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flipfundingstuff · 5 years ago

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Choosing the Best Point-of-Sale Software for Your Business

No matter what kind of small business you own, there’s likely going to be a point of sale: that magical moment when a customer gives you money in exchange for a product or service. And since this transfer is the lifeblood of your business, it makes sense that you’d want to make it as fast, easy, and secure as possible.

Many small business owners remember how difficult it was to use the payment systems of old. There were the notorious credit card imprinters, where you’d slide the handle, remove the carbon paper, and hope that all the relevant information was legible.

Go back in time a few years before that and cash registers weren’t even programmed with product prices. Employees entered calculations on the fly, and the results often weren’t pretty. Some mom-and-pop shops eschewed registers completely and simply kept cash in a box under the counter. Yes, these were rough-and-ready times.

This is where modern point-of-sale systems enter the picture. The size, format, and technology vary. But all of these systems—from a handheld credit card scanner at a farmers market to an integrated network of cash registers in a large department store—are designed to process a transaction electronically in the blink of an eye.

Point-of-sale systems aren’t merely doorways through which your products pass. They’re more like monitors, tracking how many items have been sold and how many remain in inventory. When a customer returns a product, the system makes a note of the transaction and dutifully reflects it in your inventory.

“The point-of-sale system serves as the central component for your business; it’s the hub where everything—like sales, inventory and customer management—merges,” says retail software expert Agnes Teh Stubbs. “As evident as the benefits of a POS system are, we found that 56% of single-store retailers are still not using one. Instead, we found, many are still using a combination of manual methods, cash registers, QuickBooks, and Excel for bookkeeping.”

If your small business falls into the non-adopter category, you should change the errors of your ways immediately. Even if you’re currently using a point-of-sale system, it’s worth evaluating the product’s benefits and considering an upgrade.

How to Choose a Great Point-of-Sale System

Your small business deserves the best, so you’ll need to sift through the various point-of-sale solutions to find your ideal match. This research takes time, but it always pays off in the end.

One of the best places to start is by leveraging your professional network. Talk to other business owners who run operations similar to yours. This is crucial because a point-of-sale system that works perfectly at a seaside gift shop won’t be an equally good fit if it were installed at your local Target.

As you talk to fellow business owners, ask for specific benefits they’ve received from their systems and what issues they’ve encountered. Keep a list of these observations, and you’ll probably start to see 2–3 options rise to the top of the pile.

You should also talk to your business mentor. While your mentor might not have direct experience with point-of-sale systems (especially if they retired before such technology took hold), they can help you consider other aspects of the transaction process that’ll guide your ultimate decision.

After you’ve received feedback from those closest to you, go online to check out professional reviews. Good reviewers will have a deeper understanding of the technological capabilities of point-of-sale systems, making them able to share insights that you and your colleagues might never notice. Just be sure only to read third-party reviews that have been written by people who didn’t receive any compensation in exchange for the review.

Whittling down your list to the best 2–3 options prepares you to make a final decision. Here are some of the key considerations in the process:

1. Will the system make my life easier?

This is one of the most important questions to ask. There are so many bells and whistles to compare between various systems, but what really matters is how well it will streamline your operations. When you have a great system in place, your entire team becomes more efficient.

“Effectiveness is the measure of accomplishing the most important objective for your most ultimately beneficial pursuit,” says Business Insider. “Or as Business Dictionary brilliantly puts it: ‘The degree to which objectives are achieved and the extent to which targeted problems are solved.’ As an entrepreneur, you’ve got to constantly reevaluate your efforts against your intermediate and future business objectives. You’ve got to have systems of introspection in place to ensure that you’re not becoming better or more efficient at tasks that have nothing to do with the long-term success of your business.”

Consider all the perks associated with various systems and hold them to this standard of efficiency. Doing so helps you to steer away from unnecessary features and find a system that will benefit your business on a regular basis.

2. Is the vendor trustworthy?

Drawing on your research, you’ll need to decide whether each vendor is reliable and what kind of reputation they’ve built in the industry. If you only stick to reading content from vendors’ websites, plan on seeing plenty of glowing reports. Dig deeper into the third-party reviews mentioned above, and you’ll begin to get a feel for a company’s legitimacy.

Consider as well whether the vendor is established enough to last throughout your adoption of their system. It takes substantial money to develop and market a point-of-sale system, so you want to choose a business that has enough money in the bank to survive the inevitable disasters that hit our nation from time to time. If they are able to withstand these negative events, you can trust that they’ll be around to continue supporting your business.

