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Making Beans Count:
Choosing the Right POS System
By David J. Morris & Lon LaFlamme - the Brand Coaches

What kind of passion can you conjure up for a Point of Sale (POS) System? No, we aren’t talking about gorgeous four-color seasonal drink posters and other creative signage enhancing your brand. We are referring to a specially configured computer that can utilize a point-of-sale system, which captures, maintains and updates enormous amounts of needed information that a cash register can never do.

The specialty coffee industry is maturing to the point that only the strong and smart will survive and thrive. The art of selling coffee has merged with the need to capitalize on the latest technology to make beans count.

Your challenge is to find the right POS system for your budget and everyday needs. Many systems provide a ton of information that is of little value to financial and customer service management. The prices and features of POS systems vary widely. Whether you are preparing to open your first retail coffee business, or are looking to expand to multiple locations, choosing the right POS is central to your ability to grow a profitable business.

Coffee Shop Manager’s (www.CoffeeShopManager.com) co-founder, Lee Alexander provides the following product benefits:

Improve Customer Service
What is seldom considered is the value a smart POS system plays in directly impacting the customer. You can provide improved customer service by increasing order accuracy by reducing drink and food mistakes and improving speed of service by capturing full order details on initial entry. Additionally, you can increase customer service by issuing your own pre-paid card and offering an alternative cashless payment solution. While on the subject of pre-paid cards, don’t make the mistake of printing on the card “Gift Card” or “Loyalty Card.” Using the card as a gift is only one use for the prepaid card. The loyalty angle is what you hope to get from the customer using the pre paid card. Call it what it is, a “Cash Card.”

Why Use a POS System?
There is a lot of confusion concerning how and why to use today’s POS systems. However, there are many important benefits to using today’s POS systems. Firstly, as you add locations, you can remotely monitor and manage your POS, consolidating data across multiple registers and locations. Once you learn the right information to track, you can quickly and efficiently analyze data through detailed reports, then react to numerous business trends and issues. Additionally, you can implement a cash card system; a central brand-building tool required for even single location businesses to be taken seriously by potential customers. The days of the paper-free drink punch cards are over. POS systems also help control cost of goods with theft prevention register controls and have the ability to track and manage inventory more efficiently. Lastly, investing in today’s POS system will help you eliminate or reduce manual entry of daily sales into an accounting program by exporting sales information electronically.

POS System Selection Criteria
There are a few key questions to ask yourself before choosing you POS system. As your business changes, is your POS system adaptable? Is your system scalable to multiple registers and sites? You may be happy with one location today, but why not make your initial or new POS system investment based on its ability to grow with potentially more ambitious growth goals? How maintainable is your POS? Is it easy to back up the data? Does your POS integrate well with other applications? What are your physical and space considerations? Do you want to access the Internet? Is your system safe from hackers? Does your system administrator (POS company) have a solid coffee industry reputation? In coffee shops, restaurant-style POS is used.

Tips For Choosing the Right POS Software
The following five tips are provided by Jeff Haefner, Point of Sale Software Buyer’s Guide (www.possoftwareguide.com.)

  • Tip #1: Choose Software First Your POS software will have hardware and operating system requirements. Most software will require a certain version of Windows, UNIX, Linux or MAC. In addition, each program may only function with certain types of printers, scanners, cash drawers and card readers. If you install your computer system first, you will limit your POS software choices.

  • Tip #2: Buy From One Source If you buy hardware and software from different companies, you could run into some instant frustration. You have just set yourself up for the “blame game” between both providers. You might pay a little more overall, but when the inevitable problems arise you will be glad you have only one call to make. You can also take advantage of one company pre-configuring the computer system to save you time and frustration.

  • Tip #3: Look for Industry Specific Software If you learn one thing from this tip list, walk away with the understanding that it is critical to source software that is specifically tailored to the coffee industry, not just the restaurant business. Yes, other industry software can work, but you will miss out on a lot of time and profit generating features specific to the specialty coffee retailer.

  • Tip #4: Buy a Brand Name Many computers will have a one to three-year warranty, and possibly on-site service. Your POS hardware (receipt printers, cash drawers, etc) typically has a one-year warranty. To avoid issues with your warranty, it is best to buy a well-known and respected brand that is recognized in the coffee industry for having “got the bugs out” before you buy the software.

  • Tip #5: Don’t Forget the Miscellaneous Items Here’s a checklist of items that you’ll need to consider:
    • Training fees
    • Support fees
    • Software update/maintenance fees
    • Data conversion fees
    • Receipt printers
    • Bar code scanners
    • Reports printers
    • Cash drawers
    • Surge protectors
    • Battery backups (UPS)
    • Tape backup system
    • Cables for printers, computers and your network
    • Network hubs
    • Internet access routers for shared Internet access
    • Paper-thermal paper, pre-printed invoices, plain paper, etc.
Major POS Specialty Coffee Players
The major players you should compare for features and prices are Micros, Radiant/Aloha, Selby Soft, A.R.T., and Coffee Shop Manager. Micros and Aloha are at the top of the game, the perfect choice for a specialty coffee business owner with aggressive multiple location ambitions. The costs are generally out of reach for many single to three-location coffee retailers. On average, a server/client-based system from Micros or Radiant’s Aloha POS system range from $8,000 to $12,000, depending on the final equipment configurations, modules and programming needs.

