Consultant Izzy Kharasch Dishes on Choosing the Right POS for Your Restaurant

Choosing a POS system can be a major challenge for a restaurant owner, and it’s something Izzy Kharasch regularly helps his clients do. Kharasch is the owner of Hospitality Works, a restaurant consulting firm that counts among its clients several Mexican restaurants. Publisher Ed Avis asked Kharasch to help us understand the process of selecting a POS.

Ed Avis: There are scores of POS systems a restaurant owner can choose from. What is the first piece of advice you have for someone trying to sort them out?

Izzy Kharasch: My main piece of advice is, after you have looked at three or four POS systems that seem like they would work for you, find some other restaurants that have the systems that you’re thinking about buying and set up an appointment and go talk to the manager, talk to the owner, and talk to the servers and the bartenders, because they’re going to tell you how it really works. They’re going to tell you, is it easy to use, is it accurate? Can you correct things? How easy is it to get set up? What kind of reports are you going to get? And then another big discussion is [about] support. When the system went down, how quick did they respond? Because even if it’s the perfect system, if we don’t have good support, we’re not going to take it to the next step.

EA: Speaking of support, is it safe to assume that once you choose a system, it will work in your restaurant?

IK: I like a company that tells me that before they install the system, they’re going to bring out one of their systems and test it to make sure that we have everything that we need to run their system. Because I’ve been with restaurants before where they buy the POS and the provider hooks it up, and they go, “Oh you don’t have enough bandwidth, you don’t have enough internet.” And all of a sudden, now we’re playing catch up to get all these things fixed.

EA: What training should the POS company offer?

IK: One of the things that a lot of POS companies are doing now is selling you the system and saying, “Well, all of our training is done online.” Right off the bat, I will not look at those systems at all because what all of my clients need is [in-person training]. I’m sitting in a restaurant right now and we open in two weeks. Next week the POS company comes in and they install their product. We’re going to bring the staff in, and we’re going to train the staff for a few days and let them play with the system. The POS company is sending in a trainer for two days to be on property with us during the opening so that they can answer all the questions, they can make the fixes, they can train the staff.

EA: What about training new employees who arrive after the POS is installed?

IK: When you get a new employee, you want to make sure that you can put the POS into a training mode so that that employee can play with the computer, ring things up, do all that, but you don’t want it to interrupt your daily sales. So, that’s something that you should ask the POS company: Do you have a training mode that I can use while the system’s up and running so that when I have a new server, we can give them mock orders and all that, they can go in, they can punch in the order and it doesn’t disrupt?

EA: Does the hardware come with the system, or do restaurants buy that separately?

IK: For the most part, the POS companies provide you with the hardware, and that includes the printers, cash drawers and of course, the mounted and handheld POS. But there are companies that say, “We’re going to sell you all the software and everything else, and you could go to Best Buy and buy all of the monitors that you need and go from there.” While that’s a very small part of the POS world today, I think that’s really the next thing that will be coming down the line for everybody. Because once somebody is saying, “Hey, you could really lower your costs and we’re just going to sell the expertise, the software, we’re going to monitor it and you’ll pay certain licensing for our product and we’ll give you 24-hour support,” that’s going to be a big savings for restaurants. I think right now that’s kind of a sleeper, but it’ll become more popular in the next few years.

EA: Is it smart to let the POS company handle your credit card processing?

IK: This is where all the new POS companies are making their real money. You’re getting the system at a very big discount for the hardware and for the software overall, and they’re making the processing fees and all those kinds of things. Good or bad, it’s currently the deal. However, with some systems, you can go out and shop credit card processors. The time to negotiate your credit card fee is when you’re buying the equipment. You could save a huge amount of money.

EA: What else should a restaurant owner be aware of regarding the cost of the POS system?

IK: One thing to remember is that you have to pay a licensing fee every month [based on the number of POS stations you have]. So, you need to ask very distinctly, “What is my licensing fee every month?” [With] some companies it comes out to $300 a month and [with] some companies it’s $1,000 a month for the same six POS stations.

EA: It seems handheld POS stations are becoming more common in restaurants.

IK: The handheld makes ordering quicker for every table. Typically, when I do training for restaurants, the servers get three or four tables to a station. But once they’re really good and they can use the handheld, they can handle six tables and maybe even seven, which makes them 20 to 30 percent more productive. The handheld really is an incredible tool. With our restaurants, we’re tending to get less mounted POS stations all over the restaurant. The easiest way to explain it is that every two handhelds equal one table mounted POS.

EA: What are the essential reports a POS system should provide?

IK: I like to see what were the gross sales, what were the taxes, what’s my net sales, maybe what’s my labor cost for yesterday? I also like to see my cash balance, because it shows me what the deposit for cash is supposed to be. Sometimes in that daily report we’ll do a comparison of sales compared to the last week or sales compared to last year, same time. Another report is called a descending sales report, which shows your best-selling items down to your slowest-selling items. That helps the owner make a decision about what items to get rid of. You also want to make sure the POS connects to QuickBooks [or whatever accounting/management program you use]. This saves us and our accountant a ton of time by having everything dumped into the right software program and helps keep us accurate in lots of ways.

EA: If you buy a new POS system, can you upload your existing data into it?

IK: Some of it, but probably the most important piece of that is gift card data. I want to make sure that that we can transition that data into the new system so we don’t lose track [of balances on existing gift cards]. It’s going to make people very unhappy if they show up with a gift card and you say, “Oh, we switched systems, and how much was the value of that card?” In general, when we’re getting rid of one system and putting in another system, we’re making sure to download every piece of information that we have on the old system so that we have a copy of everything. Because if you don’t do that and you switch systems, it’s possible that they’re going to turn you off and you’ll lose all that information.

EA: Our readers are mostly owners of Mexican restaurants. Is there anything they should consider in a POS differently from owners of other types of restaurants?

IK: With Mexican restaurants, the cocktails are much more detailed. We have 800 tequilas, we have 60 ways to make a

Margarita. And that really is unique to Mexican restaurants. So, your POS needs to be more detailed [in that regard] because somebody might say, “I want a Cadillac Margarita, I don’t want salt on the rim, I want it to be golden, so I want a shot of this in the middle.” Also in Mexican restaurants, there often are opportunities [to mix and match small menu items]. The customer might say, “You know what, I want four tacos, I want one fish, one chicken, one meat, one vegetarian.” And the POS needs to be right on top of that so that the servers can very easily make all of those adjustments quickly.

EA: Have we covered it all, Izzy?

IK: I think so, but it’s a big topic. I guess my major piece of advice that I’d like to reiterate is find three systems to review and make your decision based on how other operators, especially their servers, like the system.