3. How secure will data be?

The fastest and most sleek technology on earth can still become a liability unless it also offers data protection. The data exchanged at a point of sale would be a goldmine for any criminal who steals it, so you need to know where it will be stored and who can access it.

“Few things are as ominous in today’s digital landscape as a data breach,” warns threat detection expert Isaac Kohen. “I know this firsthand through my work in the insider threat detection and monitoring space. Not only do data breaches come with an immense cost, estimated at close to $4 million, but shifting consumer sentiment and increased regulatory scrutiny help ensure that companies will be dealing with the consequences long after the initial expense is paid.”

By making sure your research includes a security element, you can quickly eliminate options that don’t prioritize this component.

4. How durable is the hardware?

There are certain business purchases that don’t carry much consequence: for example, you might decide to try a new air freshener in your restrooms. If the scents are pleasing and you get no customer complaints, you can feel confident in continuing to use these products. If you were to discover that the air fresheners are ineffective, you only lose the small amount of money spent on the products.

At the other end of the spectrum are investments such as point-of-sale systems. Not only will you need to purchase the system and train your team on how to use it, but you’ll probably need to acquire its required hardware. With so much money and effort going into its implementation, you need to be confident that the hardware will be rugged enough to endure daily use.

If a system is cloud-based, you’ll also need to determine how well it will work with your internet. For example, if the internet temporarily goes offline, would your system still be operational?

5. Is adequate training available?

All business teams feature varying levels of tech-savviness. Some of your younger employees might be avid gamers who build custom computers in their spare time, while other employees struggle to use the office copy machine.

“Companies that offer comprehensive training programs to their staff can enjoy increased productivity and efficiency, as well as higher profit margins as a result of having a better-trained workforce,” says Forbes. “But making sure the training you offer sinks in with your staff can be quite a challenge. Ineffective training leads to wasted time and resources, with unforeseen consequences in terms of costs and performance.”

It’s essential that your point-of-sale system is user-friendly and comes with robust training that helps everyone get on the same page. Among the many options available, ShopKeep and Sunrise offer some of the most accessible point-of-sale products available.

6. What kind of reporting does it offer?

Your system should provide clear sales reports whenever you need them. By capturing details such as product sold, hour of sale, total cost of product sold, total retail amount, net profit, profit percentage, and gross margin, your system will allow you to set realistic goals and better track their progress.

You’ll also need the system to help manage your inventory. When a product is sold, this should be reflected in your inventory. Any product returns would obviously move the item right back into the system. This helps you know when you need to order new products in order to keep your inventory at ideal levels. Your system might even be able to order inventory for you automatically when it hits a certain threshold.

The best systems also track employee performance. Each sales report should identify the employee who handled the transaction so you can use this information to identify top performers and create development plans for those who need extra help.

7. Will it improve your customer management?

Any time a customer makes a purchase from your business, the point-of-sale system should connect the transaction with that specific customer. If they’re existing customers, their purchases would be added to the purchase history in their profiles. New customers would get a new profile that includes their name, birthday, age, phone number, and email.

This information is critical to your business’s success. Purchase histories help you to meet the needs of your customer base better, while contact information allows you to send targeted messages to those who’d be most likely to re-engage with your business. The better your business communicates with its customers, the better it will fare in the sales department.

If your business offers a loyalty rewards program, your system should also be able to attach the corresponding points or rewards to each customer’s account following a purchase. This is a valuable way to build loyalty and expand your base.

8. What are the details of its hardware and software?

Most new point-of-sale systems include the hardware for the physical transaction and the software that takes care of all the details behind the scenes. The most affordable solutions use a model such as Square, which provides free hardware that you can simply plug into your tablet or smartphone. There are also no software charges—the only fees are related to the processing of a payment.

If you’re looking for a more robust option, consider Heartland Payment Systems. They provide top-notch hardware and software that allows you to accept any payment method your customers prefer securely.

Another consideration is the hardware and software’s flexibility. For starters, will the software integrate with your existing accounting software and play nice with your website? The best point-of-sale systems make it easy to merge your software for a streamlined experience.

Also, will you be able to choose add-ons later? This great feature allows you to purchase only what you need to get started and to upgrade your system as time goes on. Perhaps you’ll identify an area of transactions that could be improved if you purchase a certain add-on. Or you might have a record-breaking sales month and decide to reinvest some of the money into improving your system’s overall capabilities.

Finally, how easy will it be to add new employees to the system? This is particularly relevant for restaurants and other high-turnover businesses. If you have to jump through multiple hoops every time you want to add an employee, you’ll likely get sick of your system in a matter of months.

