Why settle for being unemployed for years when you can start up a business? A POS business is one of the most overlooked yet lucrative opportunities available today. Many people are not aware of the booming nature of a POS business, but the reality is that having a steady income stream is better than depending on family members and friends.
A POS business is not just for the unemployed. One can have an official white-collar job and also control some POS units, as long as trustworthy individuals are employed to oversee the business. This business is very lucrative because at every junction, there’s always a POS kiosk, and it blossoms in months if there’s consistency.
This article highlights and explains the 7 essential steps to follow upon opening a POS business successfully and the basic equipment needed to run it well.
Key Insights
- POS business is a lucrative business that needs just a little capital to start without breaking the bank, making it accessible for anyone with ₦50,000 to ₦200,000.
- The POS business is flexible and allows individuals to have an office job whilst running it, as long as a trusted sales representative is employed at each terminal to attend to customers.
- POS business is ideal for the unemployed and nursing mothers, giving the versatility to run a business yet have ample time for personal responsibilities.
- Despite the little money realised at each transaction, multiple daily transactions help the business grow well by virtue of the interest realised, making it a rapidly blossoming venture.
What is POS?
POS, in layman’s language, means Point of Sale. However, for further explanation, it simply means the process of paying for a transaction rendered by the terminal owner. It refers to the process whereby a customer uses his or her card to make payment for goods bought, cash withdrawal, cash deposits, or even to make payment for betting games.
These payments are possible in that the customer inserts, swipes or taps the card into the POS machine, the machine in turn notifies the cardholder’s bank, clarifies if the transaction will be possible, asks for the PIN from the cardholder, generates a receipt if successful whilst the terminal owner in turn gives the customer the money required.
One unique feature of POS is the swift ability to provide money or make quick payments when needed. Therefore, it is safe to say that POS solves problems related to the shortage of cash flow indigenously.
What is a POS Business?
A POS business simply means the act of using the POS machine or terminal to deposit or withdraw cash, make utility bill payments, transfer money from one end to another and send airtime or data to customers who are in need.
A POS business is so useful that it is an easy go-to place when there’s no accessibility to a bank, when a quick transaction needs to be made to avoid delay, or when stranded. However, a POS business requires financial personnel who act as a channel or link between the customer and the transaction to be made.
Who Can Start a POS Business?
Venturing into a POS business requires knowledgeable, intellectual individuals due to its demanding nature. However, any individual with the following qualities can start a POS business:
- An individual with at least ₦50,000 to ₦200,000 sum of capital
- A knowledgeable individual
- An individual who can at least read and write
- An individual who can speak basic language in their community so that he or she can understand them when transactions are to be made
- An individual who can operate the terminal after the essential training has been completed
- An individual who can adapt to changes and can tolerate other people’s excesses
Why is Venturing into a POS Business Essential?
Formerly, before any monetary transactions could be made, one had to get to the bank, and this took lots of time and energy because of the long queues. However, the reverse is the case now, all thanks to POS terminals almost everywhere we go. Venturing into a POS business is essential because:
It is Profitable and Lucrative
Venturing into a POS business is very lucrative because there is a daily steady income. One cannot venture into a POS business and be broke because for every transaction made regularly, profit comes in.
Brings the Bank to the People
Venturing into a POS business enables easy access to any financial service. In some rural areas, banks are quite far from people’s abodes, which is why a POS business is needed to fill the spot of the banks. Also, venturing into a POS business curbs the stress of going to the bank, facing long queues in the ATM area or banking halls.
Demands Low Capital
Venturing into a POS business requires just a little to start up (can be termed little for more kinds of business). It doesn’t really need so much money unlike other businesses.
Gives Room for Versatility
Venturing into a POS business gives room for versatility in that one can decide to have other businesses or any other white-collar job whilst at it. A POS business is quite flexible which is why we see many entrepreneurs venturing into it.
Basic Tools to Start a POS Business
As lucrative and easy as a POS business is, it requires some inevitable tools without which it would not be possible to operate successfully. The basic tools are listed below:
- A terminal (both hardware and software). It is also known as the POS machine and its work is to insert cards, press the PIN, accept transactions, and print out receipts.
