83. Turned Side Hustle Into a $15M/Year ATM Business

0:00This ex-police officer made$12 million within three years of buying ATMs for$2 ,100 while working a 9 to 5. Today, with almost$15 million in annual revenues, he's helped more than 2 ,000 aspiring entrepreneurs start their own ATM businesses. So far this year, in 2023, we had just crossed over$17 million in revenue from this business with 2 ,300 clients nationwide. I've dealt with thousands upon thousands of merchants, and they all share the same pain point. So now, it's a 100 % passive income business, and you can own it remotely. After about 10 locations, you should start looking into hiring either independent contractors or what I like to call vaulters.

0:45Can't, no, maybe, shouldn't be in your guys' vocabulary. Be confident in yourself and just get it done. I'm your host, Alex Freeman, and today I'm joined by Paul Alex to unravel the world of ATMs. Paul, thank you so much for joining us. Hey, Alex. Thanks. I'm excited to be here. So to get us started, like, tell us a little bit more about you and how you got started in the ATM business. Oh, man, it's such a unique story. I'm coming from the fast pace of law enforcement. I used to work for a little city called Oakland in Oakland, California. And during that time, man, just to give you guys an overview of what my life looked like, I was working anywhere between 60 to 100 hour work weeks.

1:28So basically, I had no life. I was making close to about a quarter of a million dollars. Now, guys, I know majority of you guys probably listening to this and Alex, I don't know if you know how much cops make just in general, but for a cop, I mean, that's pretty good money, man. I mean, quarter of a million dollars when you really think about it. At that time, I was sacrificing so much of my time that I was neglecting family. I was neglecting my spouse. I was neglecting my health, man. And I didn't realize it. All of a sudden, I just went through all of this. Okay. my mindset completely shifted where I was like, is this worth it?

2:05Is my life worth what I'm doing right now? So that's where I slowly started transitioning, where I started really thinking about the longevity of the career. At that time, I was avoiding the fact that I wasn't getting any sleep. I was roughly getting about three to five hours of sleep a day. My relationship with my ex-girlfriend at the time was down the drain. It was all bad. The time that spending with my family. I'm a big family guy. I do anything for my family. My parents are getting older and I see that. You start realizing that as you get older as well. And I wanted to spend as much time with them as possible.

2:40And I couldn't do that because of the job. So my back was really against the wall when I started really thinking about entrepreneurship and when I really started thinking about like, hey, I need to create another source of income to really reduce the workload that I'm doing, but then also eventually become financially free. So I talked to my buddy who had 15 years on at the apartment and we're talking about, you know, creating businesses. And he tells me like, Paul, have you ever heard of actually owning your own ATM business? And I told him like, no, man, I thought the banks own that. You know, I never knew about that.

3:16And at this time, I wasn't well-versed with social media. The last time I used social media, Alex, was my Myspace. I know I'm aging myself, man, but I'm just keeping it real. Last time I used social media was Myspace. And I wasn't on social media for about eight years. So I wasn't exposed to what we're exposed now in the digital marketing scene with successful business owners selling courses and programs and all that jazz. So I'm talking to my buddy about it. He's like, yeah, man, do some research. So the first thing I do is I sign up for Facebook. So I sign up for Facebook. And luckily for Facebook, they have these communities, which they call Facebook groups.

3:52And they go ahead and you can be in a community with a like-minded individual just like yourself. So if you're interested in cars, they have a Facebook group for cars. If you're interested in real estate wholesaling, they have a Facebook group for that. So they had Facebook groups for ATMs. And I remember entering into these Facebook groups. And initially, you know, I asked a couple of questions. People were very secretive with providing information. So I ventured off and I started looking on Google. I started reading books, everything that I could get my hands on to basically do my due diligence regarding the ATM business.

