How Much Should You Spend on Computerization?

According to the accounting and consulting firm, Price Waterhouse Coopers, the average retailer spends 2% of their revenues on information technology per year.
So, for example, a restaurant doing $1,000,000 in gross sales will spend, on the average, $20,000 per year on information technology expenses.
Interestingly enough, other businesses spend 8% or more on their information technology.
It’s only recently that the retailer segment has been catching up with the rest of the world.

It is also estimated that, on average, your IT investment should yield 5 times your investment in greater annual profits (increased revenues and reduced costs). A retailer doing $1,000,000 per year should yield an additional $100,000 in profits as a direct result of computerization and automation of operations.

Where do increased profits come from?

Better inventory control with computerized systems means significant reductions due to theft and shrinkage.

When your employees know that the inventory is being monitored loss due to theft dramatically decreases. As a matter of fact, your employees become more likely to help monitor your inventory and further reduce what had previously been unexplained inventory losses. One small neighborhood restaurant claimed that their gross sales went up by 50% after computerization because they finally were able to account for and reduce the amount of free food and drinks given to customers by the wait staff.  A video camera system can reduce theft even more.

Better inventory control lets you know which products are selling the most and which yield the greatest profits

Most small to medium business owners believe they know which products are their best products. Most are surprised with the results when they see actual results on paper. Just seeing reports of your 20 best and 20 worst selling items can give you a new insight into your business.

How much profit did you really make today? You may know how much money is in your cash register, but do you know how much of that money is your profit???

Quicker, more accurate checkout is assured with computerized systems

Your staff wastes time and customers do not like waiting if your not properly computerizing your store with high-speed networks and modern computerized systems.

Increased revenue generating opportunities without added costs

Get the email addresses of your customers and stay in touch without any additional costs. Its been estimated that when you correspond with your customers about specials, sales and other events, you can increase your sales by 10% or more.  Your profits can grow by this amount if you’re using email, but you can also use your computerized system to maintain mailing addresses to and send notices and coupons via mail.

Consider all of the factors noted above and you can see easily see why computerization can easily add profits to your bottom line.