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Bean CountersToday's POS systems simplify not only order-taking, but also day-to-day shop management.By Karen L. Wagner A
sk any coffeehouse owner what he or she loves most about owning
a coffeehouse and you probably won't hear anything about counting
how many 16-oz. cups are left, scheduling employee shifts or computing
hourly sales. Yet, along with creating specialty drinks and interacting
with customers, office work and accounting tasks are all part of the
job when it comes to running a retail store. The Mocha Package from Coffee Shop Manager. The countertop configuration is ideal for tight spaces such as found in kiosk or drive-through stores. Photo taken at the Sage Café, Bend, Ore. Fortunately, today's sophisticated point-of-sale systems make doing the "paperwork" a lot easier and a lot less time consuming. The systems include computer software that enables tasks that once took several hours to be completed with the punch of a few buttons, allowing retailers more time for the creative parts of their operations. The user-friendly software also lessens the chance for mistakes with orders, which protects profit margins. Many POS systems also include features for gift and loyalty cards, tools that can make it easier for a retailer to gain the edge in an increasingly competitive specialty market. What's more, a few POS systems were developed specifically for coffeehouses, so getting the most for your money, which can add up to several thousand dollars, may be easier than retailers might think. Everything, except windows From tracking inventory to tracking which clerk is ringing up what sales, POS systems can be used for a variety of tasks that can streamline the management process and improve accuracy. The computers can easily spit out weekly, daily or even hourly sales figures, what drinks are selling well and show which clerks are ringing up the most sales. If a retailer thinks he's running low on grande cups, he can go into the storeroom to check, but what if that storeroom is across town at another location? With the press of a few keys, the POS system provides that kind of information. "There are so many different aspects they can assist with," says Lee Alexander, sales and marketing director for POS Core Technologies, Inc., Redmond, Wash., developers of Coffee Shop Manager, a POS system designed specifically for coffee retailers. Installed in about 500 coffeehouses across the country, Coffee Shop Manager includes such features as inventory management, employee time clocks and menu planning. The software also integrates with Quickbooks Pro, accounting software commonly used by many small businesses, Alexander says. With the stroke of a few keys, the system will send accounting information to the back office. "That's a huge advantage," Alexander says.
Another advantage that systems like Coffee Shop Manager offer is customized drink ordering. Let's face it, while customers like ordering their mochas with whole rather than skim milk, extra whipped cream, a double shot of espresso and a shot of hazelnut syrup, that variety makes ringing up drinks a lot more complicated. The result is that the exact same drink can be rung at several different prices depending on who's doing the ringing. Revenue can be easily lost when the clerk forgets to add the extra charge for whipped cream or a flavored syrup, for example. With many POS systems, the clerk can punch in exactly what the customer ordered and then print out a ticket and read it back to the customer to confirm accuracy, or simply give it to the barista to make the drink. Mistakes in ordering can be noticed before the drink is made, which reduces waste. Easy to operate touchscreen terminals provide almost infinite ways to create customized menus. Using the RedEye Point of Sale Software Suite, for example, an order-taker will ring up a grande hazelnut latte with three extra sugars by going through several links, beginning with a new order key, selecting hot espresso drinks, next going to the flavored latte menu, and then perhaps punching in the size. The system also has such specialized functions as a modifier screen so special instructions, such as those three sugars, can be easily added, explains Barb Hibbert, vice president of sales for RedEye Enterprises, Peoria, Ill., developers of the RedEye POS system. "It's definitely very customizable," says Hibbert. Introduced to the market earlier this year, the software was developed specifically for Hibbert's drive-through business, Joe's Java and Ice Cream in Peoria, when the technology she had been using proved insufficient and Hibbert sought something better. "It needed to be fast, primarily" says Hibbert, whose business partner, Brian Patterson, created the software. Hibbert, who has been using the software for about a year, says many