4:25So then I'm the type of person that I do in perfect action. And I think this is one of the biggest needle movers when it comes to starting a business, when making a decision, when just doing about everything. Because in life, you are not ever going to be 100 % sure. I'm telling you that right now, just from life experience, I've gone through three careers. Now a full-time entrepreneur, not even the biggest guys right now that I've become friends with. And nine-figure companies, guys, know everything. They just go with one decision and they stick with it. And if it doesn't work, they find a solution and they get over it.

4:57That's it. That's life, right? So I had that mindset already embedded in me because of my prior experience as being a lead case agent with this task force. So I was like, you know what? I'm just going to execute on this ATM business. You know, let's rock. So I ended up taking two weeks off of work. I did the exact same thing when I was in corporate America to be in law enforcement. So I stick to what works. I took two weeks off work. I'm like, okay, this is my plan. I have to go and door knock. I have to go and cold call. I have to get in front of people. Luckily, I had the experience of being a salesman.

5:27I was able to go and make some conversations. I was actually able to land six locations, nail shops, barber shops, liquor stores, to have them place my ATM at their locations. Now, roughly, you're probably thinking like, well, why would the business owner allow you to place your ATM, Paul, in there when they could just do it themselves or they can find somebody else who's a bigger company, right? Well, at the time, number one, I always say a gem that I can always tell everybody is build foundation. If people like you, resonate with you, and you can actually build a foundation with anyone, they're going to buy from you.

5:58People don't buy the product or service. They buy you. So at the end of the day, that transitioned into later on with what I created with ATM together, right? Which we'll get into in a couple minutes. But people buy necessarily like me. They resonate with me. They resonate with my story. It's real. I've gone through it. I've gone through the experiences. I've gone through the headaches. And I just provide value by basically explaining the process and the journey. When people see that, people see the transparency. It's almost like they're talking to you in person. And that's what majority of business owners need to understand, especially nowadays in the online space.

6:29There are millions of businesses online promoting their offer, promoting their service. But what makes the most successful businesses online very successful is how relatable they are, especially to either the founder or the CEO or the face of the company. So, Paul, I want to kind of take a step back real quick and look at, you know, as you get ready to go into those two weeks that you took off to kind of hit the street to build up the business, what were some of those first steps to prepare yourself to be ready for those two weeks? What does somebody need to do to get into the ATM business kind of initially to be able to go into a business and say, hey, I have these ATMs to place?

7:04Yeah, great question, Alex. So what I would always recommend, number one, get your mindset right, meaning that get ready for people to say no to you. At the end of the day, the hardest part about this business, which is very black and white, super simple, is actually landing the locations. And most people cannot take rejection. So as long as you train your mind to get ready for rejection, you'll be a-okay. The second gem that I could give you is just due diligence, do your research, know what you're actually going to offer. The biggest thing that I've learned with business, and this goes in any niche or any industry, is actually being very clear and giving clarity to the buyer or the person you're trying to do business with on your offer.

7:43As you get your mindset ready for that rejection, what are some of the common objections that you ran into in the beginning and that you've experienced since then? Some of the most common objections is it comes down to negotiation. There's sometimes business owners that are a little bit greedy and they'll say like, I want 50 % of your surcharge profits, which when you guys look at it, if you guys were to get three to five people using your ATM on a daily basis, you're roughly making about$90 to$15 a day. And let's say an average percentage that you would give an owner is roughly about 20%. So if you're making anywhere between$270 to about$450 a month from one single ATM, 20%, that is a good selling point to provide value to any merchant.

8:26And you still come up on top. You'll roughly make on average around$216 to up to close to$400. So one of the most common objections that we do face nowadays is that they already have an ATM. Everywhere that your average person that would go to a location or a city or a business, they'd be like, well, there's ATMs everywhere. Here's the thing, guys. There's always going to be someone who provides an elite customer service. So when you come down to it, just having a simple conversation with the business owner, it should never, never push you back just because there's an ATM at the location. You might not know, but the actual ATM at the location might have been down for a few weeks.

