741: $1500/mo With His ATM Side Hustle

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1:07That's W-H-A-T-N-O-T, whatnot.com slash sell, whatnot.com slash sell. So here's a side hustle that shows up on a lot of passive income idea lists, but it's hard to find anybody actually doing it or at least openly talking about it. And that side hustle is ATM machines. So similar to our vending machine episodes, you can literally go out and buy a money-making robot. You just got to figure out where to put it so that people use it. So my guest today has got five of these ATM machines bringing in around$1 ,500 a month in exchange for an hour of work a week. Pretty good return there. From VikingVendorsLLC.com, Will Butterton.

1:51Welcome to the Side Hustle Show. Thanks for having me, Nick. You bet. Stick around. We're talking startup costs. We're talking location placements, risks to be aware of, and lots more. So, Will, you're a full-time engineer by trade, by training, by employment. You're a dad. My understanding is this is one of several side hustles, but what attracted you to ATMs? My wife was pregnant. I was like, man, I think that's something I could do. Didn't seem like there was a whole lot of risk. My buddy, who was living next door to me at the time, also wanted to start something. and we decided to pony up some cash and buy our first two machines out the gate.

2:27So you're going machines first, and then we'll figure out where to put them next versus securing a spot first. By far, the hardest part of the ATM landscape is finding your business bank account. Generally, that's a local bank or credit union that will offer you the bank account that will actually allow ATM transactions to be processed through their avenue. If you go to a national bank and say, I want to open a business account, and they ask, what's your business? And you say, I'm starting an ATM business. And they're like, full stop. We don't want to touch this. Yes, your large chain banks. In the early 20-teens, there was a big federal investigation that involved money laundering and gang activity and the mob and ATMs.

3:10And basically, what was discovered is that these criminal entities were using ATMs to launder money or part of their criminal enterprise, if you will. So all of the large banks after this was found out basically put a hard stop to it, which it was an easy solution for them. But then it became a massive pain in the butt for legitimate ATM operators like myself and other tons of other ATM operators that have been doing this for an extremely long time. So that is your hardest task while starting this business is securing that bank account. Okay, so that's step one before buying any machines before looking for locations like try and set up that account And in order to set up that that account you're going to need your ein your your federal tax number So really before we pulled the trigger there was an llc that I created once you're through that Securing your business bank account for this specific business Atms would be the the first thing I try and do because I had to call six or seven local banks.

4:11And by the end, you're considering how many branches you're going to be pulling cash out. You want a decent amount of branches. You want branches close to you. So at the bottom of that list, I'm like, oh my gosh, I'm going to be driving like 45 minutes to pick up cash. And luckily we did find one that is a reputable banker in Washington that has plenty of branch access. Got it. Okay. So with that in hand, what happens next? So now the time ATMs were about$2 ,500, they've increased. So around$3 ,000, you can probably get a nice new ATM. So$3 ,000 for the ATM. It's going in a decently high traffic location.

4:50You're going to want at least$1 ,000 to start with. Me personally, I stick with the GenMegas. So GenMega$2 ,500 is what we use. Okay. And then the Hyosungs are good. I have one Hyosung. We buy all of our ATMs through the company that processes the transactions. which I'll get to. And then, you know, maybe 500 extra if, you know, you're going to have receipt paper, parts, supplies or whatever. So a good$4 ,500 is what I would start per machine. Yeah, I didn't really think about that. It's like you need to, it's like a snack vending machine. Well, I got to fill it with product. Only the product in this case is cash.

5:24Yeah, your money is the product, essentially, right? So we have the money set aside, we're going to buy the machines. Finding an ATM processor, another very important step. So there's a ton and they all offer similar things but really what you want to find and doesn't matter who you use find yourself a processor that doesn't take any percent of your surcharge fee that is the entire profit margin all your profit for an atm business is the surcharge fee when you get to the screen or if i'm taking money out and i get to this screen that says do you agree to pay so and so three dollars to process this transaction or go through with it yes that three dollars that's really all the money that there is to be made right there.

