Replacing your cash register and payment processing terminal with a point of sale (POS) system is a great way to take your business to the next level. Few purchases can have as dramatic an effect on your retail or hospitality business as a POS system.

A well implemented POS system can give you a new level of control over your operations, increase efficiencies, boost profits and help you fine-tune your business model. In addition to efficiency gains over your cash register, POS systems provide information and reports that can help you make more informed business decisions.

Conversely, the wrong POS system can multiply your headaches and cause you to spend valuable time and money on supporting a technology that distracts you from running and growing your business.

By reading this article, you will learn how to make an informed POS purchase decision. Knowing what questions to ask will help you avoid the mistakes of a first time buyer.

DO YOUR RESEARCH - Spend time evaluating POS companies

Finding the right POS software for you takes time and effort. It's an important decision that will effect how your business operates. Make sure you do your due diligence and research several companies.

When choosing a POS system, experienced buyers will tell you that it is very important to buy from a solid company. Taking the time to evaluate companies to ensure that they are customer centric and are committed to great service for the entire lifetime of your business is a smart move which will alleviate headaches now and in the future.

Ask the Following Questions to Evaluate POS companies

1. How long have you been in business?

Software develops over time. So the younger the company, the greater potential for software bugs. With an older, more established company, you can rest assured that they have gone through the growing pains of new software and have a proven product.

2. What is your growth rate?

You want a company that is actively growing. The software industry is very competitive. Companies need to continually advance and improve their product offerings to keep their competitive edge. Not having significant growth indicates that the company may not be advancing their product as much as they should and could eventually be left behind. Stick with innovative companies that are leading the way.

3. How many customers do you have?

The number of customers is an indication of how successful the company is. If the company only has a handful of customers, it's either a) a new company, which you probably should avoid, or b) the company has a bad product or poor service resulting in high customer turnover and few new customers.

4. How do you sell your products?

If the company sells direct, the company has more control over price and support which means you get consistent service and prices. If the company uses a reseller channel be prepared for increased costs and inconsistent service. Selling through a middleman limits the company's ability to control service and price.

SPEND TIME EVALUATION SERVICE LEVELS

When you purchase POS software, you are entering into a long term relationship with a vendor. Let's face it, there's no such thing as fool-proof software. Understanding that you will be in continual contact with your chosen POS company for software updates, support, training, hardware and consulting should be an important consideration in your decision process. The company's level of support could be the difference between a good experience and a bad one. Take the time to inquire about support service levels. If the company you are talking to cannot provide you with specific support measures, they likely don't take support seriously.

Ask the Following Questions to Evaluate service levels

1. Do you offer 7 X 24 X 365 support?

You need support that works on your time. Why settle for anything less? Find a company that you know will be there for you when you need assistance.

2. How do you diagnose issues?

With web-based hosted solutions, support issues can be diagnosed immediately allowing the support team to begin to solve your problem immediately. With on-site, you have to wait for someone to come down to your location to first assess the problem and then take measures to fix it.

3. What is your average support wait time?

How long will the support phone ring before it's answered? Waiting anything more than 30 seconds is abysmal. A company that takes their time answering support calls, indicates that they don't care about their customers.

4. What is your 1st call pick up level?

Companies may say that they pick up their support phone in less than 30 seconds, but how long does it take to speak with an actual support person? Support lines can be answered by an automated system that places you in a call waiting pattern or they send you directly to voicemail. This can be very frustrating and time consuming when you want to speak to a 'real' person. By asking this question, you can find how often you will speak to a 'real' person when you call the first time. The higher the percentage, the greater the chance you will speak with someone sooner.

5. What is your system performance uptime?

Your POS system needs to work 99.9% of the time. A 98% uptime promise may sound good initially but this actually means that the system can be down for 29 minutes a day or 14 hours a month and they've still met their obligation!

LOOK FOR A POS SYSTEM THAT'S DESIGNED FOR YOUR SPECIFIC BUSINESS TYPE

Your business is unique. As such, you need software that meets your specific needs. A lot of POS companies claim their system works for every business type (retail, restaurant: fast food to fine dinning). As a business owner, you are well aware that you can't be all things to all people. Why settle for something generic when you can get software that was built with you in mind? Know what business issues you need to address with your POS in advance and then look for a POS that is catered to your needs. You will be much happier in the long run.

REQUEST A DEMO

You'd test drive a car before you buy it, wouldn't you? Requesting a demo from a salesperson is a great way to see how the software works and if it's a potential fit for your business. Beware of the salesperson who just launches into their product without first taking the time to understand your business needs. Use the salesperson as a resource. The best salespeople are there to answer any questions you may have and to help you find the best solution for you - even if it's not their product.