- A good location that is market-friendly
- A kiosk, or a table, chair and umbrella for shielding come rain or sunshine
- A banner with the inscription of your business name, phone number and the transactions you do
- A reputable sales representative who operates the POS machine
7 Essential Steps on How to Open a POS Business
Opening a business is one thing, being successful whilst at it is another. This is why it is essential to have utmost knowledge about any business before venturing into it to avoid setbacks. Here, 7 steps on how to start a POS business are succinctly explained for better understanding so as to be successful whilst at it.
1. Pick Your Target Audience
Do a survey or research on who the people you want to serve are. One’s target audience could be people who sell household commodities, foods, fruits, wholesalers, retailers, etc. It is important to pick a target audience that makes daily transactions, whether by withdrawal or cash deposits, so that one’s POS business can blossom fast.
2. Find a Good Location that Meets Your Target Audience
After knowing one’s target audience, the next step is to find a location that suits them. This answers where one can find his or her target audience. If one’s target audience is where wholesalers are situated, then one’s location will be around industries and warehouses. Other places also include retail markets, supermarkets, rural communities, and roadsides, to mention a few.
3. Have Your Capital at Hand
To start up a business, capital is required; starting a POS business is no different, as the right capital is needed to start it. One’s capital must be on the ground somewhere safe so that whenever it is needed, it can be taken at any time.
4. Buy the POS Machine and Other Essential Equipment Alongside
The POS business cannot thrive without having a terminal or POS machine and other things that work with it because this is the major equipment needed to run it. There are various types of POS terminals like Opay, Moniepoint, Palmpay, VTpass etc. It is essential to make enquiries from other people so as to know the best POS terminal.
Also, other equipment and gadgets such as kiosks, shops, umbrellas, chairs, tables, and an extension box for charging when there’s electricity are all needed to be purchased for the business to thrive well.
5. Acquire a Licence by Registering Your POS Business with the CAC
Where other businesses are operating without being registered, a POS business is required to be registered to build trust amongst customers and to avoid being sanctioned or flagged. Having a licence is compulsory to avoid future problems like fraud and all sorts of illegality.
6. Take Security Measures
Due to the fact that a voluminous number of people use the POS terminal daily, it is essential to take security measures to ensure safety on the part of the customer (their private PIN and private information) as well as the POS business owner.
7. Invest in Training
Whether a sales representative is employed or the POS business owner decides to be the operator, it is essential to go through thorough training whether via videos or through a senior colleague.
This is important so as to know the guidelines to follow, to know how the terminal is operated and to know how the business works especially during peak periods (like salary week, school fees era, early hours of the day and after work) when rapid sales are made.
How to Boost Your POS Business
The POS business is very lucrative, but some factors need to be considered if one wants to boost it so that customers can keep coming.
Be Consistent
As a POS operator, one must be consistent, the ability to resume early, as well as being able to meet needs, gives customers the assurance of coming over and over again.
Be Friendly
You as a POS business owner or operator should be friendly to attract customers. You must have good customer relation skills so that referrals can be made which in turn promotes more profit.
Be Current with New Financial Trends
As a POS business owner, it is important to be aware of any new developments or regulations set by the Central Bank of Nigeria.
Have an Account Officer in the Bank
Having an account officer in the bank is important for instant solution to transaction failure that comes from the terminal end. This will attract more customers and aid profit because of the assurance and trust they have in one’s business.
Challenges of Venturing into a POS Business
Some challenges facing the POS business are itemised below:
- A POS terminal cannot work without data or WiFi
- A POS terminal often has network issues which disrupt transactions from taking place
- A POS terminal cannot work without being charged. This is a challenge in the midst of people who have a shortage of electricity supply
- Outrageous commissions are deducted by the POS financial partners
- A POS business is open to robbery when adequate security measures are not taken
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Conclusion
As stated in the above article, venturing into a POS business is very good as it curbs the high rate of unemployment in the country, increases money flow, curbs banking halls troubles etc.
However, the essential steps as to opening a POS business must be strictly adhered to which are: identifying one’s target audience, finding a good location that is business worthy, having a capital at hand, going through the necessary training as to how the POS terminal is being operated, having an account officer in the bank so as to solve transaction problems.
Also, it is essential to purchase the necessary equipment and gadgets like extension boxes, POS terminals, chairs and tables, umbrellas, a kiosk or shop etc. so that the POS business can move forward.
No doubt, a POS business faces some challenges like power outage, theft, network problems, outrageous charges from financial institutions etc. but nothing thrives as fast as a POS business! Give it a try and be glad you did!
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