Did you know that about one in five small businesses fails within its first year, and about half close within five years? If you want your business to beat the odds, you need to do everything you can to maximize your chances at success. One of the best steps you can take towards this is to get a POS system.
A POS system can revolutionize the way you run your business. Read on to learn more about how these systems work and why you need one.
What Is a POS System?
Before we dive into the specifics of how POS systems work, let’s talk about what they are first. A point of sale system is a tool that helps make your checkout process as smooth as possible. This system can be as simple as a chip reader plugged into a smartphone or as complex as a multi-store specialized system.
A POS system has several primary components: a list of stock, a checkout interface, and a sales reporting system. It may also include a customer loyalty interface and different employee portals. In essence, it’s everything you need to make a sale quickly while still gathering all the information you need during a transaction.
Why Do You Need One?
There are several good reasons to get a POS system, starting with your customer experience. Being able to avoid writing out receipts or punching complicated product codes into a cash register will cut your check out time in half. Customers who are in a hurry will have a smoother experience if you’re working with a POS system.
A POS system can also give you crucial insights into your sales patterns. There’s no reliable way to get a real sense of what merchandise is moving fastest and which marketing materials are working without sales reports. A good POS system can make generating those sales reports as easy as pressing a button.
Getting a POS System Set Up
There is a fair amount of front-end work that will go into getting your point of sale system set up. The biggest task will be importing your inventory into the system. You will need to have an accurate accounting of every piece of merchandise you offer in your system.
If you already have a digital inventory of your merchandise, you may be able to import that into your new POS system. If not, you might have to set aside enough time to add this inventory by hand. Is your business is closed due to the coronavirus lockdown right now? Then this may be an excellent opportunity to undertake this tedious task.
You should also import any customer records you have into your point of sale system. Set up a login portal for all employees, and set up an account with information like your local tax rate and any discounts you offer.
Once your inventory is input into your POS system, this can be an amazing tool for keeping up with what you have and what you need. You can check your stock of any given item with just a few clicks. Not only will this save you time digging through back stock rooms, it can also help you keep up with product loss.
The key to having a solid inventory management through your POS system is to keep it up to date. Your system will take care of removing items as they’re sold through the platform. But each time you get a shipment in, be sure to add that new inventory to your system logs.
Your POS system can also be a great tool for managing customer profiles. Growing and rewarding customer loyalty can make a big difference in the success of your business. But keeping up with one specific customer on paper can be difficult.
Your POS system will be able to add new customers every time one comes in and can easily and automatically track your regulars. You can see who your top customers are and set up rewards. Some POS systems will even allow you to automatically generate customer reward emails to keep your regulars coming back for more.
As we mentioned, keeping up with your sales records is the key to running a successful business. Without this data, you’re flying blind, hoping that what you’re doing is the best thing for your business. But the best companies are built on data, not lucky guesses.
A POS system can let you run dozens of sales reports in just a few minutes. You can see what days you sell the most, what your peak sales hours are, and what products are selling best. You can also track how your sales change in response to promotion campaigns and discount sales so you know how to effectively leverage your marketing.
Handling Credit Cards
These days, carrying cash has become relatively uncommon. Most people find they don’t need it as often, and personal checks can be unreliable, especially for small businesses. The currency of the day is plastic, and if you want to keep up with your competitors, you need to be able to accept credit cards.
Although it’s true you don’t need a POS system to accept credit cards, it certainly makes the process easier. The debut of credit card readers like Square, PayPal, and Clover have put credit card processing into the hands of the people. You can just plug a reader into your smartphone and be off to the races accepting any payment form your customers have on hand.
Taxes are a subject none of us enjoy thinking about, but they are a crucial part of running a business. Without a point of sale system, calculating taxes can become a grueling manual process. You’re also much more likely to make mistakes that can cost your business in the long run.
A POS system can make calculating taxes as easy as running sales reports. You’ll have a record of all your sales in one place, and your system will have a place for you to input your local sales tax rate. You can run your tax amount every month effortlessly and send in the check, confident that your taxes are being handled properly.
Training Employees on How to Use a POS System
When you’re getting started with a POS system, you will need to train your employees how to use it. The difficulty of this task will depend largely on which system you pick. Luckily, many point of sale systems these days are designed to be fairly intuitive to use, and most of them offer training resources.
Be sure you train your employees on how to run a basic sale, including how to find specific items. You need to walk them through how to add items if something isn’t there, as well as how to change quantities and remove certain items. They need to know how to cancel a sale, how to issue a refund, how receipts are handled, and how to add specific discounts.
On-Premises vs. Cloud
There are two main options for where a POS system is located: on-premises vs. on the cloud. For an on-premises system, you purchase the POS system and its required hardware up front and then maintain updates yourself. This requires a higher up-front investment, but it can be a good way to maintain control over your system.
A cloud POS system allows you to access your POS software from any device. Any software updates are pushed to your devices, and you’ll have access to a corporate team of IT experts in case things go wrong. These systems can be cheaper on the front end, but they do leave you in less direct control of your system.
There are a few primary pieces of hardware you’ll need to run a POS system. The first of these is some sort of a monitor or display system. This can be a tablet, a smartphone, or even a computer.
You’ll also need a credit card reader with both chip reader and magnetic strip reading capabilities. Depending on your setup, you may want a barcode scanner and a receipt printer. And you’ll need a cash drawer to handle the cash transactions that run through your system.
Choosing Among Types of POS Systems
When you’re deciding among POS systems, there are a few things you’ll want to look for. First of all, you should consider the scale of your operation. If you’re running a business with four employees, you don’t want to get a system designed for a major corporation, or vice versa.
You should also consider what your priorities are with the system. If you want something that will make inventory handling a breeze, focus on the systems that provide the most features and support for inventory management. If you’re looking to build your customer loyalty, consider a system that can integrate with your email campaign tool.
Find the Right POS System for You
When you’re starting up a business, having the right POS system can make the difference between success and failure. Access to simple sales reports and easy tax and inventory management can help you make sure you’re following the best practices for your business. Make sure you find the system that has the right capabilities for you. Also make sure you train all your employees on how to use it.
If you’d like help getting your business off the ground, check out the rest of our site at Your FundingTree. We can help you get the right small business loan and give you advice on how to prime your business for success. Apply now and start making your business dreams a reality.