How To Choose The Right POS System For Your Small Business
Gone are the days when advanced Point of Sales (POS) systems was only available to large enterprises. Thanks to technological advancements, small business owners now have a wide variety of POS systems available. Whether you are a retailer or a restauranteur, there is POS available for every need.
But choosing a POS system can be tricky, especially when today’s POS systems do more than just manage sales. Modern POS systems can track and analyze data, integrate with CRM solutions, and accounting software, and are all slowly becoming cloud-based software.
However, startups may not be able to avail themselves of these features due to pricing or budget. When it comes to choosing the right POS system for your small business, there are several factors you need to consider.
61% of businesses had to upgrade their POS systems
Examine Your Business Needs
The first step in choosing a POS system for your small business is to examine your business needs. Once you have these laid out, it’s easier to pinpoint what features to look for in a POS system. The needs can vary from industry to industry. POS systems can cater to retail, restaurant, and hospitality industries.
These questions will help give you a clear picture of what your business requires:
What are your business struggles?
Many businesses choose a POS system to solve specific problems. Maybe you need a better way to manage inventory or keep track of customers. Perhaps you want to improve your customer service or cut down on accounting errors.
Before you start looking at different POS systems, make a list of the common problems your business faces. If you already have an existing POS system, see its missing features.
What hardware do you need?
Hardware refers to the front end of your POS systems. Before browsing for options on the market, it helps to know what your POS hardware needs are. This way, it will be easier to ask for cost estimates from POS vendors.
Most small businesses only require a basic setup. Some hardware needs are common among POS systems, such as a touchscreen display for the cashier, a receipt printer, a barcode scanner, and a customer-facing display.
In addition to this basic list, you may need extra hardware depending on your business type. For example, if you’re a restaurant, you may need a kitchen printer to print orders for the cooks. Think about what machinery is crucial for your business processes.
Best POS Systems for Small Businesses
Advanced inventory management capabilities
Smarter sales & reporting 
Process digital wallets & popular payments
Personalize marketing to boost loyalty 
Free setup & no hidden fees
Create customer profiles in seconds What software do you need?
Software is a vital component of a POS system since this is what will power your hardware needs. There are many software features to consider when choosing a POS system. To start, you need to decide which basic features your business needs.
Inventory management is a must for most businesses. A good POS system will offer inventory tracking, so you can see what’s in stock at all times. This is especially important if you have a large inventory or sell products with a short shelf life.
Another software feature to consider is employee management. A POS system can help you track employee hours, sales, and performance. This is valuable information when it comes time to dole out raises or bonuses.
Some businesses may also need a POS system that can accept gift cards and loyalty programs. If this is the case, you’ll need to make sure the POS system you choose has these capabilities. LightSpeed, for example, has a loyalty scheme feature that works on both physical and online stores.
Take note also of what software you already use so that when you’re researching options, you can check whether the POS system you’re considering is compatible.
What is your growth plan?
While your current needs should be your main focus, it’s also important to consider the future of your business. Are you planning on expanding your business? If so, you’ll need a POS system that can accommodate future growth to succeed.
For example, if you eventually plan on opening additional locations, you’ll want to make sure the system can support multiple stores. Or, if you’re looking to launch an online shop to support your brick-and-mortar store, you would want a system that can work in different channels. Flexible POS systems, like Clover, offer the ability to add on features and functionality as your business expands.
If expanding is part of your roadmap, choosing a POS system that is not scalable may result in a wasted investment, as you’ll have to start looking for another vendor.
What is your budget?
Your budget will be one of the biggest deciding factors when choosing a POS system. You need to consider how much you’re willing to spend on hardware, software, and installation.
When it comes to POS systems, you get what you pay for. But don’t make the mistake of thinking that the most expensive system is always the best—sometimes, mid-priced options have features that are just as good as those offered by top-of-the-line POS systems. The key is to find a system that meets your needs without breaking the bank.
Some POS vendors also offer a free trial or free plans that come with basic features. One example is ShopKeep’s free plan, which allows you to register one employee. If you have the time and you’re not willing to commit yet, you can test out these POS systems with a free trial to see if it’s the right system for you.
Determine Your Type of POS System
There are several types of POS systems available. The most popular type of POS system may not be the right one for a small business like yours, so it’s important to know the difference between each one. The type of POS system a business chooses will depend on its specific needs and requirements, including the size and type of business, the type of products or services it offers, and its budget.
Traditional/Desktop POS Systems
These systems consist of a dedicated computer or terminal connected to peripheral devices such as a barcode scanner, receipt printer, and cashier. They are typically used in brick-and-mortar stores and restaurants.
Mobile POS Systems(mPOS)
These systems use an Android tablet/iPad or smartphone as the main component and are often combined with a portable credit card reader, mobile printer, and other accessories to form a complete solution.
mPOS systems are ideal for businesses that need to process sales transactions on the go, such as food trucks, markets, and pop-up shops.
ePOS System
An ePOS system refers to a dedicated electronic device. An ePOS system typically consists of hardware components such as a computer or terminal, barcode scanner, receipt printer, and cash register, as well as software that enables the processing of sales transactions, inventory management, customer management, and reporting.