ASK SALESPEOPLE FOR QUOTES

By now, you should have a good understanding of what your needs are and you can begin asking for quotes. Please note that getting quotes from companies that you are interested in adds another dimension to the decision making process.

Some POS companies will include everything in their quotations while others will leave items out to make their prices seem more palatable - make sure you are comparing apples to apples. It's also very important to ask about costs that may arise during the life of your POS, such as maintenance, support, and upgrades.

You should also ask the sales rep to give you a proposal on all hardware, training, installation, support, upgrades and maintenance.

Ask salespeople the following questions

1. Is software support included for the full term?

We can't reiterate enough how important support is. The majority of providers will provide free support for the first year of the contract, leaving you with potentially expensive on-demand support for the remainder of your contract. Be sure to clarify the support service when you are evaluating companies.

2. Is hardware support included for the full term?

Some companies separate hardware and software support. Hardware support is just as important as software support. Be sure to find out if hardware support is 1) included and 2) covered for the full term of the contract.

3. Are there internal costs I should consider?

With many traditional POS systems a back-office computer is required to run your entire POS operation. It is your responsibility to maintain this computer. The cost of maintaining and running this operating system needs to be included when you are considering purchasing a traditional POS system. Conversely a web-based system would not have this additional cost.

4. How often do you provide updates?

You want the best software available. You can only stand to benefit from a company that is continually upgrading and improving their product.

5. Do you charge for updates?

Some companies charge extra for updates. As a user, you deserve to use the most updated and bug-free version of the software. Look for a company that includes upgrades for the full term of your contract.

CALL REFERENCES

Asking the salesperson for references gives you the opportunity to speak with someone that has used the product first hand. Taking the time to contact references and ask the right questions will help you select the right system and avoid many problems.

In addition to asking for references from businesses that are similar to your own business, ask for references from businesses that have successfully addressed issues that are similar to your own issues (opening a new restaurant, switching from a cash register, addressing a specific cost issue). By speaking with relevant references, you can find out if the POS company keeps their sales promise.

Ask References the Following Questions

1. Have you used other POS solutions?

The reason you should ask this question is to determine how valuable the reference will be. If the reference has only owned and operated one POS solution, they essentially have nothing to compare their experience to. They could be experiencing the worst service in the industry and not realize it. A reference that has used several POS solutions can provide a comparative context and therefore better information.

2. Why did you purchase this POS solution?

If you can take away one thing from reading these tips, it would be to find a POS system that is best suited for you. You can definitely learn 'what not to do' from someone that purchased solely on price, but there is more value in speaking with someone with similar business issues to you, that found a system that best fits their needs.

3. Did the POS live up to its promises?

You want to find a company that stands by the promises that they make.

4. What specifically do you like best about your POS?

Features are great, but most POS systems have relatively the same features. What really counts is good service and support which is difficult to find in this industry. If service is what the reference likes most about their POS system, chances are you've found a good company.

5. What specific issues have you had with your POS?

As mentioned earlier, software is not infallible. There will be issues. It's important to find out if the issues were only minor or if the software had major faults that prevented the user from performing fundamental tasks.

6. How has the POS company addressed these issues?

Responsiveness is key. A company that responds quickly to issues is an indication of great service. Find out how quickly the company responded to the issue and took the necessary actions to solve the problem.

7. Rank sales expectation setting out of 10.

In any sales situation, sometimes promises are made to get the prospect to purchase the product. Did the sales person oversell and leave the customer expecting more? You want to be able to trust the salesperson. Make sure the customer's expectations were met when they started using the end product.

8. Rank the training experience out of 10.

How easy was the product to learn? Did the training process run smoothly? If the reference rates the training experience highly, you can assume the training process will run seamlessly with little disruption for you as well.

9. Rank the service experience out of 10.

Service. Service. Service. Ask this question to get a quantitative score for highly important service levels.

10. Rank your likely of recommending out of 10.

If the reference would recommend this product it's a good indication that they are happy with the product and it is a good fit for their business.

11. If you were going to buy a new POS solution, what questions would you ask a new vendor that you did not ask last time?

This is a great opportunity to learn from someone that has already gone through the process you are currently undergoing. Established POS users have a different perspective and would probably approach things differently the second time around. Gaining insight from the reference will help you avoid the mistakes of a first time buyer.

PLAN FOR THE FUTURE

It's important to think about your future. You may have one location now, but if you ever plan or dream of having multiple locations you need to consider scalability. Ask the provider about the software's ability to incorporate additional locations. How are the different locations integrated? How are menu items and prices changed for all locations? What are the costs associated with having additional locations?

Purchasing a POS system can be a scary and frustrating process, but with the right amount of patience and perseverance you can find the POS that best fits your needs and puts you on the track to success.