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Module 5 Is This The Right Buyer | San Diego & Imperial SBDC Southwestern College | YouTubeToText
YouTube Transcript: Module 5 Is This The Right Buyer
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Video Transcript
well welcome back how you doing feeling okay
okay
please if you are starting to get a
little overwhelmed right now
don't I promise you we are going to be
here to kind of walk you through guide
you through step by step this is this
these modules are just like drinking
from a fire hose so if you're starting
to feel a little overwhelmed
take a little break
step back
and then
pick up where you left off
so module
for finding your buyer how much fun was
that I hope you liked it
this module module five which means
you're halfway through
is all about whether or not that person
you just found
is viable meaning they are good for you
once again my name is Cheryl Brown I'm a
parent I'm the director of the north San
Diego sbdc I'm also a procurement
advisor been involved with Government
Contracting since 2003 and have been
working with small businesses since 2007.
2007.
resulting in over 800 million dollars in
contracts awarded to those small businesses
businesses
small businesses just like you so
without further Ado let's Jump Right In
I'll say this over and over and over and
over and over again
this goes for the private sector as well
not all business is good business now I
know you're just getting started it
started out it's kind of like hey I'm
going to take everything whatever comes
my way I'm gonna take that and I I get
that you need to generate Revenue
but eventually you gotta take a look and see
see
this is the best use of my time
is this the right Agency for me is this
the right buyer for me and that's what
this module is all about because the
last thing you want to be doing
especially when you're pursuing
opportunities with the government and it
is investing a bunch of time
that isn't going to result in revenues
everything you do
in your business needs to have the goal
the end goal of
with Government Contracting
minimums are really just that they are a
must the government is legally required
to ensure that they award whether it's a
public announcement or not public that
90 that we've talked about
that you meet that your firm meets their
minimum requirements whatever they are
so for example
if your business has been in business
for four years 11 months
and there's an opportunity that requires
you to be in business for five years
you're disqualified automatically I know
it's just one month
but the government there is no Gray
line here there's no gray it's either
yes or no
every agency has different requirements
so you know if you're looking at an
agency and you want to do business with
them we want to take a look and see what
their minimum requirements are
if you can't meet those it doesn't
matter how much they like you how much
they want to do business with you they
legally can't so the minimums are that
past performance meaning what your
company has done in the past not the
individuals within the company is
actually mandated by contract law the
law state and all Government Contracting
all purchases made with your tax dollars
are mandated by law
the law states
if you cannot demonstrate the ability to
perform they cannot award to you and
this is especially when you're in a full
and open competitive bit so I know I
know I know I know you're sitting here
going okay Cheryl um I just opened my business
business
I don't have any past performance my
company hasn't performed on anything
I've been doing this for 25 plus years
if I can't
be eligible for an opportunity because
they don't have past performance how am
I supposed to get past performance if I
can't it's like the Chicken and the Egg
or the car and the horse right
don't panic
many of the agencies I'm going to say
probably 99.9 of the agencies have other
procurement options in which some of
these requirements are a little bit
loose a little bit looser so find a
different agency so for example
San Diego Unified School District which
is one of the largest school districts
in the state of California
has some minimum requirements when it
pertains to some of their construction projects
projects
one of the requirements is that any
entity that wishes to do business with
San Diego Unified School District in the
construction trades there are some other
caveats but generally speaking
must have three past performances working
working
on a school district project
in the last 12 or 24 months or something
cool okay well wait a minute
if you need to have three past
performances to even be considered how
are you going to get past performance if
they won't even consider you
there are over 40 other school districts
in San Diego County
look at them start working with them
look at some of the smaller school
districts and build that past performance
performance
so right now if you don't have that
those three past performance records the
Unified School District is not a good
Target for you at least now so if that's
something that is your goal is to do
business with San Diego Unified School
District then you need to start building
that ability that fast performance with
some of the other smaller school districts
districts
there's always a workaround but this
module is is really designed to see okay