9. How much will the system cost?

The answer to this question varies widely based on your business’s unique circumstances. If you already have hardware in place, you might only need to purchase an inexpensive software solution. If you are starting from scratch, you’ll need to spend more on a full system with both hardware and software.

Be aware that some companies use hidden fees to charge you more. Common examples include fees for downloads, activation, refunds, or early termination. Ethical companies like Heartland Payment Systems are transparent with their fees—they even have a Merchant Bill of Rights that ensures you’ll receive fair processing practices.

If your budget is limited, you might want to consider renting hardware. This allows you to avoid a large up-front fee and grants you more flexibility when it comes to upgrading the system at a later date.

Another option is to purchase refurbished hardware. This can be risky, as warranties can be lower quality on used terminals. But if the price works and you trust the seller, it’s a worthwhile option.

Regardless of what kind of point-of-sale system you purchase, make sure that the vendor will provide the support you need. There will be inevitable hiccups as you train your team and integrate the system into your business. If the vendor stands behind their products and helps you to find resolutions, you’ve got a winner. If they’re prone to leaving your emails and calls unanswered, you’ll waste a lot of time and resources compensating for their inadequacies.

ShopKeep offers some of the best customer service in the industry with 24/7 support and representatives who are extremely knowledgeable. Sunrise and Square are also known to stand behind their systems and resolve any issues.

A point-of-sale system can make or break your business. When it works optimally, your sales increase and errors decline. You’ll be able to stay better connected to your customers and manage your inventory with ease.

Take your time with this decision—gather as many insights as you can. As mentioned earlier, your network and mentor will be invaluable in this process. By drawing upon their collective wisdom, you’ll be able to make a decision that works for you today and promotes serious business growth down the road.

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cathrynstreich · 5 years ago

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A Look Forward to 2020: Bundling Shows Life

[Note from the editor: We publish a Weekly Transmission for Geek Estate Mastermind members that consists of long-form articles covering the spectrum from shipping container co-living spaces to the battle for listing acquisition in the first iBuyer world war.

Below is a sample Transmission, a collection of 2020 predictions and trends sourced from members. —Drew Meyers]

A Look Forward to 2020: Bundling Shows Life

BY DREW MEYERS Originally Published: January 14th, 2020

We’ve spent the last decade unbundling. I see kernels in the reverse unfolding this year, leading to a massive re-bundling decade ahead.

Brokerages should continue iterating on delivering bite-sized segments of certainty wherever possible, but buyers and sellers ditching their existing relationships is a giant mountain to climb. It’s inevitable that iBuyers will begin to offer trade-up/in services and that brokerages will have to continually increase the breadth of services to win home buyer/seller favor. Nowhere will this bundling play out more than in the property management sector, as distribution reigns king for a wide range of home maintenance and personal finance offerings.

While certainty as a service will continue running rampant across both residential and commercial, those providing services–or at least curating/aggregating them–across the entire spectrum will win the day. And the decade.

Below is a range of trends of interest and predictions for 2020, sourced from the Geek Estate community…

TRENDS

CONTINUED CONVERGENCE OF REAL ESTATE AND PERSONAL FINANCE Ryan Coon // Co-founder & CEO, Avail

Real estate has always been intertwined with personal finance, but we’ll see the linkage between the two become even stronger in 2020.

Although most rent payments are still made offline, renters will increasingly expect faster and cheaper rent payments–and credit-boosting rent payments will become the norm. We’ll also see more adoption of innovative solutions that help renters along the path to homeownership, such as Rhove and Digs. As renters pay on-time, their credit scores will improve and they’ll also be rewarded with savings toward an eventual down payment. Innovative rent-to-own models such as Divvy Homes and Arrived will pick up steam, helping make homeownership a real possibility for those who don’t yet have their personal finances in a place to buy a home.

In the past, real estate was an investment available only for the wealthy. New models are changing this–and will lead to the adoption of real estate as a personal finance asset class for Main Street. While crowdfunding platforms, like Fundrise and Small Change, haven’t gotten as much attention as when they first launched, they continue to allow people to diversify their personal investments into real estate. Innovative real estate investment platforms like Roofstock/Roofstock One, DiversyFund, Compound, Landa, and Concreit are also making real estate wealth building more accessible.

BROKERAGE TIMES ARE A CHANGIN’ Pierre Calzadilla // VP Growth, Local Logic

Compass: A major chink in Compass’ “armor” will be exposed: Agents don’t stay. Expect exodus from top performers as all the acquisitions hit their one-year mark and people take their money and run. Compass will buy at least three more independent firms.

