Gone are the days when advanced Point of Sales (POS) systems were only available to large enterprises. Thanks to technological advancements, small businesses now have a wide variety of POS systems.

But choosing a POS system can be tricky, especially when today’s POS systems do more than just managing sales. Modern POS systems can track and analyze data, integrate with CRM solutions, and more.

However, startups may not be able to avail themselves of these features. Hence, it’s essential to figure out the ones you actually need. 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.

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. These will help you find a system that offers the features and functionality you need to overcome your struggles.

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 touch screen 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.

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.

Before you start looking at different POS systems, make a list of the common problems your business faces.

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.

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 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.

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.

  • Terminal – the most common POS and is often used at checkout counters. They usually come with other components like a cash drawer, barcode scanner, and receipt printer. This type is typically used by retailers and restaurants.
  • Mobile – refers to POS services that users can access through a smartphone. This often comes with a portable receipt printer and a card reader. It’s ideal for businesses that do not have a large inventory.
  • Tablet – this type uses a tablet 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.
  • Online – a POS system that relies primarily on web-based software. You can use your own hardware (PC, tablet, or smartphone) to access it. This is recommended for businesses with low sales volume.
  • Self-service – a POS system designed for customers to pay on their own. It comes in the form of a kiosk and is typically used for ticket sales.
  • Multichannel – a POS system that allows you to manage both offline and online sales from one place. This is useful for businesses that have physical stores and online orders.
  • Open-source – this POS system can be customized to your business needs. It may sound cost-effective at first, but it requires a lot to maintain. It is usually recommended for large enterprises and tech-savvy businesses.

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.

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 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.


Make sure that the POS system you choose has a robust security system in place to protect your business. Beyond the typical security measures like lockable cash drawers, it should have features to safeguard your POS data.

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 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.

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. If you have friends or family who own small businesses, ask them what POS system they use and if they’re happy with it.

You can also join groups on social media to gain insights. LinkedIn is a great place to start because it’s easy to find entrepreneurs from the same industry as your business.

Once you have a few options, you can start researching each one. When you read 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.