I found my buyer
now is this the right match for me
every agency is different and so please
please don't assume
um because you know what assuming does I
an example here is I and I might have
already mentioned this last time I have
a tendency to repeat myself that's what
happens when you have four boys in
getting old um
um
nav War which used to be called spay War
they have this big huge building off the
five freeway and so this huge white
building obviously needs janitorial services
services
because who else is going to clean right
so if you sell janitorial services and
you want to do that building well that's great
great
but that purchase purchase isn't made
by navor that purchase is actually made
by nav back Navy facilities so the
agency or the entity that is using your
services may not necessarily be the
entity that's procuring your services so
if you are a supplier if you sell
products I'm going to tell you right now
99 percent
bottom line
because let's face it
if I'm a buyer
I can buy a pencil
the same pencil
from anybody I can buy it from Walmart I
can buy it from Staples I can buy it
from Office Depot Amazon whatever a
pencil is a pencil is a pencil
I am required by law
to purchase from The Entity that has the
best price
so one of the first things you're going
to want to be doing if you are a
supplier is to start negotiating with
some of your vendors and your
manufacturers with preferred pricing if
keep in mind these rules
these aren't set up by the buyer
they don't necessarily even care about
the rules I mean they care
but they didn't make the rules so if you
don't agree with the rules if you don't
like the rules I get it who likes rules
don't yell at the buyer the buyer's just
trying to do the best they can and so
one of a bit of advice
when you're dealing with these buyers
and you're communicating with these
buyers not their back
of them remember when we talked about
um in module three what to expect and
the different individuals
be nice to your buyer don't yell at them
and I know you're like how why would you
ever do that trust me when we cover
module seven we're talking about
marketing I'll give you I'll give you
some examples because there are some
horror stories out there
the buyer doesn't make the rules the
buyer just is responsible for make sure
making sure that the rules are being met
met
through a little terminology for this
module past performance
you're going to hear a lot about past
performance especially in module six six
which is the next module on capability
statements because past performances is
super important
past performance
is what your company has done
in the past
not the individuals within the company
now there are some exceptions so
Industries are very technical in nature
in which it's the professionals that
actually perform the service and if
they're credentials that can help uh
secure a project then in that case it
may be acceptable but past performance
will always
Trump professional experience and the
reason behind this is because it has
nothing to do with your technical
abilities nobody is questioning your
technical capabilities
what is in question is the
infrastructure that you might have in
place for your business so
you can look this up I'm not lying to you
par uh far Federal acquisition
regulation part 32 of the code of
federal regulations subpart 9.1
responsible prospective contractors this
is copy and pasted from the law
this is what the buyer has to adhere to
they have to award to the company that
has the adequate Financial Resources to perform
perform
or the ability to obtain that how do you
prove that well by what you've done before
before
must be able to comply with required
Supply and delivery schedules in
addition to maintaining the current book
of business
have a status Factory performance record
have the necessary organization
experience accounting operational
controls all of these things which as a
small business owner myself
we struggle with
I I can talk to you all day long but
I'll like I tell them tell my kids all
the time do as I say not as I do
because as a small business owner you
have so much to do that some of this stuff
stuff
may have fallen by the wayside that's
that's the truth right
but this is why it's so important for
the past performance now
a lot of times if there is a past
performance requirement on a project
whether it's publicly announced or not a
good question to always ask when
appropriate is if they would accept
professional experience in lieu of
there are ways around this smaller
projects projects that don't have as
many restrictions smaller agencies that
don't have as many restrictions the
larger the agency the more the
restrictions so if we go back to my
example withstandingo Unified School District
District
Vista Unified School District won't have
that many of the as strict requirements
they still have requirements so when
we're looking at finding our buyer and
then determining whether that buyer is
the right buyer for us we need to take a
look and see okay what are their minimum requirements
first question you want to ask
does this person
buy your product or service now if you
went through the exercise of finding
your buyer and you utilized your
products and services well you've
answered your question yes they do
but what if you find a buyer and you're
not quite sure whether or not they buy
your product or service well you know what