9:03It might have run out of cash. They might be providing bad service. And the owner's just waiting for another company to step in there and actually provide them great customer service and transfer their contract to your contract. and now you guys can start cash flowing with your own ATM at the location. The biggest fortunes aren't made on Wall Street. They're made way before startups hit the stock market. Consider Mike Walsh. He was just a regular guy, but then he invested$5 ,000 into Uber. And that investment money? It grew to a staggering$24 ,827 ,400. Such opportunities were once behind closed doors, reserved for those with connections or vast fortunes, but not anymore.

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10:13Paul, I want to ask you more about that customer service. What does it mean to provide good customer service in an ATM business? Yeah, absolutely. So in any business, but specifically the ATM business is a very old school business. So because it's a very old school business, I always love to personally give the owners my number. So if there was ever an issue as far as having the ATM actual functioning or the ATM runs out of money, I always advise the owners, hey, just feel free to message me at any time. I'll be more than happy to respond when I can. But just the fact that you're letting them know, like, here's my personal number.

10:49You're going to be interacting with me. People just love that fact. You're giving it that personal touch compared to these larger companies where the owner might get a 1-800 number or an email response. And it might actually take weeks. I mean, I've gone through it, guys. I've dealt with thousands upon thousands of merchants and they all share the same pain point. They just want someone that can instantly respond to their issue. That way they could keep the cash flow coming within their ATM and retain more customers. As someone gets into the ATM business, what are some of those common mistakes that you see them make?

11:22And which of those common mistakes did you make yourself? Absolutely. This is a great question, man. So two big mistakes that I did that everyone can learn from on this podcast is number one, never, ever sign a agreement with any ATM processing company. that's going to provide you the network in order for your ATM to actually connect to the banking network that facilitates the transactions. The reason why I say this is because if the business or the actual ATM processing company is doing good business, they can retain you without you signing a contract. You're not going to go anywhere as long as they're providing you that great customer service.

12:00When I started the ATM business, I signed up with one of the largest ATM processing, but also ATM suppliers in the market. The deal that I signed up with them was a three-year contract and they were roughly taking about 30 % of my surcharge profits. A year later, I ended up getting a mentor. This mentor was like, Paul, you have to break the contract. They are taking thousands of dollars from your actual routes. So I ended up paying $7 ,000 to pick a three-year contract and to keep 100 % of my surcharge profits. So the two tips that I have for you guys, number one, you should always keep 100 % of your surcharge profits, no matter what company you go with.

12:41And number two, never sign a contract with any company. That's really, really great advice. Are those traps the reason that you see people fail in the ATM business or are there other reasons that people might get started and not find the success that you were able to find? Yeah, so it does heavily affect your return on investment because if someone's taking about roughly 30%, that's not even counting the percentage that you may have to pay the owner. All in, if you have a ATM processing company that's taking 30%, like in my situation, and then you have to pay 20 % to the owner, you're in about 50%.

13:14Now, you gotta see whether or not it's worth it for you. For some people,$200 cashflow is great off of one location. For other people, their standard is about 300 or 400, depending on where the location's at. Because you also have to consider drive time. You have to consider how much time you have available to you. And then also how much you make per hour. As you grow as an entrepreneur, your hourly rate grows as well. So at a certain point, after about 10 locations, you should start looking into hiring either independent contractors or what I like to call vaulters. Vaulters are a secondary company that would actually load their own funds into your ATM that not only number one, you're buying back your time, But number two, they also take care of the maintenance.

13:55So now it's 100 % passive income business and you can own it remotely. So this is going to bring us to a section of the show that we call our Fan Blitz questions. These questions come from our YouTube community. Listeners, you can join that YouTube community by going to youtube.com slash upflip and post questions to future podcast guests. Paul, I've got about eight questions here. We're going to try and do them in about two minutes, all kind of dancing around stuff you've already started talking about. So it'll be great. All right, here we go. So Patrick Barbeau asks, do you need a lawyer to draft contracts between you and each store?

