You’ve decided to open a restaurant. Congratulations! Running a business is a huge endeavor, and as a business owner, many important decisions will fall in your lap.
They all require a lot of research and planning, but one of the most straightforward choices you can make is selecting a point of sale (POS) system. Traditional on-premise systems may tempt you, but choosing a modern restaurant POS app will serve you better in the long run.
POS App vs. A Traditional POS
Modern point of sale systems are much different than traditional ones. When thinking of a traditional or on-premise POS system you might envision those large touchscreen computers that waitresses and waiters use in chain restaurants. While common, they have their downsides. First, their price is outside the reach of most small businesses. Not only can the POS software that these systems use cost up to thousands of dollars, but you also need a variety of hardware components to flesh out a full system. This can also cost thousands of dollars depending upon how many POS terminals you need. Second, despite their expense and popularity, these systems lack the ease of use and cutting-edge features that more up-to-date systems offer.
The alternative is a POS app. These are normally cloud-based and run on a mobile device like an iPad or Android tablet. Getting set up is often as easy as downloading the software to your iPad. A POS app functions similarly to a traditional POS. You can complete transactions and track your business, but they usually have modern software that features and a more intuitive layout. These apps are also typically cloud-based, which allows you to monitor your business from anywhere. So, if you’re ever on vacation or even stuck at home, you can always check in to see how things are running.
The Cost and Complexity of an On-Premise Restaurant POS
As we mentioned, choosing an on-premise POS for restaurant requires a sizeable financial investment. The are several reasons why this is the case. First, on-premise POS software is paid for up front. This means that you pay one lump sum for a license to the software. You’ll also need to buy or lease the hardware that the software runs on, and that your staff uses to input orders, ring up customers, and more on a day-to-day basis. For a restaurant that usually means a desktop computer that’s connected to a touchscreen monitor. Often this hardware is proprietary, which adds to the expense. If you ever want to use an updated version of the software, you will almost always need to buy a new license for it as well. Everything together can cost a business up to $50,000 annually, outside of maintenance and servicing fees.
Traditional POS systems almost always have a lengthy and complicated installation process. To install the software on your registers, you’ll have to have someone from the POS vendor or reseller come in and install the software for each terminal individually. Then, if you ever have an issue they would have to come back into your restaurant for maintenance. You would even have to call someone back in to install any updates your system needs. Every time something happens with your POS system it’s going to cost you.
SEE ALSO: How to Choose a Point of Sale System
Costs For a Cloud-Based POS
A POS app or cloud-based POS system cuts down on cost in various ways. For one, the hardware is less expensive. You just need an iPad or Android tablet to run the software. Things like a receipt printer, a credit card reader, and a cash drawer complete your terminal set up, just like you would need for an on-premise system. The difference is that these hardware components are often universal, dramatically lowering their cost. You can also add a barcode scanner if you have a retail component to your business (branded t-shirts anyone?). Receipt printers can average about $150-$400, barcode scanners about $50-$150, credit card readers go from about $50-$150, and cash drawers from $50-200.
The software is less expensive as well. Cloud-based systems are typically paid for through a monthly subscription and any updates you need are downloaded directly to your POS just like an app on your phone. These updates are usually free which lowers the cost overall cost of your system and easily keeps you up to date with the latest features.
For many small businesses, price is one of the biggest factors when it comes to things like this. If you’re choosing a traditional POS system you’re already paying more than you would with a modern, cloud-based restaurant POS app. This could mean sinking a lot of money in the wrong areas of your business. Investing in a modern POS allows you to save money so that you can invest it in other areas of your business like marketing and purchasing inventory.
Price is important, but you’ll also want to look into a system’s ease of use and overall functionality before choosing a vendor.
Run Your Business More Easily
Modern POS systems simplify the work environment for owners, management, and staff. You can manage the entire business directly from your POS. When choosing one, make sure it includes the following features and business tools:
- Employee Management: Make your staff’s schedules, monitor when they clock in or out, and gain insight so you can manage their performance.
- Inventory Control: Keep track of your inventory by having it automatically update each time a sale is made. You can also get alerts when items run low so you know when to reorder stock.
- Reporting and Analytics: Keep track of everything like what your busiest times of day are and what dishes are your best sellers and worst performers with reports that are automatically generated by your POS.
- Customer Relationship Management: This allows you to keep track of how customers like to pay, what their favorite payment methods are, and how long they have been shopping with you.
- Marketing Tools: You can track how well your customer loyalty program is performing and send emails to customers you haven’t seen to motivate them to come back to your restaurant.