6:06Yeah. So some processors will take 10 % of that. Okay. Well, that's only 30 cents on a$3, but that adds up over time. You want that 30 cents. That 30 cents could be the 30 cents that you share with the person that owns the business that you're putting the ATM at, you know, that you want that 30. So how are the processors making money if they're not taking a cut of that fee? So the processors make the money by the agreements that they have with the banks and the card companies. So say like, if you go to an ATM and it takes MasterCard, Visa, blah, blah, blah, like it has the list of normally there's a sticker that shows all the cards that they take.

6:43They make money on the back end and it's pennies per transaction, but the banks have to pay money to basically be hosted on these universal ATMs, if you will. So the companies that process those take money in the back end of the transactions. So we use Proneta. And again, And I'm not, they don't give me any kickbacks or discounts. That's just who we landed on. There's tons of great companies. I looked around quite a bit and I liked Pernetta and what they had to offer. They didn't take any percent of your surcharge fee. They have really good customer service. Like I can text them, they're customer service agents and they'll reply back to me and good company.

7:19They take 0%. Okay. So if I charge$3 for a transaction, I get all$3 back in my bank account. Is that typical pricing wise? We kind of base our pricing on a couple different factors. If we're doing price sharing, so like I'll give some of my pitch, if you will, but if it's a cash only business, the convenience to them and their customer is having a place they can get cash on site if you're only accepting cash of that business. so what I would pitch to someone like that is I can make the surcharge fee lower so your customers don't feel like they're being drug over the coals with a four or five dollar surcharge fee but I'm not going to split profit with you or I'm not going to do profit sharing because basically our number is three dollars anything over three dollars we'll share profit anything under we won't and so we can set the lower price as a convenience to your customer in a cash-only business but But if the business owner wants to do profit sharing, then we'll have to raise the surcharge fee in order to combat some of the profit loss that we're paying back to the business owner.

8:22Got it. And so that was kind of one of the questions was, are they going to charge you rent for taking up some of their floor space with this ATM machine? Even though it's a service to their customers, it's like, well, that was one question. And part of it was like, well, if the machines are only$2 ,000 or$3 ,000, why wouldn't they just put it in themselves? But it's like, well, maybe there's this red tape hurdle of finding a processor and finding a separate bank account, like doing all this stuff. We'll use Pranetta as an example. So Pranetta, the company that processes our transactions, started out as someone like a Viking Vendors myself.

8:54They started out as ATM placers. And they had kind of grew their fleet. And then there's a point where a passive income no longer becomes passive or a job like ATMs. It might take an hour a week. But if you ask one of there's a guy around here, the ATM guy who he was over 400. I mean, like that guy outside of being an ATM millionaire, he's also that's not passive income. Like I got told a really good thing or a good quote, and I can't really quote it verbatim. But basically it was, you know, if you grow too big in this space, you can kiss your vacations goodbye because you can't let your ATMs run dry.

9:33You are your brand or you're your business in this case. like the amount of machines you're leaving on empty, the, you know, how good you are at keeping the machines full and keeping your customers happy, that really translates over to the business. And so when it grows to a point where, yeah, it no longer becomes passive. And these people are like, don't like past a certain point, don't do it because it really, it takes, it starts taking away from family time and vacations and all that. And so I haven't quite got to the sweet spot yet. Yeah. Yeah, maybe there's a little bit more of a, I'm thinking of a, you know, hiring somebody to restock or, you know, refill the machines.

10:10It's a little bit different than having somebody pick up some cans of Coke and some bags of chips. It's like you're picking up stacks of thousands of dollars and under your name and going to refill these. You have to really be able to trust the folks that you're working with in the space because it really is all cash. And the point I was making with Pernet is they started, expanded, expanded, got to the point where in order for them to level up, they became processors and then started taking people like me on that buy ATMs through them that use them to process. So they actually still own some of their ATMs and they have cash fillers and everything.