14:25Should you create an LLC first? I would recommend creating an LLC just for personal liability purposes. If you run any business in any industry and something was to happen within that industry, they can go after your house. They could go after your cars. You want that LLC basically to be the balloon coverage for your business to separate your personal assets. As far as the contract, you can have a lawyer do it if you would like. But we also actually provide free templates at contracts at my website, ATMtogether.com. Christopher Schwab wants to know, what are the long-term prospects of the business, given that most countries are becoming more and more cashless every year?

15:02Yeah, absolutely. Roughly in the United States and in Canada, where we have majority of our community, majority of our market, roughly 25 % of the United States still uses ATMs. Yes, that's not a primary percentage of the general population. But at the end of the day, you got to think about it. There are literally hundreds of millions of people living in the United States and Canada. All you need is a very sliver of the pie to make a great return on investment. Karen Smith is asking about scale and is the only way to really grow the business to buy more machines? How do you raise prices to grow profit?

15:34Yeah, absolutely. So you can add other streams of revenue. There is such a thing called a topper. Topper is a computer screen that you can add to the top of your ATM and you can actually advertise other businesses and sell ad space, depending on how many locations you have. These locations, they can pay you anywhere between$50 up to$250 per ad space per location. That's a way that you can scale. And then also you can buy full routes from other ATM entrepreneurs that are looking to get out of the business that already have transaction history, and they have guaranteed return on investment. Jeffrey Edwards Epstein wants to know what the original startup costs were.

16:11Original startup costs was around$2 ,100 for the machine. It was around$150 for the internet modem. It was about seven bucks for the internet monthly service, which at that time I was using Verizon. And then if you don't have a set of tools to actually install the ATM, roughly around $300 to$500. And then the location, it's your time, basically. If you have time to go and find the location, you could go ahead and do that. It's not going to cost you anything besides gas and just your time. Roughly all in, anyone could start the ATM business under$6 ,000. Plockham wants to know if your ATMs ever get blown up or damaged by criminals and what the consequences become for your company in that instance.

16:48Yeah, absolutely. Great question. I've never personally had that happen to me. I've heard horror stories and also in the media. At the end of the day, you do have two options. Number one, you could go ahead and replace the ATM at$2 ,100. Or two, you could actually get liability coverage, insurance coverage by MarshallSterling.com. They cover the actual ATM and the funds inside of your ATM as well. This may be a continuation of that question here from ShintanCG, which is how worried are you about security and liability? It all comes down to strategy. At the end of the day, I know that we always get people saying, well, you know, I'm not comfortable carrying a lot of money.

17:23Well, you got to have a strategy to when you're going to do it. I highly do not advise going to load an ATM midday when there are a ton of customers in the location. And I never advise to go alone. I always advise to go in partners. That way you can have someone look after your back when you are loading the machine and then primarily switch up the times that you also go and load up your ATM for safety concerns. Noel wants to know if you charge tourists or foreign cards more fees and why? That's going to vary based on the actual credit card that they are using. So it's going to vary. Last one here from Rebecca Furman.

17:57How did you find businesses who needed an ATM and did you approach new businesses? Yes, you can actually approach new businesses by visiting your local chambers of commerce where new businesses register every single week. You could go in there, find a list, and then they also have the contact information for any new builds, any new businesses enrolling into the city. And then as far as my strategy, it was simply just door knocking, cold calling. And now in 2023, we actually are doing Facebook ads. So we're bringing in a little bit more digital marketing into play. That is going to do it for the FanBlitz questions.

18:28listeners, let us know what you think of the Upflip podcast by leaving a rating and review on Apple Podcasts. It helps other people find the show and unravel how great businesses are built. Paul, let's talk about the transition now from getting the ATM locations to building that side of the business to then transitioning over to ATM together. How did that whole process occur for you? Yeah, absolutely. So after building about 30 ATM locations myself within 18 months, I was able to cover my bills. I then was back on Facebook. I ended up buying a book on digital marketing, which basically talked about a aspiring entrepreneur, just like myself, that was able to go ahead and build a multimillion dollar digital company off of just providing information online.

