A point-of-sale (POS) system can help small businesses do more than just handle transactions. It can help businesses streamline their checkout, easily manage inventory and efficiently track sales metrics from a single dashboard.
However, selecting a suitable POS system for small business use can be challenging. This article explores the role of a POS system, the key features to look out for, and the different types of POS systems to assist business leaders in making an informed choice when selecting a POS system.
A POS system is a combination of hardware and software that businesses use to complete sales transactions at the point of sale.
The system typically includes a cash register, a computer, a receipt printer and software that helps manage sales, inventory and employees. Alternatively, a POS system can simply be a card reader that enables the business to accept credit and debit card payments.
A POS system can help streamline the sales process, enhance customer experience and provide valuable insights into business operations. When conducting point-of-sale research, business owners may come across several different acronyms. These may include:
There are different types of POS systems available, each offering different features. It is therefore crucial that business owners select the right POS system for their needs.
For example, if a mobile hairdresser needs a system that enables them to take card payments from customers, a mPOS card reader may be suitable. But if a chain of restaurants wants to manage inventory, bookings, and employees’ shifts, then a full ePOS system may be the right choice.
The benefits of a POS system for small business include:
The downsides of a POS system for small business include:
To help business owners make informed choices when choosing a POS system, it’s vital to choose a system that accommodates the needs of their business type, as well as their cost and scalability considerations.
These could breakdown into:
Once an owner has identified their business type, it can be useful to look at the specific business requirements of a POS system to help them make an informed choice. Taking the business types above, here are some considerations when selecting a POS system:
Beyond the immediate needs of the business, small business owners may also want to consider:
When choosing the right POS system for small business use, another factor to think about in the decision-making process is the future of the business. If the business owner has plans for business growth, they should take into account the scalability of a POS system when reviewing their options.
Businesses that are planning to grow should look at a POS system that can grow with them. If they are planning on opening more than one premises they should factor in the centralised control and reporting capabilities of a POS system. Finally, they should evaluate whether an on-premise or cloud-based system is better suited to their business needs now and in the future.
When reviewing the options for a POS system for small business, it’s crucial to look at the POS features. Some of the key features a small business owner may wish to look for include:
Payment options
Inventory management
Sales reporting and analytics
Integration with accounting software
Employee management
E-commerce integration
Security
CRM integration
Ease of use
Scalability
Customisation
Mobility
It’s important to note, that not all of these features will be necessary and will depend on the nature of the business and its unique requirements.
Beyond the initial price or monthly subscription for a POS system, business owners should factor in the total cost of ownership and any hidden costs that could be incurred further down the line.
When it comes to the total cost of ownership, small businesses should factor in software costs such as licensing fees and any additional charges for software updates. They should also consider the hardware costs, for example the terminals and card readers.
Other factors to think about include the costs of training staff to use the new system and any fees that may be applicable for integrating with a CRM or accounting software. While many of the costs will be transparent, there are some potential hidden costs small business owners should be aware of.
These include:
Some of the more affordable options for small businesses include cloud-based solutions that often have lower upfront costs and work on a subscription model to help spread the cost.
Another option is a basic POS system that can scale. Small businesses can begin the transition to a POS system with the essential features they need and expand as the needs of the business change. This can potentially help keep costs lower as unnecessary features may inflate the costs.
Small business owners in the UK may also wish to explore lease options, where they lease the hardware to reduce the initial investment.
When it comes to the types of POS systems there are two different types. These are cloud-based systems and traditional POS systems. A cloud-based POS system works on remote servers that are accessed over the Internet. The data collected from the system is then stored and processed in the cloud.
A traditional POS system works on on-site services and does not need constant internet access. The data collected is stored and processed on-site.
The advantages of cloud-based POS can include:
The disadvantages can include:
The advantages can include:
The disadvantages can include:
Choosing between these two types of POS systems will depend upon the nature of the business, the requirements of the business and any budget constraints. Small businesses with a limited upfront budget, those with multiple locations or needing remote access may want to consider a cloud-based POS system.
Small businesses with complex requirements and in-house capabilities to manage and maintain on-site servers or those that have limited internet access may wish to look at a traditional POS system for their business.
The importance of comparing POS systems for a small business lies in making an informed decision that aligns with the unique needs and goals of the business.
Some areas to look at include:
Successful POS integration is pivotal to its success. Business owners may wish to consider POS integration and how this will be implemented. Is this something the provider handles, or will the small business need to do this?
Businesses should also consider whether any data from the existing solution needs to be migrated and how this will be completed. Being clear on what is needed for integration can help a smooth installation.
Once the POS system is installed, business owners should then consider staff training to ensure they are proficient in using the system. Think about the different needs of staff and the areas in which they may require training.
For example in a restaurant, the restaurant manager may need to be trained on all aspects of the POS system. But waiting staff may only need training for the basic features they will use as part of their role.
As part of the training process, it’s also important to ensure staff are aware of how to report an issue and the available support channels. Knowing this process can help reducedowntime and increase efficiency. Business owners may also wish to develop a troubleshooting process for common errors to reduce disruption should an error occur.
As things change with the system as a result of updates or upgrades, business owners should schedule regular training sessions to ensure staff are familiar with best practices and new features.
Ensuring the protection of customer data is not only a legal requirement in the UK but also a crucial factor in building trust and enhancing customer confidence. Small business owners should prioritize working with POS system providers that demonstrate a strong commitment to data protection standards, including adherence to relevant laws and guidelines. This commitment is essential, as highlighted by the UK Government's guidance on data protection1.
While understanding data protection regulations like GDPR is important, the emphasis for small businesses should be on implementing practical measures to secure customer information. These measures may include:
With the application of these practices, small businesses could better manage data security and comply with legal obligations, reinforcing customer trust and confidence in their operations.
In the pursuit of small business success, the choice of a suitable POS system is a crucial decision. To navigate this decision-making process, small business owners in the UK should consider their POS system requirements and evaluate the different types of POS systems and providers available.
Selecting the right POS system for small business can not only help manage transactions but can equip small businesses with the tools they need to streamline operations, customise marketing communications and simplify inventory management.
Explore how PayPal Business solutions can help small businesses accept payments securely online and in person.
Simply complete the form to receive valuable info and actionable tips for your business. Plus, you'll hear from fellow merchants who use PayPal to help reach their goals.
If you accept cookies, we'll use them to improve and customise your experience and enable our partners to show you personalised PayPal ads when you visit other sites. Manage cookies and learn more