Pat Delany answers business-related technology questions, and he was recently asked by the owner of a small Mexican restaurant whether or not the restaurant should adopt a point of sale (or POS) system to input and process food and drink orders. Previously, the restaurant used the traditional method of passing a slip of paper with the order written on it around the kitchen and the bar. The owners needed a more efficient method of taking orders, but they weren’t sure their restaurant was large enough to justify a shift in their processes.
Pat Delany pointed out that they should definitely invest in a POS system. For a small restaurant, the installation and implementation of a POS system would generally run about $3,000, including a couple hundred per year for maintenance. While this initial overhead might be onerous, Mr. Delany contends that the investment pays for itself over time.
Pat Delany points out that minor errors, such as forgotten soft drink orders or incorrect food orders, add up day after day, month after month, and can easily exceed $3,000 in one year alone. Often, such issues as sloppy handwriting or misunderstood notation can result in an incorrect order.
Pat Delany knows that implementing a POS system helps restaurants not only cut down on the money lost by human error when an incorrect order is placed, but also prevents the “soft costs” of lost customers, poor reputation, the lost time spent correcting errors, and smaller tips. Overall, errors caused by mistaken orders cost restaurants industry-wide between 3% and 5% of their gross revenue.
Pat Delany therefore tells whoever asks him that, despite the initial costs, a good POS system definitely makes a positive impact on a restaurant’s ROI. Even a restaurant that only has twenty tables should consider this technology, which will pay back dividends as the years pass.