Computer Entry Systems Corp., a Silver Spring company founded in 1969 that designs and manufactures optical reading equipment used by banks and retailers, is planning an initial sale of its stock to the public.

According to a registration statement filed with the Securities and Exchange Commission, Computer Entry plans to offer 700,000 shares at about $8 apiece next month. An underwriting syndicate headed by Hambrecht & Quist and Baker, Watts & Co. of Baltimore will manage the proposed sale.

Of the stock being offered, 400,000 will be sold by the company and 300,000 by selling stockholders. Computer Entry plans to use $1 million of proceeds toward construction of a new, $3 million manufacturing facility, $300,000 to buy equipment and the balance for working capital.

With the decision to "go public," information never before available to the general public has been filed with the SEC. The preliminary prospectus reveals that the Silver Spring firm, which currently employs 85 persons, had profits of $1 million (36 cents a share) last year compared with $832,000 (32 cents) in 1979 as sales rose to $5.9 million from $4.6 million.

For the last three years, annual sales have grown at rates of 60 percent, 49 percent and 28 percent, mainly because of larger quantities of products shipped at higher prices. The firm's return on stockholders' equity was 39 percent in 1978, 42 percent in 1979 and 34 percent last year.

Although Computer Entry had firm orders on its books as of Dec. 31 for $8.3 million of products (versus $2.5 million a year earlier), the prospectus warns potential investors that the Silver Spring company faces competition in a market "subject to rapid technological innovation" from some industrial giants; International Business Machines Corp., NCR Corp., Burroughs Corp., and Amer-O-Matic Corp., among others.

"Management believes that most of the above firms have substantially greater financial resources than [Computer Entry] and have substantially greater manufacturing, marketing and research and development capabilities," the prospectus states.

One key product, the 7600 system, has been used primarily by banks in connection with rehabilitation and processing of rejected checks that cannot be read by normal magnetic scanning devices.

If the proposed public offering is successful, there will be 2.5 million shares of Computer Entry common stock outstanding, of which some 78 percent will be owned by current stockholders.

Brian Cunningham, 44, has been president and chief executive of the company since it was founded. Prior tothat he was vice president of ESA Inc., which was engaged in selling computer equipment and air pollution monitoring systems manufactured by others. He will own 257,530 shares (8 percent) after the offering and earned $108,000 from the company last year.

The largest owners are First Venture Fund, of New York, which will own 21 percent of the shares after the offering, and TRW Inc., of Cleveland, which will own about 8 percent.