what
hung them up
send them an email
and in module seven when we talk about
marketing I'm going to give you the
exact words to say
ought to go about doing this but don't
be afraid remember these are people
calling them up and saying hey
um my name is Cheryl Brown and we
provide small business Supportive
Services technical assistance to small
business communities what is the city
city of San Diego currently doing in the
areas of purchasing Small Business
technical assistance services
Dizzy's up
it's like the kiss the uh uh whatever
they call it this Theory
keep it simple
stupid or something like that I always
mess up those says I don't know I have
like this brain block when it comes to that
that
it's past they're people they'll answer you
you
so question number one is do they
does this person
procure your product or service if the
answer is no
do not pass go do not collect 200
take this person off your list
simple as that now
for those of you who are listening here
and watching this and you're like but Cheryl
Cheryl
they they would they could they should
buy my product or service I I get it
but what it could have Shoulda doesn't
pay the mortgage
right now we want to focus on those
buyers that do purchase my product or
service and forget about the rest when
you grow and you have a team of sales
people that all they do eight hours a
day 40 hours a week is pursue business
then yeah maybe they can you can have
them pursue these people to try and
but until then stick with those that you
can confirm already purchase your
product or service
oh another caveat with this as I always
get is well if they're already buying
from somebody else then what's the point aha
aha
the point is at some point
that company they're buying from is
going to fail to perform they're going
to do something
and then there you are to save the day
so and this goes for the private sector
as well
if you are
trying if you are marketing or you are
trying to solicit business
from the private sector the public
sector the consumer sector you want to
make sure that you are targeting
audiences that are already buying
your product or service because now all
you have to do is convince them to buy
from you and why would they because
you're you
and you're better
they can buy from anybody but why would
they buy from you
so first and foremost focus on marketing
to those entities and those people that
are already procuring your type of
product or service
number two
does your firm meet the minimum requirements
requirements
well we don't know right now and there
are a couple of different ways that you
can find this out um
um
one way is to take a look some of the
websites some of the portals
they have
a page that tells you all their requirements
requirements
supplier registration bidder list this
one here even tells you what the
insurance requirements are
this will even tell you what their how
the cut what and how the company economy buys
buys
and so some of the things that you want
to be looking at for minimum requirements
requirements
bonding if required
and then past performance or minimum
requirements or minimum years in
business those are really the three
things now there are some others that
get a little bit more nitpicky but at
this point those are the three areas
another thing you can do
I keep using the county of San Diego
just because it's an easier portal to
navigate most of these portals are are
pretty much the same it's just a
question of where to find the information
information
so I did a little search prior to
recording today for janitor
and then I also
clicked on this one here because this is
the contract so this is the actual contract
contract
that the county of San Diego has with
TNT janitorial all of this is public record
record
so I actually downloaded the contract
and so what this is is 61 Pages it's the
actual signed contract what I can do
here is rather than reading all 61 Pages
because that doesn't make any sense is
I'm going to move my photo down here
if you do control F
I believe if you are an Apple user it's
command f
but what you'll see is you get this
little box up there up here up there put
and what that is going to do is that's
going to take you to the section of the
contract that references insurance so
you can kind of see what their minimum
insurance requirements are so rather
than having to read everything
you can go right to those sections so
here are the insurance requirements
are you able to meet these insurance
requirements if not
move on
another word I recommend searching
is the word bond
and so let's see now that's going to
bring you to the section that require a bot
bot
and so for this one they are requiring a bond
bond
if you don't have the ability to secure
a bond if you don't have the financial
resources to get a bond that's okay then
the county is just not the right buyer
for you right now look at other buyers
another one I like to look at is
and this will then bring us to the
different sections let's say minimum
minimum standard so criminal background requirements
requirements
minimum Staffing
and I'll just go through those areas so
right here janitorial staff required to
have a minimum of three years experience
so these are going to tell you
the minimum requirements
I don't want you to get too wrapped up
in this but at least it kind of gives
you an idea of what you can find out as
