Monday, June 20, 2016

Too many restaurant vendors. Time to bundle!

Here's something every restaurant in the world has to deal with: multiple vendors. Now for the case of this post, we're talking just about front-of-house (FOH) vendors. There's a vendor for the point-of-sale (POS) system, another for the reservation/FOH management system, another for the credit card processing, and possibly one or two more for food delivery, pay by phone, etc. That means that each month the owner is shelling out money to pay for the fees and/or equipment rental for each of these services.

That's thousands of dollars leaking through your hands that could be going to pay for the increase in minimum wage, another employee, or a new piece of equipment. The solution is to eliminate all those fees by reducing the number of vendors by bundling.

Bundling is common. Consumers are used to it in such things as bundling their cell phone, cable, and internet services together. Companies such as Verizon offer such bundles at a price that saves you money and allows you to deal with just one vendor. 

Let's look at some areas where restaurants are spending money.

POS - Point-of-Sale (POS) systems often have a huge upfront cost that includes the equipment, training, and installation. Some as high as $12,000. After the system is in, there are the monthly fees for the service and often fees for rental of the equipment. Many systems do not include ongoing technical support and upgrades, so there can be an additional fee for that. As you can see, oftentimes it is in the thousands of dollars with cost prohibitive monthly fees to have a good POS system.

Reservation/FOH system - Just like with POS, there are a large group of vendors selling their reservation systems. All of them work off of monthly fees for the service ranging from free to thousands of dollars a month. There's the saying, "You get what you paid for". That pertains here. Free systems might save you money, but they won't have functionality or good tech support. The ones that charge by cover fees run into the thousands saying they offer you marketing in return. Many restaurants don't need marketing; they just want to be able to manage their FOH.

Credit card servicing - Every time you run a customer's credit card, the vendor and the bank get a cut. Your customer's bill might be $50, but you only get $48.50. During the course of a day, a month, or a year - that adds up to a lot of money lost. 

The key is to find a single vendor that can do all these services for a low price. Unfortunately, there are currently no such vendors who have this full integration of products.  But stay tuned for more on this from Guest Innovations….

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