Gedam Yonas, the CEO of ATM Together talks about the most essential segments for any Bitcoin ATM Business. From location to compliance, he covers all the basics.
Before he dug into the bullet points, Gedam explained how the Bitcoin ATM business works. As an operator, you are basically a broker or a middleman, who earns money on transactions, regardless of the Bitcoin value. As a matter of fact, market fluctuations can increase interest and result in more people using the machines.
The Administration
The first thing you need to do when starting any business is to form a business entity. Gedam advises to always form an LLC (Limited Liability Corporation), with the reason being the protection of your assets. We live in a society where a lot of people are looking to earn easy money by lawsuits, and the worst thing that can happen is to grow a profitable business and somebody takes it from you because of something unrelated. LLC will protect you from these scenarios. He also says that it’s much better to be modern and do that online. It’ll save you a lot of time that you can spend on organizing other stuff. It will also get you up and running sooner, which can be crucial in today’s crypto market.
After you got your LLC, it’s time to establish your banking. This is still one of the biggest challenges when starting a Bitcoin ATM business simply because banks still see you as a competition that’s more modern and can be profitable quickly. In that sense, you will need to outsource certain processes to make your business compliant with that bank or just find a bank that works with Bitcoin ATM operators.
The Hardware
Of course, there is no business if you don’t have an actual Bitcoin ATM. When it comes to hardware, Gedam is strong of the opinion that you absolutely need to buy a brand-new two-way machine. Currently, 90% of the machines are buy-only, but the trends are changing and people are increasingly looking for an option to also sell their crypto. This is especially due to the fact that Bitcoin ATMs are more and more used for purposes of remittance or even currency exchange. So, if you offer both options it can really separate you from the competition and bring some serious revenue.
The Location
The make or break of any Bitcoin ATM business is the location. There are a couple of factors you need to count on when choosing a good location for your machines.
First of all, you need to look for a location with the longest working hours possible. It’s simple, the longer the hours, the more chance the people will use the machine. Gedam also points out that in the real world, it’s highly unlikely to land a 24-hour spot.
The second thing you need to consider is the foot traffic. The location should have at least 75 people a day. This maybe doesn’t look like a lot, but if you look at the bigger picture – if 75 people go into that location, it probably means that there are hundreds of others passing by. These are all potential customers.
The next should be accessibility. You always want to encourage people to make the biggest transactions possible, and in that sense, you should put yourself in the position of people carrying several thousands of dollars. These people will not want to walk a mile to the machine. They would want a garage or a parking lot with a secure path to the Bitcoin ATM.
Last but not least should be the merchant. This is something that most of the operators disregard, but it can be a big difference. If a person working at the location is negative and not motivated, it can drive customers away. Especially because Bitcoin ATMs are a gateway for newcomers to the industry. A motivated and proactive person, on the other hand, can help you grow your revenue together. Whether it’s simply promoting your machine or providing help to customers who are not sure how to use it. You must take into account that the seller is the one that customers will associate with your machine.
Cash and Crypto Management
After all that is done, you’ll need to create a cash management plan. Hopefully, your Bitcoin ATM business will generate a lot of money, and the last thing you want to do is go to the location to pull out the cash and then go to the bank to put it into your account. Ideally, you would want to outsource this to an armored car company.
Also, you would want to have Fulfillment a plan for the crypto. Topping up your wallet is very important because you wouldn’t want to have a customer at the machine trying to buy crypto while your wallet doesn’t have enough funds. It will drive them away.
The Compliance
The last thing you have to tackle is compliance, and as Gedam explains it is not optional. He compares it to not paying your taxes. It’s pretty certain that your machines will be shut down if they aren’t properly registered. So, don’t look at it as an additional cost, it doesn’t matter how much money you “save” by not being compliant, after your Bitcoin ATM is compounded you will not make any money anymore.
Summary
In short, Gedam says that the crucial requirements for any Bitcoin ATM business are forming an LLC to protect you from malicious people, a two-way machine to stand out from the competition, high working hours, and a high foot traffic location owned by a positive person together with established compliance and cash/crypto management plan. If you manage to combine all of these, success is very probable.