- Alternative Payment Methods: Not everyone wants to pay with a credit card anymore. Give your customers more options by allowing NFC payments like Apple Pay and Google Pay so all a customer needs is their smartphone. Gift cards are another payment option but they can also double as marketing for your store.
All of these aspects are important to the longevity of your business, but the reports your POS provides keeps track of your business even when you aren’t there. You can use these reports to make decisions that will drive you toward success.
The Benefits of Reports and Analytics
Whether it’s a quick-service restaurant or a full-service restaurant and bar, you’re going to need reports to run a successful business. A modern POS system also allows you to view data in real-time as well as access historical reports about your restaurant operations from anywhere. As long as you have a connection to the internet you are always aware of what’s going on in your business.
These reports help you with various aspects of your business like inventory, calculating your cost of goods sold, keeping track of sales performance, and even monitoring your top customers and how they’re paying. There are reports to help you keep track of your staff as well. So you can monitor if they’re clocking in on time and how many sales they complete.
Traditional systems make this process much more difficult. Would you like to swim in a sea of spreadsheets? You’ll have a lot of spreadsheets to file and organize with an older system. And if you need to update those spreadsheets and you’re on vacation, you’ll be out of luck because you can only access that data within your restaurant. There’s no quick and easy way to check up on things. A cloud POS gives mobility and the power as a business owner to always be on top of your restaurant.
Manage Your Front and Back-of-House With Ease
As a restaurant owner, you know that what goes on behind the scenes of your business is just as important as your seating area up front. The two halves need to communicate effectively to give your customers and staff a great experience in your business. With a modern POS system, it’s much easier to have your entire business work together.
In terms of the front-of-house, You can take a cloud POS or mPOS (mobile POS) anywhere in the restaurant. Pick up a mobile device and take an order directly at a table. Avoid the human error of notepads and scribbles that look like food scraps. This is especially handy during big lunch and dinner rushes or if customers have tricky orders. Waitstaff can easily modify orders to give customers exactly what they’re looking for. Then, as soon as waitstaff finishes taking the order it can go directly to the kitchen with no middle man involved.
For the back-of-house, the staff doesn’t have to squint to read orders. Kitchen printers connect with your POS system as well. When you take a food order it goes straight to the kitchen in an easy to read format.
Similarly, when the head chef or management staff know what inventory they have available, they’re able to better stay on top of what the restaurant needs. They can help determine menu items based on what’s available and the best ways to cut down on food waste.
Choosing a POS
Now that you know what to look for when deciding on a POS, it’s time to pick one. The market for cloud POS systems is huge and that gives you a lot of options to choose from. However, not all of these options will work well for you, so you’ll need to make the choice that’s best for you specifically and not small business owners in general. Here are some options for you to choose from.
ShopKeep offers a comprehensive tablet POS solution that allows small business owners the cash register capabilities needed while giving the owner complete insight into their business. Reporting and inventory management are both specific strengths of ShopKeep. Both tools give as restaurant owner the ability to stay on top of the day-to-day of their business, while also tracking larger macro trends. ShopKeep also includes Pocket, a mobile app for iOS and Android, which allows you to access critical business data on your phone so you can monitor your restaurant from anywhere.
ShopKeep also features low monthly payments that are much easier to manage than spending thousands of dollars of software up front. This gives you a little more free with capital and how you invest it manage to grow your business. You also never have to worry about updates since everything is easily downloaded straight to your POS. This eliminates the downtime you would need to otherwise have maintenance come in and install the update on your pos terminals individually. And if any issue ever arises there is 24/7 customer support.
Square is known for its dongles that plug into smartphones enabling them to take payments. They also offer a full restaurant and retail POS system. However, this is a relatively new addition to their line of products and services, meaning that it lacks many of the features that a busy restaurant typically relies on.
As far as cost is concerned, you pay $60 per month for your first POS terminal. It’s $40 per month for each additional one. The big difference between Square and other options is that you need to use Square’s payment processing. For restaurants, you’ll pay a fee of 2.6% and 10 cents per transaction. While this flat-rate makes projecting processing costs relatively straightforward, there’s a good chance that you can save money by working with a POS system and processer that uses an interchange-plus pricing model.
The restaurant business is a tough one and the last obstacle you need is one related to your point of sale system. Your POS should make the everyday life of your restaurant an easy one for not only you but you’re employees and customers. With the right understanding of the market, and the tools you need to run your unique business, picking a restaurant POS app is as straightforward as a simple evaluation of the pros and cons of each.