10:46But a lot of their clients are people like me that then buy a fleet. So then it kind of trickles down. They make money off of every transaction that I do. If I was a business and went through a company like that, I could buy like rent an ATM from an ATM processor. So they would ship it, get it set up, everything. But all that business would have to do would be like to fill it with cash, essentially. But in terms of surcharge, we haven't had to split any surcharge for any of the locations we've placed so far. So keeping it kind of at that$3 sweet spot and saying no rev share, basically, with the location.

11:20Yeah, and I do think that that is a little bit rare in this space. That's something you need to be prepared to do is the revenue sharing. Because that's how you're going to land some of those bigger locations. Well, let's talk about finding the right location for these because you kind of alluded to this. I want to find a cash only business and one that doesn't already have an ATM machine in place. Those overlapping circles on the Venn diagram have got to be pretty small these days. It's hard. I mean, it's a business that's been around a really long time. The approach that I've always taken is like the small family owned.

11:53It's me and my buddy, childhood buddy, the flyers that we hand out or give to a business. normally when we do our first interaction with them. We try and be as personable as we possibly can in a world or in this business space, like that doesn't really exist. I started like going around to these locations first, my first foot in the door, I'll go see if they have an ATM. If they do, I'll go put my card up to it. I'll see what the surcharge is. I'll see who owns it. I'll get the information on who's processing and I'll ask them if they have any issues with their current processor or their current ATM loader, filler, whatever.

12:28operator. The number one complaint I get is that the machine breaks and that the people take too long to fix it. It's a multiple day thing. The ATM will be down. And so I started equating that with the distance that these operators are placing locations from. So I try and stay really close or close enough that if something goes down, I can be there same day. I give them my cell phone number, you know, the direct contact to me, email everything. So I come in there with business cards, flyers, more information, like ways to contact me website than any other, the ATM processors, even the big ones have.

13:06Like you, you don't see full complete websites and that level of commitment from those guys. And they might not need it because they, what's word of mouth at this point for them. But for me, in order to selling somebody going into a store and telling them whatever they have currently working, that you can offer a better service or, Hey, let me kind of mess with what you have going. And I will, on my word, provide a better service than you're being provided. It's one of the hardest sales you can make. Okay. So it's not likely to find that they don't have an ATM machine and need one. It's more likely, and we've heard this from our snack and drink vending entrepreneurs as well.

13:43It's like, no, we have one. It's just, it's always out of stock. It's broken. They don't respond to our calls. They don't come out and restock and they don't fix it. And so it's like, okay, I can come in. And this was their pitch as well. Like I'm going to be better. I'm going to be local. I'm going to be responsive. You can, here's my cell phone number. You can call me directly. And that level of personable customer service, you know, ends, ends up winning some people over. Yeah. A hundred percent. You got a promise, but then you also have to deliver. Like you have to not only say that you're going to be better, but you do have to be better.

14:15Yeah. There's a lot of people in this space that are rude or don't show up on time. You know, they just don't have any business etiquette. And there's a lot of those and I've done plenty of Facebook marketplace interaction with other ATM companies and the bar isn't set super high, at least from what I've seen. So I'm picturing you and your partner going, you know, through strip malls, you know, door to door and first doing the awkward look around like, oh, is there an ATM machine here? And we're dressed up too. That's the other thing is like, like I go in there with button up shirt with our logo on it, dress pants.

14:49Like I, own it. Okay. Like a uniform. Sure. My dad is boomer generation. He was in the Navy for 30 years. A lot of these business owners, majority of small businesses owned right now are owned by that generation as well. But like look in the part, it all plays into that, like securing a location. It really does. Well, tell me about your first win. Where do you, where do you put the first machine? It was a indoor soccer center in Bremerton, the Pendergast Park. It's an indoor turf soccer center. And I was currently playing cornhole there on Tuesday nights. It's like a beer league cornhole thing.

