General Manager’s Guide To POS: Maximizing Small Business Profits
Part VI, the final part of the General Manager’s Guide
We’ve covered the basics of POS, best practices for using POS technology in both the front and back of house, and how to ensure you have satisfied, loyal customers and efficient, long-term staff. What else is there?!
Oh, yes: MONEY! You’re in this business because you love sharing food and drinks with a community of people, but we can’t ignore the priority of your bottom line.
This final chapter of the General Manager’s Guide is all about maximizing profits. *Cue Who Wants To Be A Millionaire theme song.*
Identify The Total Cost Of Ownership For Your POS
When you’re brainstorming how to maximize the money that’s coming in for your business, it’s important to first consider the money going out. Your POS system is essential to doing business, and while it’s well worth the investment, you should identify your all-in costs to ensure your POS provider is prioritizing your profitability.
We talked about the various costs that go into POS (platform, payment processing, hardware, onboarding) and all of these elements, in addition to your POS system’s value, make up your total cost of ownership.
Here are steps to help you identify the all-in cost of your POS:
- Identify the cost of each POS fee: Your POS provider should be transparent about what they charge. If you can’t get a straight answer about a cost you’re incurring, you should seek out a more trustworthy partner.
- Compare price tags among providers: Rates are competitive among POS providers. This is where you’ll typically find wiggle room in costs:
- Payment processing fee structures: Providers either use interchange plus or flat rate processing. Interchange plus charges the true pass-through cost for all card types, meaning you get cheaper debit processing. Go in depth on fee structure comparisons here.
- Per-feature fees: A provider’s platform fee may be less expensive than others, but they could be making up those costs in feature fees every month. Identify what features your business needs and if you must pay to access them—this goes for Customer Support, reporting, online stores, contactless ordering, loyalty programs, etc.
- Consider the overall value of your POS: The price is right if your business is getting high value at a fair cost. Noodle on what your POS is providing that no one else is!
Arryved, for instance, is full of industry veterans with food and beverage expertise. With a focus on people-centric technology and honest partnerships, Arryved values relationships as much as your business does. Lost Boy Cider price matched with other POS systems to identify Arryved as “the best quality for what we’re paying for” according to Kristie, their Tasting Room Lead.
Once you feel good about the costs you’re paying to do business, it’s time to focus on how to bring more revenue in.
Diversify Ordering Streams To Boost Revenue & Make Ordering Easy For Guests
Here’s a tongue twister: Your business makes more money the more ways you make money come in. That’s why a key way in maximizing profits is by diversifying your ordering streams.
Contactless Ordering Makes It As Easy As Possible For Guests To Order
The three contactless ordering tools we previously discussed empower guests to quite literally take ordering into their own hands. Of course, using QR code ordering, online stores, and a mobile app are also considered diversified ordering streams.
QR codes and mobile apps allow guests to order themselves on-premise. Whether a guest is taking a work call from your coffee shop and needs a refill, or a table of chatty friends is ready for their next round of cocktails, these contactless methods allow them to easily order more without disrupting the conversation. That’s revenue your business may miss out on if you rely solely on servers or counter service!
Online ordering captures off-premise sales. A virtual storefront meets the demand of couch dwellers who want to enjoy your offerings from the comfort of home or even get your merchandise from out of state. Both ecommerce and to-go sales are vital to maintaining a growing business:
- 60% of Americans order delivery once a week
- 40% of total restaurant sales are online orders
Pop-Up Bars Increase Tab Size & Expand Your Market Reach
There’s a variety of ways to execute a pop-up bar successfully, but let’s focus on two primary methods:
On-Premise Pop-Up Bars Give Guests More Ordering Options
If you have a large space, it’s a good idea to set up a pop-up bar in addition to your main bar. Dividing traffic among multiple bars reduces lines and wait times for guests, and takes the heat off your busy bartenders.
Plus, with card on file technology, guests can open their tabs at one bar, get their card back, and now their tab is open throughout your establishment! They can order from a different bar without having to close out and open another tab.
