It’s a good idea for a Bitcoin ATM operator to start small with a machine or two before thinking about scaling. But if things are going well, what is the best way to grow? This article covers the key factors operators need to consider to successfully scale a Bitcoin ATM business.
Assess Profitability Per Machine
The first thing operators should do before scaling is figure out the profitability of each unit they currently own. With high-performance locations alongside the right hardware and software configuration, the business should be in the green. Still, operators should have detailed insights about each of their machines before buying more.
- How many customers are you getting?
- What is the size of a typical order?
- How does transaction volume vary from one unit to another?
- How much are you paying to source your Bitcoin?
- What percentage of your transaction volume is profit?
These are the sort of questions you’ll want to have answered in order to grow your business in an intelligent and competitive manner.
Understanding the Economies of Scale
The laws of economics applies to a Bitcoin ATM operation as much as it does to any other business. The most expensive units an operator buys will be their first ones. As more machines are added, more money will be coming in, and if the machines are profitable, the cost of running the business per machine goes down, and a successful economy of scale can be achieved. However, it is important to understand that certain costs of running the business will stay the same, while others may increase.
For instance, the maintenance costs per machine will probably not change much if an operator is using the same hardware and software for their whole fleet of Bitcoin ATMs. But by definition, more machines will also mean more total maintenance being done. At some point, an operator may have to hire a dedicated technician to service their fleet- a new cost of scale that a smaller operator wouldn’t need to take on.
Scalable Hardware, Software, and Support
Picking the right software for a Bitcoin ATM business is critical. It is important to not only have software unity across the whole fleet but to pick the best software provider. Not all software is capable of supporting a large number of machines, so it is important to invest in high-quality software. It will be very difficult to successfully scale a Bitcoin ATM business with subpar software that doesn’t track all the necessary metrics, is difficult for customers to use, or experiences frequent technical problems.
Ideally, operators should try to maintain unity across their entire fleet of Bitcoin ATMs- meaning that that physical hardware should all be of the same make & model and use standardized components. This will make it simpler to service machines as needed.
Finally, consider the customer service experience with hardware and software providers so far. If it has been poor, you may want to consider switching your software or even hardware before expanding your Bitcoin ATM fleet any further. If you don’t, whatever problems you’re experiencing now may only multiply in the future.
Keeping these factors in mind, and thinking carefully about how much time, responsibility and resources can be allocated to the business will allow any operator to successfully scale their Bitcoin ATM business.