Owning a restaurant is a dream come true for many passionate foodies. But let's be honest — one of the last things you're thinking about is a POS system. As a result, many restaurant owners settle with the first one they see without conducting a proper cost analysis or feature comparison.
A reliable POS system is like a loyal sous chef who can handle all the tedious tasks and lets you focus on what you do best — creating tasty dishes and delivering an exceptional hospitality experience.
Yet, everything comes at a price. In this article, we'll explore the financial intricacies and pricing models of POS systems for restaurants and take a deep dive into the costs that businesses need to consider.
Keep reading to discover everything you need to know.
Compare POS System Features
Before we can break down the cost of restaurant POS systems, let’s first talk about features. If your POS system is nothing more than a glorified cash register, it’s probably not going to be the best long-term solution.
Point-of-sale systems tailored for restaurants offer a plethora of features designed to streamline operations and make life easier for both customers and restaurant owners.
Online Ordering
Offering online ordering is essential for most restaurants. If your restaurant is already partnering with online ordering platforms like DoorDash or Uber Eats, then you should choose a POS system that integrates with them. However, if you want to offer takeout or delivery without going through a middleman, then your POS of choice should come with a built-in online ordering system.
Mobile Ordering & Payments
In modern restaurants, mobile POS system hardware is a must. Any POS system worth its salt will offer solutions to keep your operations efficient. Taking orders and payments right from the table helps turn tables faster while giving your customers a better experience.
Reservation & Waitlist Management
The reservation and waitlist management feature lets you view and manage all your reservations and walk-in guests in one place. Table-ready notifications come in handy when notifying your guests their table is available and they can be seated.
Loyalty & Marketing
Turn your new customers into loyal, repeat customers. This is where built-in features become useful.
With a robust customer database integrated into the POS system, your restaurant can send targeted email campaigns out to diners that encourage them to come back. Plus, a loyalty program can turn first-time guests into regulars, rewarding them with redeemable points every time they come back.
By using a mix of advanced marketing tools and tailored loyalty programs, businesses can win new customers and keep existing ones.
Web Presence Management
In today’s digital era, a compelling online presence is crucial for the success of any restaurant seeking to connect with customers and stay competitive.
A state-of-the-art POS system with an AI-powered website builder dramatically shifts the paradigm for restaurateurs. It streamlines website creation and syncs with the point-of-sale to reflect real-time updates, while also facilitating direct online ordering. Coupled with essential back-office tools for managing reviews and social media interactions, restaurants are empowered to curate a responsive and engaging digital identity.
Inventory Management
Inventory management features are meticulously designed to alleviate the traditional headaches associated with stock control. They offer tools to track stock levels and ingredient usage in real-time, ensuring that a restaurant's kitchen and bar are never caught off guard by items suddenly 86’d or overstock situations.
Additionally, most POS systems allow you to set reorder points for each product or ingredient, automating the ordering process to prevent shortages.
Reporting & Analytics
Your business should be making decisions based on data — and your POS system has all the data you need. With advanced reporting and analytics tools, you can gain valuable insights into sales trends, peak hours, and menu performance.
Labor Management
Labor management functionalities can help you run your business smoothly and efficiently. You can easily manage your workforce and ensure that every shift runs like clockwork, allowing you to focus on taking care of customer service and growth strategies.
Third-Party Integrations
POS systems shouldn’t just work well on their own; they should also seamlessly integrate with your favorite business tools for unparalleled efficiency.
Third-party POS integrations also offer the flexibility to add or change functionalities as needed without overhauling the entire point-of-sale system. This scalability ensures that the technological infrastructure of a restaurant can grow alongside your business, adapting to new challenges and opportunities as they arise.
Additional Considerations
Cutting-edge POS systems are designed to be user-friendly and customizable so restaurants can create exceptional dining experiences while optimizing efficiency and profitability.
Beyond the variety of features offered, there's a range of POS hardware options to consider, such as desktop POS systems, handheld devices, phones, tablets, and self-service kiosks. Each type has its own advantages and use cases.
For instance, handheld POS systems offer mobility and flexibility for tableside ordering and payment processing, while self-service kiosks can enhance the customer experience by allowing them to place orders and pay at their convenience.
Moreover, there are specialized POS systems like open-source, multichannel, and omnichannel, each catering to specific business needs and preferences.
Ultimately, the choice between these POS system types depends on factors such as business size, budget, operational needs, and long-term growth strategies. By carefully evaluating these considerations, restaurant owners can select the POS solution that best aligns with their specific requirements and sets them up for success in the competitive restaurant industry.
Breakdown: How Much Does a Restaurant POS System Cost?
The cost of a restaurant POS system can vary depending on factors ranging from software and hardware to setup, support, and other fees specific to point of sale systems.
Below are some of the costs you’ll want to take into consideration.
Software Costs
Entry-level POS software packages can start as low as $0 per month, as some providers offer basic free-of-charge or affordable plans with essential features suitable for small businesses.
It's worth noting that basic plans typically come with limited functionalities, which may include pre-defined reports, a restricted choice of hardware, fewer customization options, and time-limited customer support. Therefore, before you go ahead and choose a basic plan because it’s the cheapest, it's important to know what is included and what isn't. This way, you can ensure that it's a good fit for you and that you won't be disappointed later on.
It will be a good match for a small, independently-owned restaurant with a moderate volume of customers and a relatively straightforward menu. It could also be a good fit for a small coffee shop, food truck, or any other business that doesn't require anything too complex and prefers a POS system that is easy to use, affordable, and straightforward.