Selby Soft and Coffee Shop Manager provide a middle-of-the-road approach to POS solutions in the $5,000 to $6,000 range, making the purchase of an acceptable POS system possible for many coffee business owners.

There are a myriad of other POS solutions and packages priced at a lower price point (around $3,000). However, these options tend to use older, generic hardware and generic software with the option to purchase upgrades or incremental add-ons. With bargain basement POS options, always take a buyer beware approach and make sure the advertised price includes all of the equipment, functionality, services and support you want. In most cases, after all the “optional” equipment is added, these “affordable” POS systems end up costing $2,000 to $3,000 more than advertised.

Applications Differences
All of these major players may have many years of experience in the POS industry, but this experience is drawn upon the restaurant (table service/quick service) or retail establishments, according to Coffee Shop Manager’s Lee Alexander. He added that Coffee Shop Manager is focused solely on the coffee industry from its inception, and maintains that commitment today.

Alexander’s case for Coffee Shop Manager is that many other POS providers have modified table service/quick service applications, or attempt to modify retail-specific applications to coffee houses. While many of the features are shared across the foodservice industry, Alexander claims, “They pale in comparison to having a system that was designed specifically for the coffee environment.”

Toby Porter, owner of the two-location D. Java Coffee Company, echoes Alexander’s praise for Coffee Shop Manager. “I have been with Coffee Shop Manager since 2003,” Porter said. “I like the functionality and advances in the past two years over comparably priced POS systems.” Other product benefits Porter listed included Coffee Shop Manager’s headquarters modules, allowing him to grow, adding more locations with the same system, while analyzing information by the hour, month and annually. “When you are a small business, you really focus on your operation hourly. I am also able to buy only those packages I really need, making it affordable for a small business like mine,” said Porter.

Got huge regional, then national growth plans like Greenville, South Carolina drive-thru chain, Liquid Highway? The right choice for you could be Radient’s Aloha POS system. Liquid Highway Chief Operating Officer, Dwain Waller is a strong believer in Aloha being the perfect answer for the drive-thru chain’s vision of quickly growing to over 100 locations. “I really researched what is out there at this moment in time. Aloha allows me to customize anything I want, and at any size, without limitations,” Waller said. He underscored how impressed he is with Aloha’s gift card and e-frequency loyalty program, allowing him up to 10 ways he can reward loyal customers for repeat purchases.

The biggest attraction Aloha had to Waller was the system’s ability to feed into the same database, or 100 locations and more. “Aloha has a service that allows you to upload all of your 100 stores with website access to make a price or menu item change, that instantly adjusts to all stores in the system, versus entering each store separately,” Waller said. He added that his selection was not only based on his drive-thru chain’s needs today, but what built-in and available features best fit Liquid Highways ambitious plans for tomorrow.

To help you appreciate how difficult and important a decision that POS is, Forza Coffee founder, Brad Carpenter is convinced he has the perfect fit with Advanced Restaurant Technology (A.R.T.). His key reasons for switching to A.R. T. is custom flexibility, speed, consistency and reliability. Each terminal costs about $8,000. He points out that rather than having to buy a non-changeable package addition to “customize” to his needs, with A.R.T., Forza can tweak the program features to meet the exact needs of his quality coffee house franchise chain, which continues to grow at a lightening pace. “A.R.T. allows me to customize not only the screens for the baristas, but works with me to customize the back end reports in the manner I want,” Carpenter said.

While Carpenter has been frustrated by the slow speed of his former POS system, he has found that the speed of A.R. T. is a real plus. “I can pull up daily sales reports and analyze item percentage sales instantly,” said Carpenter. He added that with his PC, he could view his reports from home, or while on vacation. “I have a system that is networked now between 20 stores, with 60 more close behind. The A.R.T. program they built with me allows the user to quickly see ‘red flags’ that would alert any suspicious activity,” Carpenter said. He stressed that when selecting a POS system, it is important to talk to at least three of the POS company’s customers, but not customers that they recommend you call as references. “What happens when you break down? Believe me, with many of the POS systems out there, you are faced with constant breakdown issues,” Carpenter warned. He said that with A.R.T.’s Colorado-based server system, even if his machines blew up and he lost all of his vital information, every bit of information on Forza is safely protected. “There are solid reasons why so many large companies use A.R.T.,”said Carpenter. “I couldn’t begin to tell you how happy I have been with every aspect of their software and service support.”

Confused with conflicting “best choice” testimonials? Welcome to the adventure in sourcing a POS system that is tailor made for your budget and vision of the future.

Tea & Coffee columnists Lon and David provide brand and profit building consultation to a number of coffee, retail and b2b businesses across North America. For more information on the Brand Coaches go to: www.thebrandcoaches.com.

Tea & Coffee - October, 2007

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