Side: With fresh cash, a hungry team, a strong value prop, and on track for $8 billion in annual sales in 2020, Side will go big in 2020 and make a name in the business as consumers aren’t even aware–because they don’t care. They just love that it all works and the agents are great. Industry will finally take notice and we’ll see Side everywhere by the end of 2020.

eXp/KW: Alongside another lawsuit and more vitriol, eXp will do something to breakout this year. Keller won’t expect it and Gary’s gonna be pissed he missed it.

Realogy: Realogy will spin off brands, like Corcoran and maybe even all of NRT, for a huge windfall. Imagine if the Louis Vuitton group bought Corcoran? Then Realogy will take its tech stack and spin that off as a new company, making its tech available to the entire industry. Realogy will hold on to the franchise business, simplify its revenue model, and assign losses to the right balance sheets.

THE CONSTRUCTION INDUSTRY CONTINUES TO CRACK UP Stephen Del Percio // VP & Assistant General Counsel, AECOM

In the aftermath of the 2016 election, construction industry firms were anxious to consolidate. The federal government was on the verge of passing generational infrastructure investment legislation, and firms perceived an opportunity to capture increased market share by collapsing design, construction, and operations and maintenance expertise under one roof.

But a funny thing happened on the way to the drafting room. An infrastructure bill never passed Go. Firms continued to bid large fixed-price contracts and risky public-private partnerships. In 2019, public companies like Fluor, Granite, and Tutor-Perini saw billions in market capitalization wiped away thanks to problem projects and larger quarterly losses. And investors pushed back on visions for fully integrated infrastructure firms that could design, build, finance, and operate major projects on their own.

In 2020, the construction industry will continue to segment, which I think will reverberate across the construction tech scene. Firms will get back to basics, whether it’s performing only professional design services, construction management, or whatever their core competency might be. This focus will, in turn, lead to increased scrutiny of overhead costs and process and workflow management–both critical areas where tech solutions can play pivotal roles for firms’ bottom lines.

Already, industry observers are suggesting that contech can be part of a solution for rising construction costs, labor shortages, and other inefficiencies that have always plagued the industry–2020 could be the year that it takes a permanent seat at the table.

THE ROLE OF THE AGENT WILL CHANGE DRASTICALLY Jon Boller // co-founder & CEO, BizFin

There’s a lot of talk from executives surrounding the antiquated nature of the real estate transaction and “how awful the experience of buying and selling homes is.” As a result, alternative, nontraditional real estate business models are emerging: iBuying, alternative financing companies, and discount brokerages are creating a unique marketplace where consumers are provided optionality. Gone are the days where consumers accept paying a set fee without exploring their options.

The modern day real estate agent will be an expert at walking consumers through the financial and long-term impact of going with an iBuyer and how to create wealth through homeownership. Consumers also may explore purchasing a home slightly outside of their budget via non-traditional financing options. The most consumer-centric agents are going to win and those willing to make data, analytics, and insights as the core of their businesses will increase their market share over the next 12-24 months. Agents will embrace technology to make their businesses more efficient and increase their revenues, leading to profit margin expansion.

FRAUD REARS ITS UGLY HEAD Nate Smoyer // Director of Marketing, Avail

The amount of money moving around and consumers’ unfamiliarity with real estate processes makes our industry a magnet for fraudsters.

This starts with the continued rise of wire fraud on purchase and sale transactions: One of the major challenges is that there are many gaps in the transaction that allow someone to influence or hack their way in to redirect down payments or entire purchase amounts to fraudsters’ accounts. This can be done with simple phishing emails or more sophisticated attacks leveraging malware. The President of Sun Title estimates, in total, that this is a $10 billion problem. Transactional management platforms, like Propy, stand a strong chance to shine by securing transactions using blockchain technology.

The second way consumers fall victim to wire fraud is through fake listings. Fraudsters convince prospective tenants to wire their rental deposit in order to get keys and then vanish. Methods deployed to combat fraudulent listings include advanced algorithms and SMS text confirmation. Unfortunately, fake listings still squeak through, victimizing tens of thousands annually. Companies like Zillow and Craigslist are taking the approach of charging for listings to thwart spam and fraud. I don’t think charging for listings is the best approach. There’s a lot to win here for whoever can best reduce listings fraud and establish trust with consumers.

