FORTUNE; ORIGINAL PHOTO BY GETTY IMAGES

For many, becoming a business owner is a key component of the American Dream. It means flexibility in how you spend your day, control over business decisions, and hopefully, a path to long-term wealth and financial independence.

But you don’t have to start a business from the ground up—or say goodbye to work-life balance—in order to be a successful entrepreneur. Whether you’re looking to earn some extra side income or quit your nine-to-five for good, buying an existing business that essentially runs itself could be the answer.

“One of the biggest pros of owning a passive income business is the possibility of growth and the creation of franchise value,” says Ben Johnston, chief operating officer at Kapitus, a small business financing firm based in New York. “Should a business grow and prove sustainable for the long-term, the owner may be able to sell it for multiples of what it produces in annual income.” Additionally, Johnston says, if you do decide to become more active in the daily management of the business down the line, you could replace some of the overhead cost of other management and earn greater returns in exchange for your time.

7 side hustles that require little day-to-day involvement

The key to starting a successful, self-sustaining business is creating a solid foundation. That means investing the necessary time and resources upfront, which could mean buying high-quality equipment, securing customers, and, if necessary, hiring support staff.

While the income from owning a business is rarely 100% passive, there are certain businesses that practically run on autopilot once you build that foundation. So if you’ve saved up a solid initial investment (or qualify for financing) and are looking for a source of ongoing income, consider these low-maintenance business ideas.

1. Take over a laundromat

One of the biggest draws of owning a laundromat is that these businesses are considered recession-proof, since they provide an essential service. According to analysis by the Coin Laundry Association, coin-operated laundromats typically range in market value from $50,000 to more than $1 million. Additionally, they can generate between $15,000 and $300,000 in cash flow per year.

The startup costs for a laundromat can be quite high, however, which is why many people opt to purchase an existing business. You can find laundromats for sale on business listing sites or through brokers. Laundry equipment distributors may also have insider information on local businesses and can connect you with owners who are considering selling. When it comes to investing in an existing laundromat, a general rule of thumb is that it’s worth four to six times the annual net revenue.

2. Buy an automatic car wash

With the right preparation, another business that can essentially run itself is a self-serve or automatic car wash. These businesses are relatively easy to manage, as customers perform the labor using existing equipment. There are few, if any, employees required, as well as minimal inventory and maintenance.

For those reasons, owning a car wash can also provide excellent return on investment. A 2022 survey conducted by Auto Laundry News, a car wash industry publication, found that the average monthly income for a self-service car wash was $1,975 per bay.

Again, the success of your business will depend on many factors. Oasis Car Wash Systems notes that a couple of the biggest considerations when choosing a car wash business include traffic and accessibility. You should aim for a site that sees at least 1,000 to 3,000 cars per day, and is highly accessible and visible from the street (think corner lot, multiple driveways, and separate entrances and exits).

The cost of buying a self-serve or automatic car wash ranges quite a bit. It’s possible to purchase an existing business for under $100,000, while locations in high-cost-of-living areas can run into the millions.

3. Set up a vending machine route

If you’re looking for a passive-income business with a lower barrier to entry, consider investing in vending machines. The costs involved in starting a vending machine route are essentially just buying the machines and stocking them with inventory. From there, all you have to worry about is occasional maintenance, as well as restocking and collecting money from the transactions.

This is another business that relies heavily on location for success. You’ll want to work with businesses to place your machines in high-traffic areas such as office buildings, malls, hospitals, schools, and the like. And the more vending machines you own, the more your profit margins stand to improve, since you’ll be able to qualify for wholesale discounts on inventory and the route will become more efficient in general.

It’s possible to purchase vending machines used for less than $1,000. New ones will run $3,000 or more, especially for modern machines with features such as card readers or touch pads. However, with the right products and placement, you should be able to recoup that cost fairly quickly. eVending claims that its machines can be paid for by selling seven to 10 products per day at an average profit of 50 cents per product.

4. Place ATMs in strategic locations

Similar to a vending machine business, you can earn income by setting up a route of ATMs. When patrons pull out cash, they pay a surcharge to use the machine, and you get a cut of that fee. One ATM location that gets 80–100 transactions per month produces about a 40%–70% annual return on investment.

You’ll want to find locations that get a lot of foot traffic, especially from people who may need cash on hand. That can include grocery stores, casinos, gas stations, bars, restaurants, and clubs. It’s also a good idea to choose locations that are well-lit, highly populated, and monitored so that people feel safe using your ATMs.

ATM Brokerage notes that smaller routes require only basic maintenance, including filling the machines with cash and making sure the receipt paper is full. Installation costs can run between $200–$500, depending on the location and complexity. As for the machines themselves, a new, free-standing ATM costs around $2,000 to $3,000, though you can find used ones for around $1,200. Keep in mind that you’ll need to have a lot of cash flow to maintain a fleet of ATMs, as each one typically goes through about $6,000–$8,000 per month.

5. Buy a successful blog

Blogging is a business that requires little overhead, though it can take months or years to create high-quality, original content that generates lots of page views. The good news is that you don’t have to start a blog from scratch. There are plenty of successful blogs in place that are already generating revenue—whether it’s through affiliate links, display ads, sponsored content, et cetera—and may be available for purchase on a marketplace like Flippa for as little as a few hundred dollars.

The older and more established the site, the better chance it has of generating ongoing passive income (and the more expensive it will be to buy). Your earnings will also depend on the blog’s subject matter. Google, for example, estimates that a beauty and fitness blog that receives 50,000 monthly page views could generate about $7,800 in Adsense revenue per month. On the other hand, a science blog with the same amount of traffic would bring in about half of that.

6. Rent out billboard advertising space

Selling ad space on a billboard you own is about the closest to a 100% passive-income business there is. That’s especially true if you already own land where you can put up your billboard (keep in mind that you may have to adhere to local zoning laws and/or obtain a special permit).

The startup costs to build one can range considerably. For a single-faced wood billboard, you may spend anywhere from $5,000–$20,000 to have it constructed, depending on the exact size and height. However, these costs may be well worth it if you have a great location. On the low end, advertisers in a rural town may pay around $250 per month for a classic billboard campaign. But if your billboard is located in a major city, you could charge $14,000 or more per month.

7. Invest in a self-storage facility

Often categorized as a niche real estate investment, another business that doesn’t take much day-to-day oversight is a self-storage facility. From 2009 to 2018, self-storage facilities averaged an annual ROI of 16.9%, which is higher than any other type of commercial property, including office, industrial, retail, and apartments.

Storage facilities are also inherently low-maintenance, since the steel buildings are durable and require little upkeep. And with the help of technology such as kiosks, specialized surveillance, and web-based contract management, there’s no need for anyone to be on-site. However, if you aren’t interested in becoming the owner of a storage facility, you can also choose to be a passive investor in someone else’s business.

The takeaway

There are many ways to make money on the side, from picking up a small side hustle to launching a new business. If you’re looking for something in between and don’t want to spend a ton of time, money, and effort keeping your side income flowing, consider a business that (almost) runs on autopilot. If you go this route, it’s crucial to do your due diligence, crunch the numbers, and invest in a business that can have long-term success.

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