Jun 25, 2020
No matter what kind of small business you own, there’s likely going to be a point of sale: that magical moment when a customer gives you money in exchange for a product or service. And since this transfer is the lifeblood of your business, it makes sense that you’d want to make it as fast, easy, and secure as possible.
Many small business owners remember how difficult it was to use the payment systems of old. There were the notorious credit card imprinters, where you’d slide the handle, remove the carbon paper, and hope that all the relevant information was legible.
Go back in time a few years before that and cash registers weren’t even programmed with product prices. Employees entered calculations on the fly, and the results often weren’t pretty. Some mom-and-pop shops eschewed registers completely and simply kept cash in a box under the counter. Yes, these were rough-and-ready times.
This is where modern point-of-sale systems enter the picture. The size, format, and technology vary. But all of these systems—from a handheld credit card scanner at a farmers market to an integrated network of cash registers in a large department store—are designed to process a transaction electronically in the blink of an eye.
Point-of-sale systems aren’t merely doorways through which your products pass. They’re more like monitors, tracking how many items have been sold and how many remain in inventory. When a customer returns a product, the system makes a note of the transaction and dutifully reflects it in your inventory.
“The point-of-sale system serves as the central component for your business; it’s the hub where everything—like sales, inventory and customer management—merges,” says retail software expert Agnes Teh Stubbs. “As evident as the benefits of a POS system are, we found that 56% of single-store retailers are still not using one. Instead, we found, many are still using a combination of manual methods, cash registers, QuickBooks, and Excel for bookkeeping.”
If your small business falls into the non-adopter category, you should change the errors of your ways immediately. Even if you’re currently using a point-of-sale system, it’s worth evaluating the product’s benefits and considering an upgrade.
Your small business deserves the best, so you’ll need to sift through the various point-of-sale solutions to find your ideal match. This research takes time, but it always pays off in the end.
One of the best places to start is by leveraging your professional network. Talk to other business owners who run operations similar to yours. This is crucial because a point-of-sale system that works perfectly at a seaside gift shop won’t be an equally good fit if it were installed at your local Target.
As you talk to fellow business owners, ask for specific benefits they’ve received from their systems and what issues they’ve encountered. Keep a list of these observations, and you’ll probably start to see 2–3 options rise to the top of the pile.
You should also talk to your business mentor. While your mentor might not have direct experience with point-of-sale systems (especially if they retired before such technology took hold), they can help you consider other aspects of the transaction process that’ll guide your ultimate decision.
After you’ve received feedback from those closest to you, go online to check out professional reviews. Good reviewers will have a deeper understanding of the technological capabilities of point-of-sale systems, making them able to share insights that you and your colleagues might never notice. Just be sure only to read third-party reviews that have been written by people who didn’t receive any compensation in exchange for the review.
Whittling down your list to the best 2–3 options prepares you to make a final decision. Here are some of the key considerations in the process:
This is one of the most important questions to ask. There are so many bells and whistles to compare between various systems, but what really matters is how well it will streamline your operations. When you have a great system in place, your entire team becomes more efficient.
“Effectiveness is the measure of accomplishing the most important objective for your most ultimately beneficial pursuit,” says Business Insider. “Or as Business Dictionary brilliantly puts it: ‘The degree to which objectives are achieved and the extent to which targeted problems are solved.’ As an entrepreneur, you’ve got to constantly reevaluate your efforts against your intermediate and future business objectives. You’ve got to have systems of introspection in place to ensure that you’re not becoming better or more efficient at tasks that have nothing to do with the long-term success of your business.”
Consider all the perks associated with various systems and hold them to this standard of efficiency. Doing so helps you to steer away from unnecessary features and find a system that will benefit your business on a regular basis.
Drawing on your research, you’ll need to decide whether each vendor is reliable and what kind of reputation they’ve built in the industry. If you only stick to reading content from vendors’ websites, plan on seeing plenty of glowing reports. Dig deeper into the third-party reviews mentioned above, and you’ll begin to get a feel for a company’s legitimacy.
Consider as well whether the vendor is established enough to last throughout your adoption of their system. It takes substantial money to develop and market a point-of-sale system, so you want to choose a business that has enough money in the bank to survive the inevitable disasters that hit our nation from time to time. If they are able to withstand these negative events, you can trust that they’ll be around to continue supporting your business.
The fastest and most sleek technology on earth can still become a liability unless it also offers data protection. The data exchanged at a point of sale would be a goldmine for any criminal who steals it, so you need to know where it will be stored and who can access it.
“Few things are as ominous in today’s digital landscape as a data breach,” warns threat detection expert Isaac Kohen. “I know this firsthand through my work in the insider threat detection and monitoring space. Not only do data breaches come with an immense cost, estimated at close to $4 million, but shifting consumer sentiment and increased regulatory scrutiny help ensure that companies will be dealing with the consequences long after the initial expense is paid.”
By making sure your research includes a security element, you can quickly eliminate options that don’t prioritize this component.
There are certain business purchases that don’t carry much consequence: for example, you might decide to try a new air freshener in your restrooms. If the scents are pleasing and you get no customer complaints, you can feel confident in continuing to use these products. If you were to discover that the air fresheners are ineffective, you only lose the small amount of money spent on the products.