19:09I got the idea of doing the exact same thing with the ATM business. I saw that there was really no successful entrepreneurs in the ATM industry that was providing that type of value. And I wanted to be the first one in the market. So I ended up investing in my first program, which was around$10 ,000 on learning digital marketing that I purchased in April of 2020. By September of 2020, I came out with my first program. It was called 30dayatmbiz.com. At that time, I was selling it for roughly about$9.97. And it was just a full informational course on the ATM business and how to launch your own ATM business within 30 days.

19:43From there, I refined my offer. And in January of 2021, I came up with the name atmtogether.com. After studying and researching the online space, seeing what the void was, I saw the void was that most people didn't want to go find their own locations. So what I did is I actually teamed up with several call centers. I teamed up with an ATM processing company and an ATM supplier, and we teamed up and basically created ATM together. I handled the marketing, the client acquisition, and then also the sales portion of the program. We created a done-for-you aspect of the business, which was the first of its kind in the market back in 2021.

20:18By March of 2021, I was still a one-man team marketing the entire program, and I generated$130 ,000 in revenue by myself that month. That month, I then decided to say goodbye to law enforcement to go ahead and scale the business. I sold my home, and at that time, I was living in Warner Creek in the Bay Area. and sold it, ended up moving to San Diego. The reason why I did the move was to get inspired. I just wanted to be in a different environment. I wanted to be near the beach. I wanted to be around other successful entrepreneurs. So I met quite a few people during my time of training down in Southern California.

20:51So while I was down here, my first year, I ended in revenue about 1.7 million off of the program sales from the clients and also from building a lot of ATM businesses across the nation. I then started to build my actual team, which at that time we were about 15 employees in. In 2022, we ended up doubling down and increased marketing expenses. I learned self-education is everything. At that time, I had invested over $100 ,000 in my self-education to learn more about digital marketing. And by the end of 2022, we approached roughly about$13 million in revenue total since the launch of 2021 for ATM Together.

21:31And so far this year in 2023, we had just crossed over$17 million in revenue from this business with 2 ,300 clients nationwide. We've also ventured off to different offers, which include Bitcoin ATMs and also fully passive ATM business built out for clients nationwide as well. I want to talk about the team as you build out the team that can bring with it different challenges. So I'm curious your thoughts on the best way to motivate your team toward achieving company goals and fostering kind of that unified vision and culture of accountability in a business. Absolutely. I actually love talking about this.

22:09Lead by example, guys. Any entrepreneur that is listening to this right now, you're struggling with keeping employees when you're struggling with motivating the morale of the people that work for you. It's you. I always say there's no such thing as a bad employee. There's only bad leaders. And if you're not able to do the job that your current employee is doing, then you need to learn how to do it well and actually present on how it's supposed to be done. I've noticed that employees respect that the most out of the best leaders out there, the leaders that have executed what their current job is doing and also sharing the vision of the company.

22:43At that time, when I started ATM together back in 2021 and also in mid 2021, when I first started hiring my first set of employees, I shared with them where I envisioned the company being at in the next two years. I told them that we're going to cross 10 million. I told them that we're going to have thousands of clients. I already had envisioned it before it actually happened because I just knew inside of me that this program would help thousands of people, not only financially, but it will also motivate them to start a new venture in their life that can completely change the outview of the way they see just absolutely everything.

23:21So share your vision, motivate your employees and lead by example. And you talked about the importance of self-development, that you have continued to invest in your own learning, but I also know that you've invested in your employees' learning. So can you talk about the professional development that you offer your team members and how that ultimately benefits you as a business? Absolutely. That is key to actually increasing absolutely everything in your business is by choosing the employees that you can see leading your troops in the future and doubling down on promotions, doubling down on trainings, doubling down on special events.