of the system's functions, such as the ability to produce hourly sales reports, are a great advantage. "This software is absolutely invaluable to keep (the business) running smoothly," she adds. Other features offered by some POS systems may actually help retailers increase sales. Loyalty and gift cards have become strategic tools for promoting coffeehouses and retaining customers, and many POS systems include software that makes managing such programs easier. Stored value cards, as they are known, can be used three ways with Coffee Shop Manager, for example--as prepaid accounts, so frequent customers can pay a desired amount upfront and then use the card instead of cash; as gift cards that can be stored with a desired value; and for frequent buyer tracking, so customers that have bought nine beverages will get the 10th free, for instance. With each use, the computer reduces the value stored on the card. Not only do stored value cards speed up service because the transaction doesn't include cash or a credit card, but since the computer software takes care of the entire transaction, there's also no need for a third-party authorization or fee, Alexander explains. "It's a great system," says Alexander. "And, it's a huge reason why people want to use Coffee Shop Manager." The only part of the program that the system doesn't include is the actual plastic cards. Those can be purchased from a separate supplier for anywhere from 45 cents to $1 per card, Alexander adds. Now the (maybe not so) hard part While such advanced systems offer the potential to make managing a coffeehouse easier, if words like installing, programming and training tend to make you cringe, then these systems may be a little intimidating. However, vendors say that while the systems themselves are pretty sophisticated, operating them is fairly simple. In any case, retailers have many choices when it comes to getting the POS systems up and running. Installation can be as easy as just plugging in the system, but vendors, for a fee, often offer the option of onsite installation. Vendors may also offer pre-installation, where the system is delivered basically ready to use. "Many of the retailers, more and more, are doing self-installs and simply plug in the unit," says Craig Fuss, national sales manager for CRS, Inc., St. Paul, Minn., developers of the 3000 POS, tagged as the first low-cost foodservice terminal. "But you still need some training." Fuss says for lower-end systems, training might take a couple of hours and will include the basics, such as how to open the system at the beginning of each day, ring up transactions and change mistakes, do refunds, pull data reports and add menu items. The Exalt POS system, developed for small retailers by ParTech, Inc., New Hartford, N.Y., is extensive in what it can do. However, when it comes to using those features, such as running sales reports at the end of the day, the system is not complicated. "Training the retailer on how to get that information is minimal," says account manager Brad Van Parys. "It's pretty much intuitive." Van Parys says users who need instructions on how to perform a certain function can simply press a button and get that information. "It's all graphically oriented," Van Parys says.
Many of the systems include touchscreens, which prompt the user what to do next and make training fairly simple. Last May, brand new coffeehouse retailer Angie Cummings spent about five hours via phone with a technical support person from POS Core Technologies learning how to operate her new Coffee Shop Manager system. The very next day she opened up shop for the very first time. "I was able to run it," says Cummings, owner of The Mane Grind, Greenville, Texas, referring to her new POS system. Within a week, Cummings says all of her 15 employees were able to use the system, as well. "Had I not got a system like this, I don't think it would have been possible." It took Cummings' husband, an architect, and a friend about two hours to install the hardware. Cummings' system came pre-programmed with her menu items. Many of the pre-existing names of menu items were easily adapted to Cummings' menu; a few names of the specialty drinks differed, she says. But Cummings says she soon learned how the system works. "Now I can go in and change the names and change the prices," she says. "It's really neat." While, for an additional cost, vendors can provide the system pre-programmed with the retailer's full coffeehouse menu, retailers may also program the menus themselves, but that can be a little trickier. "They don't have to pay us to do it," although that option is available, says Hibbert. Red Eye includes a "product wizard," a function that assists users in programming the menu. Hibbert says retailers will probably spend about five to eight hours entering their menus into the system.