15:24And so those guys are making side bets and stuff all the time. It's like a lot of cash and cornhole. So as I was getting into it, I was like, we need a place to get cash. That's really interesting. It's not a cash holding business, but the people who come there need cash. Okay. Yeah. So, so I ended up, I talked to the owner and we sat down and he was like, yeah, man, like, I will let you try it. But I went into that meeting, like the full persona, the fake it till you make it like we had done it before type of thing. I did not divulge that we our first ATMs were being ordered. He didn't really ask.

15:57I had my website set up everything. And first sale, I was nervous, like, petrified trying to I'm, I'm an engineer, not a salesman. And I'm like, the machine got delivered a week later. And we, I was watching YouTube videos trying to figure out how to set this thing up and then pranetta offers they have technicians that will set it up with you over the phone and uh you can do it on site or there but i'm like i don't want to do that on site because i want to i don't want them to think that like it's like yeah hit this button like you know that i'm inexperienced so we set it up in my garage it it really is just power and a ethernet cable right so plugged it into my router got it all set up and so now it's ready to drop and we dropped it in, plugged it in, wired 100 foot of Ethernet through the ceiling into his router.

16:45And yeah, it's not super involved. All right. So the soccer center says yes, and still knocking on to, well, now we got to find a home for the second machine. Where that one goes, plus more ATM vending machine profit potential and best practices with Will coming up right after this. When you're a small business, the right hire can be make or break. Hoping the right people see your job posting really isn't the best growth strategy. When the pressure's on and you need the right hire, this is a job for Indeed Sponsored Jobs. Indeed Sponsored Jobs get you the quality candidates when you need them most, like yesterday.

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17:57Just go to Indeed.com slash podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? This is a job for Indeed-sponsored jobs. In sports, there's this saying that speed is a weapon. And the same is true in business. If you're missing calls or being slow to follow up with customers, you're leaving money on the table. Sometimes without even realizing it because your potential customer, they've already moved on. That's why today's episode is brought to you by Quo, spelled Q-U-O. This is the business communications system built so you never miss a call.

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19:05Money is on the line. Always say hello with Quo. Try Quo for free plus get 20 % off your first six months when you go to Quo.com slash side hustle. That's Quo, Q-U-O.com slash side hustle. Yeah, so second machine, there was a barbershop and I didn't know outside of my buddy went in there to get his hair cut. And he was like, hey, man, there's a barbershop I just went into. And I don't know if they take card, but she told me it was cash on. And they didn't have an ATM. They actually made him go to the Rite Aid next door. And it was five minutes from my house. I didn't even know about it. And so I went in there, pitched them the same thing that I did the indoor soccer place.

19:46And yeah, they let us place it there. And that's another thing, like try your hardest to make friends with these people. I know them all like first name, Nikki. You know, I got all my my folks. Sometimes we'll bring them a little like a little goodie basket, just cheap, cheap little things that I guarantee you no other ATM operator or, you know, a little Christmas card here or anything while you're going and filling. Because like when you're small, you want everything in house. It's going to be your cash. You're going to be filling it yourself. What's a good month from the barbershop? So our surcharge there is$3 and it'll do like in a good month, like 200 transactions.

20:24Like I think the best month ever. Some ATMs do way crazier. True. But like$600 coming from a single machine. And if you have 10 of those. Yeah. From a small town barbershop. Yeah. And now the real like olden goose, if you will, or where you want to be in Washington or any space that allows it is dispensary. Like Washington State, that is your ATM dream. If you can get into a dispensary, that would be the difference from some people like quitting this business and it becoming their full time job type of thing. Yeah, here's a high volume cash only operation. But again, they've got to be disgruntled with their current provider because you have to imagine that they all already have one or more ATM machines in there.

