What Is A Point Of Sale System?
Definition: The point of sale or point of purchase is the time and place where a retail transaction is completed. At the point of sale, the merchant calculates the amount owed by the customer, indicates that amount, may prepare an invoice for the customer, and indicates the options for the customer to make payment.
A Point of Sale System or POS system allows your business to accept payments from customers and keep track of sales. While this sounds simple, Point of Sale systems are complex, and have numerous features that must be considered before using them.
Why You Need A Point Of Sale System
In this article I will talk about things you should consider as a retail business owner when you are looking for a Point of Sale. I have advised numerous companies on Point of Sale systems, including:
- What system to get
- What terms to negotiate
- How to set-up credit card payment processing systems and what to look out for in terms of merchant fees
- How to create inventory management systems
- How to manage labor hours to increase profitability
- How to understand the large amount of data that becomes available once you go from on old school cash register to digital POS
- Ways to innovate products, menus, and offerings
- Building customer loyalty and rewards programs
- Email, text messaging, and top-of-mind marketing for your best customers
If you’re reading this and going, “wow, this seems like a lot,” it’s because Point of Sale systems can do so much more than what most people are ready to implement, or able to manage while running a small business.
Point of Sale Systems can help you see the health of your business in real time, giving you access to:
- Sales Revenue
- Sales Revenue vs Total Labor Costs
- Revenue per hour to determine peak times and times you can do promotions like a happy hour to drive more business
- Low stock items to plan your next supplier order
- Employee schedules
- Customer insights to engage with people at the point of sale
Selecting A Point Of Sale System
There are numerous Point of Sale systems available offering different features, and at different price points. When you are selecting a Point of Sale system, do the following:
- Write down every feature you NEED
- Write down every feature you WANT
- Understand what payment processing fees are; remember, a lot of companies market benefits that may cost you more later if you do not do your due diligence
- Understand what will integrate, such as gift cards, and what will not
- Have the sales team do a demo for you if you are installing a Point of Sale in more than one location
- Learn what discounts are available; while you won’t be able to discount hardware in most cases, the actual cloud based service can be negotiated down in a lot of cases
- Know your contract terms inside and out
- Don’t finance equipment unless it is really low interest and you know you can pay things off
- Determine how much hardware you will need and what the costs are, or if the system can work on your existing hardware, such as laptops, tablets, and phones
- Determine how you will set-up more complex things such as inventory management that pull from your menus when sold, and how you will go about training your staff to use the Point of Sale system to its full potential
- Open up a spreadsheet and run a side by side comparison of your final choices so you can see everything in one place
Implementing A New Point Of Sale System
Now that you’ve determined what Point of Sale system you want, you will have to implement the system. Implementation may be straightforward for simple businesses, or it may be more complex for enterprise, franchise, and must-unit locations.
When you go to implement your Point of Sale, you will be working with:
- hardware such as tablets
- cloud based software
- cords, cables, wifi, routers, etc. to set-up your internet
- excel files to import data such as ingredients, inventory, and customer data for your loyalty program
It’s important to pre-plan as much as you can and to have an implementation schedule in place so you can do things before you receive the hardware. The more organized you are, the smoother your implementation will go when you install a new Point of Sale system.
Training your team is also important. Take the time to train your team on how to use and make the most of your new Point of Sale system. If there are changes to your loyalty program, you need to support your team members with talking points and instructions in how to communicate effectively with customers.
Point of Sale Business Consultant
When you’re considering a new Point of Sale, consider working with a business consultant. As a business consultant, I help my clients understand what Point of Sale is best for their business; help them negotiate favorable terms; and work with them to implement the technology understanding their business needs while working with the Point of Sale company to execute the rollout.
If you’re considering a new Point of Sale or need help taking your business to the next level with new technology, Schedule a Free call with me today!