At the other end of the spectrum are investments such as point-of-sale systems. Not only will you need to purchase the system and train your team on how to use it, but you’ll probably need to acquire its required hardware. With so much money and effort going into its implementation, you need to be confident that the hardware will be rugged enough to endure daily use.
If a system is cloud-based, you’ll also need to determine how well it will work with your internet. For example, if the internet temporarily goes offline, would your system still be operational?
All business teams feature varying levels of tech-savviness. Some of your younger employees might be avid gamers who build custom computers in their spare time, while other employees struggle to use the office copy machine.
“Companies that offer comprehensive training programs to their staff can enjoy increased productivity and efficiency, as well as higher profit margins as a result of having a better-trained workforce,” says Forbes. “But making sure the training you offer sinks in with your staff can be quite a challenge. Ineffective training leads to wasted time and resources, with unforeseen consequences in terms of costs and performance.”
It’s essential that your point-of-sale system is user-friendly and comes with robust training that helps everyone get on the same page. Among the many options available, ShopKeep and Sunrise offer some of the most accessible point-of-sale products available.
Your system should provide clear sales reports whenever you need them. By capturing details such as product sold, hour of sale, total cost of product sold, total retail amount, net profit, profit percentage, and gross margin, your system will allow you to set realistic goals and better track their progress.
You’ll also need the system to help manage your inventory. When a product is sold, this should be reflected in your inventory. Any product returns would obviously move the item right back into the system. This helps you know when you need to order new products in order to keep your inventory at ideal levels. Your system might even be able to order inventory for you automatically when it hits a certain threshold.
The best systems also track employee performance. Each sales report should identify the employee who handled the transaction so you can use this information to identify top performers and create development plans for those who need extra help.
Any time a customer makes a purchase from your business, the point-of-sale system should connect the transaction with that specific customer. If they’re existing customers, their purchases would be added to the purchase history in their profiles. New customers would get a new profile that includes their name, birthday, age, phone number, and email.
This information is critical to your business’s success. Purchase histories help you to meet the needs of your customer base better, while contact information allows you to send targeted messages to those who’d be most likely to re-engage with your business. The better your business communicates with its customers, the better it will fare in the sales department.
If your business offers a loyalty rewards program, your system should also be able to attach the corresponding points or rewards to each customer’s account following a purchase. This is a valuable way to build loyalty and expand your base.
Most new point-of-sale systems include the hardware for the physical transaction and the software that takes care of all the details behind the scenes. The most affordable solutions use a model such as Square, which provides free hardware that you can simply plug into your tablet or smartphone. There are also no software charges—the only fees are related to the processing of a payment.
If you’re looking for a more robust option, consider Heartland Payment Systems. They provide top-notch hardware and software that allows you to accept any payment method your customers prefer securely.
Another consideration is the hardware and software’s flexibility. For starters, will the software integrate with your existing accounting software and play nice with your website? The best point-of-sale systems make it easy to merge your software for a streamlined experience.
Also, will you be able to choose add-ons later? This great feature allows you to purchase only what you need to get started and to upgrade your system as time goes on. Perhaps you’ll identify an area of transactions that could be improved if you purchase a certain add-on. Or you might have a record-breaking sales month and decide to reinvest some of the money into improving your system’s overall capabilities.
Finally, how easy will it be to add new employees to the system? This is particularly relevant for restaurants and other high-turnover businesses. If you have to jump through multiple hoops every time you want to add an employee, you’ll likely get sick of your system in a matter of months.
The answer to this question varies widely based on your business’s unique circumstances. If you already have hardware in place, you might only need to purchase an inexpensive software solution. If you are starting from scratch, you’ll need to spend more on a full system with both hardware and software.
Be aware that some companies use hidden fees to charge you more. Common examples include fees for downloads, activation, refunds, or early termination. Ethical companies like Heartland Payment Systems are transparent with their fees—they even have a Merchant Bill of Rights that ensures you’ll receive fair processing practices.
If your budget is limited, you might want to consider renting hardware. This allows you to avoid a large up-front fee and grants you more flexibility when it comes to upgrading the system at a later date.
Another option is to purchase refurbished hardware. This can be risky, as warranties can be lower quality on used terminals. But if the price works and you trust the seller, it’s a worthwhile option.
Regardless of what kind of point-of-sale system you purchase, make sure that the vendor will provide the support you need. There will be inevitable hiccups as you train your team and integrate the system into your business. If the vendor stands behind their products and helps you to find resolutions, you’ve got a winner. If they’re prone to leaving your emails and calls unanswered, you’ll waste a lot of time and resources compensating for their inadequacies.
ShopKeep offers some of the best customer service in the industry with 24/7 support and representatives who are extremely knowledgeable. Sunrise and Square are also known to stand behind their systems and resolve any issues.
A point-of-sale system can make or break your business. When it works optimally, your sales increase and errors decline. You’ll be able to stay better connected to your customers and manage your inventory with ease.
Take your time with this decision—gather as many insights as you can. As mentioned earlier, your network and mentor will be invaluable in this process. By drawing upon their collective wisdom, you’ll be able to make a decision that works for you today and promotes serious business growth down the road.
Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.
Jul 6, 2020