Introduction to Procurement 

“The action of obtaining or procuring something.”

It is a simple definition, because it is a simple process:

1. Define what you need
2. Get and Review Options
3. Make a selection
4. Make an Agreement
5. Partner with the supplier

Why Procurement Matters? 

You are either procuring something or being procured. Services and Software are the most common items entrepreneurs procure. The act is pretty insignificant, but when you start to put this thing in a process is when the value starts to create itself.

You often see people talk about it online saying "wow I had no idea I was paying so much for that software". That translates to - "I have no process for buying software" When you implement a process for buying software and services, you find savings regularly and stop finding as many surprises.

In this playbook, you will find guides you can reference as you begin to build in these processes into your business.

Existing Software Evaluation Questions 

1. Does this tool help you make money? 

2. Is this a “nice to have” or a must have? 

3. Tips to find if it’s a must have: 

• Does this duplicate another service? 
• Is it easy to use, but not solving a new problem? 
• Does it keep me organized?
• Are I using the tool every day or every week?
• Is this still meeting the need compared to when I first signed up for it?**

4. Am I fully utilizing the capabilities? 

5. What are you paying for that could be a service from a Professional Service Provider? 

6. Are you overpaying? You should be leveraging startup or nonprofit discounts that many of these companies offer? 

Software Evaluation Framework - Comparison 

Option 1: 

• Cost: __________________________________________________
• Scalability: __________________________________________________
• Mobile Friendly: __________________________________________________
• Easy to Use:
  __________________________________________________

Notes:

Option 2: 

• Cost: __________________________________________________
• Scalability:
  __________________________________________________
• Mobile Friendly: __________________________________________________
• Easy to Use: __________________________________________________

Notes:

Who are your Service Providers? 

• Vendors
• Suppliers
• Professional Services Firms (Lawyers, Accountants, Marketing)

List them out 

Marketing 

Sales 

Finance 

How to Avoid Overpaying 

You need clear deliverables. What exactly do you need the supplier to do? Laying this out on a basic piece of paper is the first step to getting clear. You can find a framework in the implementation section.

After you have clear deliverables ensure you are using a payment setup where the work doesn’t get ahead of the payments.

Are Your Current Suppliers Working for You? 

When evaluating service providers, there are 3 essential questions to ask yourself. Everything outside of these questions is secondary.

Here are some essential questions to ask yourself:

1. Are they making me money?
2. Are they losing me money?
3. Do I like the person I am working with?
4. Do you know exactly what you are paying for?
5. Are they delivering on time and with excellence?

Define What You Need 

Communicating your bottom line requirements helps eliminate confusions and helps providers meet your expectations.

1. Service
2. Goals
3. Budget
4. Requirements
5. Deadline

Selection Factors 

These factors help with evaluating the total value of the service provider.

Switching costs - This is the cost of onboarding a new supplier to your team. Consider that the supplier has to learn about your product, yourself, your team and your way of working. This takes time and may take a few months depending on the service. Thinking through what the “switching costs” is essential in evaluating a supplier for their future performance because

Familiarity - How familiar are you with this vendor? Are they a friend or a family member? This should be noted because introducing business into a relationship brings a relationship tax on the business relationship and depending on how successful the supplier is in meeting your goals this can be catastrophic on both the business relationship and personal.

Quality - Define the quality of what you are looking for and what you are currently not getting from your current that you need. .

Savings - This one is straightforward how much are you saving month over month or year over year from going to a new supplier. I list this one last because At the scale you may not get significant savings from switching suppliers, but it is very notable if you do.

Reviewing Options 

Services Supplier #1 

• Cost _______________________________
• Timing _______________________________
• Expertise _______________________________
• Trust _______________________________
• Payment Details _______________________________

Do it Yourself Vs. Buy a Service 

Just because you can do something doesn’t mean you should. As a business owner, you learn to do a lot of things or “wear a lot of hats”. The challenge with that is it makes it hard to know when to Make vs. Buy a service.

Availability - Time to execute the tasksCapability - Consider if what you are “making” fits within your core services or would you have to “learn something” to execute the work

Examples

A photographer buying headshots as opposed to taking their own headshots A programmer bringing on coding support when they don’t have the availability

What's Next? 

Implement these frameworks

See a shift in how you operate. 

Need More Help? 

Work directly with me cyrinaengineer.com 

Caution 

Before bringing on a person, think about what the specific tasks you need are because you may be hiring ineffectively.

Consider restructuring ahead of a hire. Clients I have worked with, often bring on common titles like: Project management, Operations Director, Executive Director, etc when they might need an executive assistant and outside firm to help them increase their capacity.

With smaller teams, I recommend clients have generalists on their teams. You need people who can fulfill a few roles while you grow and pivot as a company. You generally find this process easier to do when you have people in roles that can adjust over time.

Sourcing the right people is crucial in this stage of your business. You need vendors and staff who can perform multiple types of actions as you grow and evolve. People with multiple skills are crucial to early businesses. You want people with many skills who can take direction. Before you outsource to a Virtual Assistant, remember they are only as helpful as the direction you give them.

If you have a big project or growth moment coming, you might think about bringing on a vendor or person to the team. Before you do the path to assessing "are you in a place to hire?” Is there software you can use? Can you bring on a vendor to execute the work?

Hiring Process 

Before you bring in anyone into your organization you need to have to make a strong understanding of your values and how they show up in people in the hiring process. Values shouldn’t be on a shelf. You have to know how the people on your team fit those otherwise there will always be something that doesn’t “fit”.

Examples of values:

• Integrity
• Trust
• Excitement
• Joy

These are just examples. Pick some that feel authentic to you and if you don't see the team member exude them you have other options.

List out your Values:

Questions to ask contractors 

• Does this rate fit your regular hourly rate?
• What are your available hours per week

Onboarding:  

What does the person do when they walk in the door the first day? You can think through what exactly that looks like in the 30-60-90 day plan you make.

30-60-90 Day Plan 

https://www.youtube.com/watch?v=3cWJnLfId8s

What does success look like for them?  

Make time for the person you hire. Make time for the person you hire. Make time for the person you hire.

They will not continue to develop without you pouring into themBeware of Chat gptYou need a deep understanding of the start to finish process of your hiring, onboarding, and offboarding process. AI use can muddy the waters