In today’s environment, efficiency is critical. Pawnbrokers everywhere are under pressure to cut operating costs so more of the money spent by customers’ turns into profit. On top of that, customers are more demanding than ever for a quick, problem-free experience and for flexibilities. That’s why more organizations are installing up to date pawn shop management systems, which replace older cash registers or DOS based applications. Pawn shop management systems bring a lot of benefits to pawn operations – for starters, they allow for faster processing of loans, buys, sales, better customer service, and more accurate and effective recordkeeping that can help the company make more profitable business decisions. Do not confuse pawn shop management systems with generic POS (Point-of-Sale) or POP (Point-of-Purchase) systems. Pawn shop management systems are specifically designed to accommodate the pawn operation.
Implementing a pawn shop management system is a big undertaking, and making the right choice is crucial – too many pawnbrokers have wasted time and money installing a system that fails to meet their needs. The fact that pawn shop management systems can range from a few hundred dollars to tens of thousands of dollars makes it challenging for pawnbrokers to decide on the right product, which can create future headaches when you finally plan to rectify the mistake of buying by price alone.
While every company is different, there are 10 questions every pawnbroker must ask when evaluating pawn shop management systems:
1. What features are must haves on day one?
Decisions on features are more commonly based upon your business, employees, inventory, law enforcement requirements and your competitive environment.
Tip: Sit down with vendors to understand the value of their offerings and how the outflow of data provides insightful reports.
2. Is the system flexible and scalable?
Most pawnbrokers are interested in growing their business. Does the product you are looking at have the ability to grow with your needs, or will you be growing out of the program quickly? Software should be viewed as a long term investment. If your plans include multiple locations will you have the ability to share client and inventory data across all locations? Will you have consolidated reporting? Will your provider continue to improve or keep up with changes?
3. Are all the components we want compatible?
There are many software and hardware devices such as the cash drawer, barcode scanner, ID reader even accounting software and merchant service accounts for easy payment processing. Make sure all the pieces can fit together –most importantly, if you already have some of these items; talk to your Sales Representative. Make them aware of these items beforehand.
Tip: Many experts recommend that companies buy all components from the same vendor, so they can be sure everything is compatible. Yes, you will pay a little more upfront, but you will have to ask yourself, what is your time worth and what will I pay a 3rd party to come in if things go wrong?
4. Has the system been successfully used in our industry?
Many systems are designed for use in specific industries – for example, some are built for restaurants, others for grocery stores, etc. That doesn’t mean your business must choose one of those – a more general system might better suit your needs. However, it’s still important to make sure you choose a system that’s been successfully used by businesses similar to yours or designed specifically for your industry.
Tip: Sit down with your vendor and learn how data generated through the system flows into your monthly or annual Profit & Loss statement. Are you able to carry an updated Balance Sheet? Do you receive data on your loan delta, loan yields, inventory delta, inventory yields, and employee productivity?
5. Is the vendor stable?
This cannot be stressed enough! As mentioned earlier, systems are a long-term installation. Ideally you will be using it for years to come. Partner with a vendor that you’re confident will still exist that far down the road.
Tip: You can try to gauge a vendor’s long-term stability by looking at factors such as its customer base, how long it’s been in business, and its record in consistently releasing new versions of the software.
6. How is the support and customer service?
When implementing a system, it’s critical to know the vendor will provide quick, effective support when problems occur – after all, those problems can often prevent the company from bringing in money. When researching vendors, find out as many details as possible about what kind of support is offered. For example, when is support staff available? How many members make up the support team? Is there same day contact guarantee? You can also contact vendor references and ask them about their customer service experiences.
7. Is the system secure?
You house critical data, it’s important to make sure that information is properly protected and backed up in case of a problem. Let’s not leave out the importance of your data being in your possession. We constantly hear stories from pawnbrokers being held hostage by vendors that have convinced a pawnbroker to store their data on the Cloud.
8. Is it easy to use?
The goal is to streamline your daily activities, not slow you down. Also, since employee turnover in most business to consumer industries is so high, it’s important that the system be easily learned by new people. View demonstrations as well as find out what kind of training materials are provided for employees.
9. What will the installation look like?
Before choosing a system, understand how long the installation will take and how much it will intrude on normal business operations. Pay attention and look for the vendor to ask key questions about your operation showing you they understand the impact on your business. Equally important, do not expect to implement your new system within a matter of days. Often it can take a few weeks to transition from one system to another and it will require some dedicated time on your part.
10. How much does the system really cost?
As with most things in life, you will get what you pay for. Choosing a system solely based on price is never recommended. Take the time to understand what the value is to you in your organization. Your software vendor should be able to consult with you on these values if they are in tune with your industry. Choosing a system that fails, is a costly mistake you don’t want to make. Many vendors sell only on price and they do not put much emphasis on tangible returns, which is why they push soft ROIs instead of hard ROI numbers that help you recognize how much you can make or save from the use of the product. Ultimately, it should be an issue of you fully understanding how your investment in software can do more than help you capture data; it can help to increase your bottom line year in and year out while helping make better decisions.