Avondale Brewing Company, an exclusive Live Nation music venue, boosted average tab size by 11% with the help of pop-up bars. By making it easier than ever to order, they immediately saw guests ordering more.
Off-Premise Pop-Up Bars Get Your Product In Front Of More People
It’s also considered a pop-up bar if you set up shop at a farmers market or festival of sorts. Here, pop-up bars spread brand awareness, cast a wider net of customers, and increase revenue potential!
Events Offer Fruitful Revenue Opportunities
Speaking of selling off-premise, attending events is a great way to expand your market and meet prospective customers outside of your regular neighborhood crew.
Events also present an opportunity to collaborate with other small businesses. Say your local flower shop is interested in bundling products: Buy a bouquet and 6-pack for $30! By teaming up with another brand, your business gets visibility from their established consumer base, and vice versa.
Plus, with the right tech stack, your POS is ready for any event off-premise:
- Offline mode lets you take orders without WiFi or a cell signal
- Wireless mobile POS devices travel with you in your back pocket
- Card on file lets you keep tabs open for guests that know they’ll be ordering again soon
Diversified Revenue Streams Inherently Boost Tab Size
Not only should you diversify how your guests can order, you should diversify what you offer! Here are different revenue streams to consider:
Food Inspires Longer Stays
If you’re a craft beverage business, your bread and butter is primarily liquid. You don’t have to change your business model, but adding a food option on-site guarantees longer stays, which means guests will order more of your delicious beverages, too!
If you’ve never offered food before, it doesn’t have to be a big lift. Experiment to see what your guests like and what bandwidth your staff has:
- Offer snacks of local brands: Your food offerings don’t have to be a complete meal. Chips easily tide over a growling stomach, and small bags make for easy clean up. The Empourium Brewing Company, for example, offers gourmet bags of Denver-local Kettle Head Popcorn to guests. It’s the perfect salty snack to inspire another round!
- Try a minimalist kitchen: If you have the hands to whip up some of your own food, start small with a panini press or toaster oven. No one has ever complained about a simple grilled cheese with their wine, amirite?
- Invite food trucks to your parking lot: Food trucks are a great way to offer a rotating variety of grub onsite. The Rayback has had incredible success with their food truck park model.
- Collaborate with other businesses: Lean on your neighbors and set up some sort of partnership. The taco shop next door would appreciate the love, and perhaps they’ll send their customers your way, too. With a POS like Arryved, you can even set up off-site printing so your neighbors receive order tickets directly from your guests.
Merchandise Creates Brand Buzz
As well as being the perfect upsell that spreads brand awareness, merchandise is a revenue stream you should add if you haven’t already.
Merch can be as grand as sweatshirts or as small as koozies and bumper stickers. Make sure to cater to your particular consumer base to really boost revenue. If guests come to your patio all the time with their dogs, consider branded collars!
To-Go Products Make The Perfect Souvenir
…and guests spend 32% more when they purchase to-go! That’s a significant revenue opportunity. Package food that has a shelf life and can or bottle your precious liquids—it’s clearly worth the investment.
Ensure First-Time Guests Come Back Again & Again
Convincing your current guests to come back again is a lot easier than getting first-timers in the door. Here are three strategies to re-engage existing customers to garner that sweet repeat business:
1. Loyalty Programs Reward Guests For Spending Money
How do you best encourage guests to repeat their current buying behavior? Reward it!
Regardless of the kind of loyalty program you implement—point, item, or promotion-based—it encourages both brand loyalty and return visits.
2. Email Marketing Generates Investment In Your Brand
Your POS devices can help you collect email addresses at checkout, and once you have ‘em, use ‘em!
Email marketing has the highest ROI of all forms of marketing, averaging a $36 return on every dollar spent. In this digital age, people are constantly checking their inbox. Emailing guests at the right time with the right message can lead to an instant sale (especially if you offer off-premise ordering) and encourage guests to come back.
And while you want to send sales-focused emails promoting new merchandise, discounts, or event invites, email should also be used as simply a guest engagement tool. Spark interest in your brand by sharing business updates, stories from beloved staff, or a look inside how you make your products.