Vendors may also offer phone and/or online technical support, but the costs for such services can vary. Some include a year's worth of free phone support with the purchase of their POS systems, and then charge an annual fee after the year is up. RedEye offers 20 hours of free phone support and unlimited e-mail support, says Hibbert. Generally, she adds, retailers will have problems with hardware, rather than software. "The software has been thoroughly tested," she says. To buy or not to buy Ideally, every new specialty coffee retailer would open up with a brand new POS system all set to report what drinks are selling best and when to order more biscotti. The reality, however, is that after having spent thousands and sometimes tens of thousands on build-outs, equipment, furniture and supplies, many retailers may not have the $3,000 to $5,000 it can take to set up just one system. Additional terminals, back-office headquarter systems and even credit card modules may often be hundreds of dollars extra, which means that total cost can easily top $10,000 for multiple locations.
Indeed, says Hibbert, more simple operations such as carts or kiosks may only require cash registers. These can often be purchased at a discount supplier for anywhere from $300 to $600. While they are sufficient at ringing up sales, they won't, of course, include the office and accounting functions of a POS system. If an operation has a large staff, multiple locations or complicated orders, Hibbert says a POS system is necessary. "I would definitely make that type of investment," she says. The good news, says CRS' Craig Fuss, is that there seems to be a parallel trend going on. Electronic cash registers, which CRS also sells, are becoming more sophisticated and come with PC-type software, while POS systems are becoming less expensive, he says. The smart strategy, Fuss continues, is for a retailer to figure out what the coffee shop business requires. Retailers, for instance, should identify specific problems or weaknesses in their current systems and then research how a new system can improve those problem areas. Fuss warns retailers to be careful with what they're buying, because sometimes servicing these systems can be problematic. "As you get into the higher-priced systems, service becomes more of an issue," he says. Some retailers may want vendors who can offer onsite technical support from local dealers or sales offices, but not all vendors offer that, he says. Also, specialized systems may be appropriate for a specific industry, but may also be restrictive, Fuss adds. A retailer may want to add non-food related merchandise, which some niche POS systems may not be geared to handle, he says. Software, it seems, is not the only consideration, points out Brad Van Parys. Restaurant equipment takes a lot of abuse and hardware needs to be able to withstand that. "What ParTech is known for in 26 years of business is the quality of the equipment," says Van Parys. "The equipment is designed for the restaurant industry." Whatever the system or hardware encompasses, vendors say that POS systems really make a huge difference when it comes to running a business.
The systems may offer invaluable ways to manage costs better, which means a retailer may even be able to recoup the cost of the investment in less than a year. So, explains Van Parys, if a small retailer grosses $500,000 annually and a POS system, by controlling food and labor costs, can save 1 percent or 2 percent of sales, "Then you're looking at a sizable amount in savings." Ed Snyder, sales manager for SelbySoft, Inc., Puyallap, Wash., compares running a retail operation with a POS system vs. a simple cash register to competing against a V-8 engine with a four-cylinder car. He believes that once a retailer has put all the hard work into setting up an operation it's illogical to trust your business to a less powerful machine. "It just doesn't make sense," he says. "Without these tools, (retailers) can't make the proper decisions." Along with inventory control, time clocks and gift cards, SelbySoft's SP-1 also offers employee e-mail and offers "zero training time for employees." Snyder believes it's really a matter of how to get work done in the most efficient way in a day and age when competition can be cutthroat and time is at a premium. "That really is the position that every single business owner is
in," he says.
Please Note: Some pictures
or diagrams are only Originally
published - October 2004
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The complete
Latte POS setup from Coffee Shop Manager, including PC, touchscreen,
printer, cash drawer, customer pole display installed in and on a
retail counter. Photo taken at Lyons Den, Bothell, Wash. 
Photo courtesy
of RedEye Enterprises.
Photos courtesy
of ParTech, Inc.
At The Mane
Grind in Greenville, Texas, employees Lauren Hollon and Sydney Harmon
help customer Carson Cummings using a Coffee Shop Manager POS.
Employees
Hanna Boshart and Matt Virgil help customer Kacie Cummings using a
POS system from Coffee Shop Manager at The Mane Grind in Greenville,
Texas.