Additionally, ePOS systems provide businesses with valuable insights into sales and customer behavior through real-time reporting and analytics. This information can be used to make informed business decisions and improve overall performance.
ePOS systems can be either traditional/desktop systems or cloud-based systems, depending on the specific requirements of the business.
Cloud-Based POS Systems
These systems use cloud computing technology to store data and provide access to the system from anywhere with an internet connection. They are ideal for businesses that need the flexibility to manage their sales from multiple locations.
Self-Service POS Systems
These systems are typically used in quick-service restaurants and retail stores, and allow customers to place their own orders and make payments at a kiosk or self-service terminal.
Kiosk POS Systems
These systems are similar to self-service POS systems, but are designed specifically for transactions made in high-traffic areas such as theme parks, stadiums, and airports.
Tablet/iPad
This type uses a tablet or an iPad to access POS software. Tablet POS systems work similarly to mobile POS where you can carry it around to make transactions. Still, it can be a cost-effective alternative to terminal POS since it also supports swivel stands, barcode readers, and cash drawers.
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Prioritize the POS System Features You Need
There are things to consider when choosing the best POS system for your small business. Often, POS vendors will boast of their wide range of offerings, and while all of them may be useful to your business, it would be wise and also cost-effective to prioritize the features you need the most. You can do this by reviewing your business needs and matching their POS system features.
Payment Processing
The payment processing feature of a POS system is a crucial component as it allows businesses to accept and process various types of payment transactions from their customers. This feature allows businesses to process payments quickly and securely, providing customers with a fast and convenient checkout experience.
Payment processing typically includes the ability to accept credit and debit cards, as well as alternative payment methods such as mobile payments, gift cards, and electronic checks. The system can also include integrations with payment processors like Apple Pay to give an example to ensure that transactions are processed securely and that sensitive customer information is protected.
Overall, the payment processing feature of a POS system is an essential component for businesses looking to streamline their operations and improve their customers’ checkout experience.
Inventory Management
Inventory management is a key element when choosing the best POS system for small businesses. Investing in good inventory management software helps prevent losses and reduce monthly business costs.
Thanks to technology, POS systems now have time-saving capabilities such as making key measurements on what stocks are needed on-hand, deducting sold items from your inventory, and automating stock audits.
These functions serve businesses with a large inventory the best. But if your business deals with a small or limited inventory, with items that have little variety, perhaps an advanced inventory management feature will not be cost-effective.
Study how you currently manage your inventory and look for POS system features necessary for your process.
Reporting and Analytics
If you want to improve your business, it all starts with understanding where you’re currently at. A POS system that offers comprehensive reporting and analytics can give you the insights you need to make better decisions for your business.
Beyond the typical security measures like lockable cash drawers, it should have features to safeguard your POS data.
The data collected by your POS system can show you valuable information such as which products are selling, what time of day is the busiest, and even which of your employees are selling the most.
Investing early on in advanced reporting and analytics capabilities may save you from future upgrading costs. A 2019 report detailed how 61% of businesses had to upgrade their POS systems to include such features to understand their customers better.
Security
Make sure that the POS system you choose has a robust security system in place to protect your business and payments. Beyond the typical security measures like lockable cash drawers, it should have features to safeguard your POS data.
According to IBM, the average cost of a data breach in 2021 is $4.24 million
POS data is the lifeblood of your business. This is what you refer to make smarter decisions that could help your business grow. Therefore, it must be protected from any security breach that could happen.
This is because customer data, including payment, transaction history and credit card information, is stored in the POS system. If your business becomes a victim of cybercrime, it could incur expensive consequences. According to IBM, the average cost of a data breach in 2021 is $4.24 million.
Customer Support
You’ll want excellent customer support for any concerns regarding your POS system. After all, your POS system is critical to your business’s operations. The last thing you need is for it to crash during a busy day and not be able to get help right away.
When considering a POS system, ensure that the vendor offers excellent customer support. Check if they have a 24/7 service and see what channels you can reach them on, like phone, live chat, email, or a help center. It also helps to request a point person from their team.
Best POS system for small businesses
Gusto
Gusto is a comprehensive payroll solution designed for small businesses. It automates payroll, benefits, and HR tasks, making it easy for businesses to manage their employees and stay compliant with tax regulations. With Gusto, small businesses can access a wide range of features, including payroll processing, direct deposit, employee onboarding, and benefits administration, all in one easy-to-use platform.
Paychex
Paychex provides a user-friendly platform, with features such as online payroll processing, direct deposit, and real-time reporting, to make it easy for businesses to manage their payroll and HR tasks.
Onpay
Onpay is a cloud-based payroll solution designed specifically for small businesses. It offers a range of features, including payroll processing, tax compliance, direct deposit, and employee self-service, to help businesses manage their payroll and HR needs with ease.
See What Other Small Businesses Are Using
One of the best ways to choose a POS system is to see what other businesses are using. Once you have a few options, you can start researching each one.
When you read POS system reviews online by reputable sites, you may also check out the user reviews to see if the claims by the POS vendors hold up. Here on Sonary, we also have a comparison section that you can use to see the features of your prospects side by side.