21:09Yeah, exactly. So this is the different levels of ATM. So there's big enough companies that have people on payroll to sit, basically sit on the LLC database. Kind of like a new business registration data. Yep. New business registration database. And they pay people to sit there and anything that sounds remotely like something that they'd be interested in. In a brick and mortar before the location is even built. Like it's just an LLC. They have people reaching out. Hey, when you get this going, you're going to need an ATM. We're your guys. Yeah. Hey, you're going to want one of these. And so if I don't have the time to do that, you have to come from a different approach.

21:46If you are a one or two man team, you got to do what you can to try and give yourself advantages over the people that have large teams of people doing this. You're not going to be the person that's going to reach out first, but you can surely be the person that provides the most personable, friendly, warm experience with them. You can do that. Yeah. Any luck getting into a dispensary so far? No, it's tricky. also if you go in there be prepared that the the people that work there are probably not gonna pass your information along you got to catch like a manager i've been in there a lot of times where you know you're chatting with folks and you're like hey you know if you could pass this along either an owner or manager the people that just work there that are just regular employees they don't care i've gone in and seen my card sitting the same little pile over there after so i go in I'll try and get numbers or like look up online, find people who owns it, call them.

22:43There's ways to try and figure out who you need to talk to. But yeah, we still haven't landed it. I did hear a really encouraging story though, from, uh, cause I know a guy, the guy who owns cash money ATMs, he's out of Tacoma, but like full-time gig, really big ATM operator. He had like nine to 10 ATMs at the time. And he was like, at the time when he was just getting going, his wife was, they were on the threshold of quitting and that's why I say it can really change your business and he was like I was honestly like about to quit and just so happened that a location that I was already in the own the guy who owned that bar owned a dispensary and because I had you know I never let him run dry and he and I built a relationship he finally let me give it a shot over there and he's like I tell you what the transactions I got from that crushed all nine 10 other machines I had.

23:34And he's like, that location alone that made my wife and I completely changed our minds and decide to do this full time. And he's like, I never looked back after that. He was like, that one location, because you have to think an ATM at a dispensary, at least from the metrics or the information that I've gathered from the employees, it will do over 5 ,000 dispensed a day, 5 ,000 cash per day. Wow. So even if everyone takes out the maximum limit at, so 5 ,000 dispensed a day and divide that by the max 200 so that's 25 a lot of atms set like a max limit of 200 dollars and then you have to pay again that kind of conserves your cash that you have in there if i let someone take out 2 000 and i only load it with 2 000 you know that could be one transaction before i fill right 25 transactions a day over 30 days you know that's 750 transactions and those are normally like$3.

24:31So, you know, that's$2 ,250 in profit from a single location in one month that you could do in theory. Yeah, that could be big. Yeah, and you can imagine you start to do, oh, what if I had four or five of these? But that would double. I mean, that's what he was saying. One location would double what I pull in from R7. Do you get a kind of remote dashboard so you know how much is left in there? You're like, oh, shoot, I'm down to my last$100. I better go refill it. So it's both a phone app and a website. I don't even use the phone app. I just log in on my phone to the website. I can see transactions real time.

25:07So if a power outage, any error, I have it set up. So anytime my machines go below 400, it texts us location machine. So all that part's automated. And that's not even something that you have to set up. So is that the bulk of your time now that you're kind of up and running and several years deep into this is going to the bank, Like taking out large sums of cash and then going along the route to fill the machines? Yeah, my buddy does the cash and I do the vending machines. So about once a week, he'll go take all of our cash out of our bank account. And also, just a quick touch, three bank accounts.

25:42One for all your vault cash, the cash that you load into the machine. One for all of the transactions that are coming in. And then one as a savings just when times get tough. That's how we set it up at least. So yes, he'll go in, grab all the cash out of the vault cash. So say there's 5 ,000, he'll take that 5 ,000, go put 5 ,000 in our machines. And then when that cash is taken out, the surcharge, the$3 surcharge fee gets put in our income. So every transaction, you'll see$3 drop in there. And then the amount that they take out, the 200, the 40 they just pulled out goes back into the vault cash.