More comprehensive software with advanced functionalities may range from $29.99 to $200 per month. These usually cater to medium-sized restaurants and offer enhanced capabilities.
High-end solutions tailored for large-scale operations or enterprise-level businesses can easily exceed $200 per month per workstation. Such systems offer extensive features, including multi-location management, advanced analytics, loyalty programs, and integrations with other business software.
Hardware Costs
POS hardware cost for a basic setup can range from $0 to over $1,000 per workstation. This usually includes essential components such as a POS countertop terminal, cash drawer, and receipt printer.
However, a basic terminal setup does not always suffice for your business needs. If so, the cost will increase when more sophisticated configurations with additional peripherals like kitchen display systems, customer-facing displays, or handheld devices are required.
A smart and practical way to avoid the burden of high upfront payments that come along with purchasing hardware is to look for providers that bundle hardware into their monthly cost like SkyTab.
This way, you can confidently select a POS hardware solution that perfectly meets your business needs and budget requirements without worrying about the initial cost. This approach is more feasible and cost-effective, enabling you to start your business without breaking the bank.
Setup Costs
While some POS providers include setup assistance as part of their standard pricing plans, others may offer it only as a remote option or add-on service for an additional fee.
This fee may vary depending on factors such as the size of the business, the number of POS terminals being installed, and any specific customization or integration requirements. In some cases, installation fees can cost up to $1,000 a day plus possible extra costs for non-standard hours or travel costs.
Therefore, businesses must pay attention to what's included in the offer to avoid any unforeseen installation costs.
Support Costs
The same rule applies to post-installation support expenses. Ongoing support and maintenance are typically included in the subscription fees for POS software. However, some providers may offer different support tiers based on the level of assistance needed, including paid premium support for more demanding clients.
Payment Processing Fees
In addition to the costs listed above, it's essential to consider the transaction fees associated with processing payments through the POS system.
They typically range from 2%+ 10¢ to 3.5% + 15¢ per transaction. While these fees can be a bit of a nuisance, they cover the cost of processing credit cards payments and ensure that you can offer a reliable and secure payment option to your customers.
The exact fee amount will depend on various factors, including the type of payment card being processed, the volume of transactions, and your average ticket amount just to name a few.
Some payment providers will go to great lengths to adjust pricing options and POS configurations to help restaurant owners cover rising expenses. For example, you can offer a discount for cash payments or to add a supplemental fee on transactions paid with a credit card, which is becoming more common across a variety of businesses.
It's worth keeping these fees in mind when setting prices for your products or services, as they can have a significant impact on your bottom line.
PCI Compliance Fees
PCI compliance is a requirement set by payment card networks like Visa, Mastercard, and American Express. Failure to maintain it can result in fines, penalties, or the inability to process card transactions.
Businesses accepting card payments must prioritize obtaining annual PCI certification and self-assessment to protect customers and their own interests. As a result, they must pay a yearly fee to maintain the Payment Card Industry Data Security Standards (PCI-DSS), either to an external qualified PCI compliance provider or payment partner they work with — the latter option being the most popular and cost-effective.
Since there is no standard price range for PCI compliance, restaurateurs should be prepared for costs ranging from a few hundred to tens of thousands of dollars, depending on the size of their business, the technology used, and other relevant factors.
The good news is that smaller restaurants not obliged to conduct 3rd-party validation can save on PCI costs by self-validating with a small fee for processing the PCI Self-Assessment Questionnaire.
PCI-compliance costs can be burdensome. However, failing to comply with regulations can be much more costly. It can result in significant consequences, including harm to your brand, data breaches, penalties, expenses related to card replacement, and the need for forensic audits, among other potential risks.
Third-Party Integration Fees
Costs for integrating additional features or third-party applications vary depending on the provider and the complexity of the integration. Prices can range from a one-time setup fee to ongoing subscription fees for premium POS integrations.
While overall costs can vary significantly based on factors like features, size, and customization, restaurant owners must carefully evaluate their requirements and budget constraints to find a provider that offers a comprehensive solution at a reasonable price.
Costs-Optimization Tips
Without a doubt, managing the costs associated with a POS system can be a real challenge. However, there are ways to optimize your investment and save money in the long run.
Here's what you can do to keep your expenses under control:
- Compare pricing plans and subscription models across different providers to find the most cost-effective option that aligns with your budget and operational needs.
- Consider potential additional expenses such as upgrades, integrations, and training upfront to avoid unexpected costs down the line.
- Check the available hardware warranty to have future hardware costs under control. Ensure you'll be offered a lifetime warranty and free swaps should you need to replace a bad device.
- Clarify support and maintenance policies with the POS provider to ensure transparency and prevent any unforeseen expenses related to technical assistance or system upkeep.
- Identify opportunities for efficiency improvements and cost savings within the POS system itself to lead to long-term financial benefits.
- Stay informed about updates and new features offered by the POS provider to maximize the system's capabilities and ensure continued value for the investment.
By following these tips, you can confidently select a POS system that not only meets your immediate needs but also aligns with your long-term business objectives, setting the foundation for success in the competitive restaurant industry.
Craft Your Restaurant's Success Story
Choosing the right POS system is a decision that can make or break your restaurant's success. You don't want to end up with a system that's as confusing as a legal document or as costly as a private jet.
That's why taking your time, evaluating your needs, comparing options, and considering factors like the cost of a restaurant POS system, features, and support are important. So, why settle for less when you can have the best? Invest in an affordable POS system like SkyTab without compromising on features and functionality, and watch your restaurant thrive like never before!
