POS Basics For Small Retail Businesses

Single-owner businesses, “mom & pop” stores – whatever you choose to call them – are still the backbone of the American economy. Roughly 41% of the U.S. economy is held up by small businesses. Retail stores are over half of that group.

There are many concerns for the owner of a small retail business. He must manage inventory, cash flow, and hiring without any guidance from corporate offices. The good news here is that much of the business management and inventory demands can be managed by the right POS, or point of sale. Your POS can even gather data from your customers so that you can selectively market to their needs and desires. Here are some of the basic of a good POS for your store.

The Cash Register

There is a difference between an ECR (electronic cash register) and a POS (point of sale) system. Most small, single-owner businesses use the ECR, thinking that a POS will be too expensive. This means everything must be done manually, from inventory to item numbers at the POS.

POS systems, though, are computers. The register is your POS, and performs multiple functions. You just need to select a register that will be right for your store.

Your cash register will have a cash drawer and a printer for receipts. It should also have a credit card reader. In addition, consider a register with a scanner for bar codes. A good register that will do most of these things will cost below $1500.

Manufacturers of POS

There are many manufacturers of point of sale systems. The good news is that competition is tough, which means better prices for you, the retailer. You can find more manufacturers at Datamax System Solutions, but here are some of the top names:

  • IBM
  • NCR
  • Epson
  • Motorola/Symbol
  • Verifone
  • Honeywell
  • Datalogic

Elements of a POS

Each industry has its own needs in a POS system. Each manufacturer has its own applications. But, the purpose of the applications is the same. A retail point of sale will consist of a single terminal in small businesses, or multiple terminals in medium businesses. Multiple terminals will require a server that can synchronize the data from all of the registers. The following hardware is part of the POS terminal:

  • CPU unit
  • LCD screen
  • Receipt printer
  • Keyboard, if the LCD screen is not touch sensitive

Choose the Best POS System for Your Store

Expandable: Your POS may simply be a PC with a cash drawer and printer. However, you will want to add on as your business grows. Look for add-ons that are user friendly or have a good support team so that you don’t have to pay someone to hook everything up. That can save you a lot of money. In addition, these expansions reduce the chance of error. Some of the items you will probably want to add include:

  • bar code scanner
  • credit card reader
  • inventory tag printer
  • pole display
  • PIN debit pad

Inventory: Choose a POS system so that it fits your inventory needs. This will save you money in the long run through reduced man-hours, alone.  A good system will:

  • give you access to your updated inventory
  • alert you to low stock items
  • be easy to use when adding new inventory
  • automatically keep track of back-orders
  • generate purchase orders

Functional: Another consideration is whether or not your POS is easy for your employees to use. If your store fills complicated orders or a wide array of inventory, you will need a POS that can keep up with it. But, it should be simple enough to make worthwhile training part-time help.

Handheld POS

If you participate in trade shows, then handheld POS systems are a must. They are also very useful for sidewalk sales, and sales on the shop floor during the busy season. TopTenReviews ranked these mobile point of sale systems as some of the best:

  • Vend
  • ShopKeep
  • Revel Systems
  • LightSpeed
  • Square Up


We’ll look at inventory control in another article. But here, the POS is crucial to keeping count of your inventory. The SKUs are recorded as they are processed through your register, and subtracted from your inventory. You can even select software that alerts you to the need to re-order certain items or certain sizes of items. The system will even tell you what you paid last time you ordered the item. This gives you a bargaining chip with suppliers.

Customer Data

An integrated POS will also collect data on your customers. It can alert you to a customer’s purchase history. You can market directly to your regular customers, pointing out that your inventory now has exactly what they are looking for. Or, you can use the system to see if you have a particular item in stock.

Customer Loyalty

This might be part of the customer data section, except that it is extremely important. Your POS can keep up with customer loyalty programs, which are crucial to the success of small businesses. Rewarding loyal customers keeps the coming back to your store.

Online Shopping

You may find that with the right POS system, you can expand your online shopping. Ecommerce is a vital link to new customers. By installing a POS that integrates with your website, you can increase sales and attract new customers.


The right POS equipment will pay for itself in the first year. A private business owner will see a 10% savings in the first year, which quickly pays for a $1500 register. The savings come from less time inventorying, less time ordering, and less time shopping for vendors for the best prices. And, that doesn’t even count the increase in sales you will have from targeted marketing and happy customers.