Sing Sing Kill Brewery, for example, has found tremendous success in sending a weekly email newsletter. They update guests on the happenings in their taproom, promote sustainability, and share what’s new on the menu. Guests have become invested in their brand, and a mouthwatering new menu item always inspires a visit!
3. Collect Feedback To Show Guests You Care & Improve Future Experiences
As a General Manager, there’s only so much you see for yourself on the floor. Eliciting feedback directly from guests not only makes them feel heard, it identifies where processes can be improved for future guests.
Here are a few different ways to collect feedback:
- Comment cards: A comment card that comes with the check is a low-effort way to hear from guests. Simply ask what they loved and leave room for any constructive feedback.
- Online surveys: Be it in an email or on social media—don’t knock the effectiveness of an Instagram poll before you try it—surveying folks online collects candid feedback fast.
- Third party reviews: Yelp or Google reviews aren’t always the most fun to look at, but once you weed out the trolls, you’re bound to find valuable suggestions for improvement. For unhappy guests, leave a reply and see how you can make it up to them next time.
In fact, every feedback collection avenue provides an opportunity to make an offer for “next time”. If the comment card mentions they loved their cocktail, for example, offer a drink token for another signature cocktail on their next visit!
Strategic Marketing Keeps Your Business Top Of Mind For Guests
Get in front of your guests’ faces more in order to get them to spend more time and money with your business. Try these low cost strategies that make a big difference in your marketing program:
- Social media: You can capture every audience on social media these days. It’s where people read the news, interact with friends, and get ideas for where they should make plans. You don’t have to go viral on Tik Tok to make a splash on social—although that sure wouldn’t hurt—but lean into who you are as a brand and post often. You can post about upcoming events, new product releases, or even some goofy videos of your lovable staff. DSSOLVR’s Instagram is definitely worth a peek!
- On-premise programming: Events on-site act as great marketing tactics. Programming gives you something to talk about on social media and gives your servers something to talk about with guests. Make sure to lean into signage within and outside your business so guests know when the party starts! See some low cost, low effort event ideas here.
- Collaborations: Again, local small business partnerships are critical for your growth in addition to being a lot of fun. Get in front of guests that are loyal to other brands to maximize your profit potential.
Now What? Reporting Identifies What’s Working & What’s Not
You’ve experimented a ton with all of these revenue boosting efforts. Now it’s time to identify what you should keep doing and what didn’t move the needle.
We’ve touched on these POS reports in previous General Manager’s Guide chapters, but the following help you quantify profit maximization efforts as well:
- Sales By Category: Are you selling new product bundles at the farmers market or now offering light snacks in your tasting room? Filter by the specific product you’re experimenting with and check in on its sales performance using this report.
- Average Tab Size: Added a pop-up bar on the back patio? Check this report to see if it’s been successful in boosting tab size so you can ensure the staff you have manning that bar is worth the labor costs.
- Hour By Hour: Quantify your marketing efforts using this report. If you busted your butt promoting an event across social media, see if traffic actually spiked during that period of time. This will help identify what kind of programming makes your guests tick.
POS Is Critical To Your Business’s Success & Profitability
As you can see, your chosen POS is a key driver in your business operations, your staff and guests’ satisfaction, and your profitability. As you narrow down your choice of systems, here’s a refresher on what to identify:
- POS all-in costs: Is the system providing exceptional value at a fair price?
- Features & functions your team needs: Is the system flexible enough to allow for experimentation and make staffs’ jobs easier?
- Readily available staffing resources: Do you have what you need to quickly train, schedule, and tip out your employees?
- Guest engagement tools: Is your POS supporting exceptional guest experiences?
- Robust data: Can you quantify your business decisions in an accessible reporting dashboard?
- Trustworthy partner: Do you believe your POS has your best interests in mind and will be there to support you when you need help or advice?
For Arryved merchants, the answer to all of the above is a resounding YES! Request a free custom demo of Arryved today.