PROPTECH VC GOES GLOBAL Ashkan Zandieh // Chief Intelligence Officer, CREtech

Mega rounds will be in vogue in 2020, as investors begin placing larger amounts of capital to work in established companies. In Latin America, Loft’s $175 M round to scale iBuying in Brazil was the first mega round of the year and also catapulted the young company to unicorn status.

In terms of geography, it’s no secret North America, especially the US, is the leader in proptech both in deal and investment volume. Overall, the industry closed out 2019 with eight consecutive billion-dollar funding months. However, the global landscape of proptech is changing, and the dominance the US once had will start to be challenged. Investment activity has begun to pick up in Asia over the past year. The positive venture capital market and appetite for mega rounds will begin to rival that of the US as China’s proptech ecosystem continues to grow. The European market has positioned itself to make up ground in 2020 in terms of deal volume. Markets like London, which has long been a fintech power, will look to back some of its homegrown companies in 2020.

FUNDAMENTALS PREVAIL & MARKETING TAKES CENTER STAGE Christian Sterner // Co-founder & CEO, WellcomeMat

Even with the global trend of historically low and negative interest rates, broken models and insolvent businesses (able to hide behind cheap capital for too long) will begin defaulting on debt and disappointing investors with increasing vigor. As such, we will see an increased focus on gross profit for technology companies and decreased investment, which will shine a light on and benefit companies and management teams running companies with a long-term outlook. We will watch fundamentals prevail again in 2020.

The hottest markets are turning sour in the US. As that happens, agents, teams, and brokerages will spend what it takes to stand out amongst growing inventory. Companies focused on providing superior marketing will see a very strong growth period going forward.

PREDICTIONS

ZILLOW GROUP STOCK UP AT LEAST 50% Terry Dwyer

Zillow’s Q1 and Q2 2020 financial numbers are going to surprise a lot of people. Based on its recent stock price recovery almost to its pre-iBuyer price, a lot of people have already determined that Zillow’s pivot to the iBuyer business was the right thing to do.

Two sets of numbers do not necessarily make a trend, but it’s hard to ignore Zillow’s Q2 and Q3 2019 numbers for both its overall business and its Homes (i.e., iBuyer) segment. Its iBuyer costs in those two quarters covering sales & marketing, technology & development, and G&A all indicate that they should continue to trend down on a percentage basis relative to the overall Homes revenue for the next two or three quarters.

The big number in question, of course, is the “cost of revenue” line item or the actual costs directly related to the acquisition, maintenance, and sale of homes for a given quarter. If past performance in other areas of its business is any indication, executives are quick studies and have no problem applying lessons learned from past mistakes. The iBuying business itself is not a high margin business, but then again, neither is the traditional real estate business regardless of how much technology one throws at it. It’s the cross-selling opportunities that will make bigger profits for this initiative down the road. Couple that with Zillow’s long-expected shift from upfront lead-gen fees to more profitable back-end referral fees and the future looks bright for the team in Seattle.

ZILLOW ACQUIRES OFFERPAD Drew Meyers // founder, Geek Estate

I predicted an Opendoor and Offerpad merger last year, but it wasn’t to be. With both a history of very large and bold acquisitions (ie. Trulia and Dotloop) and needing to fend off Opendoor from cementing itself as the category leader, Zillow Group will acquire the next best thing to sweeping Opendoor under its umbrella: Offerpad. Bringing the #3 player in-house would add obvious scale to its Homes business as well as a partnership with Keller Williams’ 100k+ agents.

IBUYER FAILURE Jon Boller // co-founder & CEO, BizFin

A handful of iBuyers will go out of business due to operational inefficiencies and challenges with margins and execution. People are willing to pay for convenience on tasks like cab rides, food delivery, etc. However, they are less likely to give up thousands of dollars in home equity as this often serves as their retirement savings accounts. iBuyers have slim margins to run on, have to be perfect at pricing homes, and then have to be able to turn around the selling of the homes quickly to avoid carrying costs at scale. The operational challenges of a high touchpoint, people-intensive, and low margin initiative will force investors to challenge and question investing in these companies by the end of the year.

PROPERTY MANAGEMENT SOFTWARE TESTS DIRECT SALES INTEGRATION Drew Meyers // founder, Geek Estate

Why can’t a tenant easily buy a property from their landlord, without an agent? 2020 will mark the year property management software pilots facilitating the paperwork and legal work for tenants to make the jump from renter to owner.

Closing

That’s a wrap! Agree or disagree? Are there trends missing that you’re bullish on? What do you see coming down the pipe in the next decade that will have its seeds planted this year?

[Graphic via a16z]

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clarencevancleave · 5 years ago