far as okay do they buy yes they do can
I meet them in the requirements Maybe
the Third Way
for this third way and this is this is
the easiest
ask them
you've got a person
hey just call them up send them an email
you know hey Susan you know what are the
minimum requirements to be eligible for
opportunities with the county of San Diego
Diego
like insurance and past performance this
is the most direct way and and we'll
learn this more in module seven it's a
great way to get your name in front of
the buyer
now I'm going to go back to that
contract for a moment so this is kind of
like a little added bonus for this module
module
supposing you're looking at maybe being
a subcontractor as opposed to a prime or
directly to the agency I I recommend
that you you do both
but one of the reasons one of the things
that can make it difficult is okay well
how do I find these Prime contractors
well we know that TNT janitorial
services has won the contract with the
county of San Diego to do janitorial
services so now we need to find out okay
well let's contact TNG to see if maybe
we can you know perform on a couple of
their products
properties so I can go control F again
I want you to search the at sign
so that is going to bring you to let me
get my little annotate
annotate
here is the point of contact for the county
county
and look at here
oops here is the point of contact for
TNT janitorial you have a name you have
a phone number you have an email now
now
just call Tam introduce yourself
this is a way for you to also identify
not only agency contacts
but Prime contractors now now I I'll be
honest with you not all portals are this
easy to navigate but at least it but
it's there for you to get started
another thing with this particular
opportunity and we're going to cover
this in um module nine when we talk to
proposal writing but if you do a control
this is going to bring you down let's go
nope there it is okay
this is what the price this is what the
pricing is so this is how much TNT
janitorial is charging
for these locations
a great way to kind of take a look and
see can you be competitive
how are your prices are you in the
ballpark are you way low are you way high
high
once you identify those things we can
really hone in on how we can be
competitive with our bidding and our
we will cover a little bit more of that
in module 9 which is Introduction to
proposal writing but question number two
first of all we have question number one
does this person buy a product or
service yes okay question number two
can you meet your minimum requirements
yes aha
question number three is this the right
buyer for you
and really when we're talking about this
question is we want to look at the
payment terms and the profit margins
maybe it's not the right buyer for you
and that's okay not all businesses good
business I don't believe
in winning a project or bidding on a
project and losing money
now there are some companies out there
that that is a strategy that they will
use so for example they may take their
numbers and cut them off by 30 or 20
percent we call that buying the bid
these are companies that typically have
the capability to do this they have
other business that's supporting them
and they look at an opportunity and they
say hmm
we need to win this so that we can keep
our staff employed and they have a
choice to make and this is this isn't a
right or wrong decision this is a
business choice
if you're a company and you're looking
at an opportunity and it says okay well
if I bid it at these numbers
I have a good chance of not winning
which means I'd have to lay off all of
my stuff or I can cut my original bid
amount by 30 percent almost guaranteeing
me a win and only have to lay off 30 of
not saying it's right or wrong but as a
small business is not something I
recommend I this is not a strategy I recommend
recommend
chances are if you're pricing
based on your cost as a small business
you will be competitive
but this is something especially when
you're a supplier this is something you
want to want to consider
Even If you're receiving even if you're
only getting one percent profit margin
it's still profit
and it may be if you know if you look at
like a million dollar contract
what's one percent of a million dollars
especially when it comes when you
consider that that project is also going
to cover all of your costs
but more on that later on when we talk
about introduction to proposal writing
but generally speaking let's talk about
terminology again
so terminology you'll hear the terms net
net payment terms
some of you may already know what this
all means but some of you won't don't so
let's just clarify what net payment
terms means especially when it comes to
government Government Contracting
net payment terms is the number of days
typically business days
it will take
there's a caveat here
upon approved invoice
and that's where it can get a little
sticky so for example
if you are if you're awarded
a pay for performance contract there's a
number of different terms for this but
basically what that means is you do the work
work
you invoice and then you get paid so in
a per let's take a look at a perfect
situation suppose in your hired to do a project
project
and you start on January 1. and you do
all the work in the month of January
you then typically this is kind of a
general example you then have until
February 10th to submit
the report of your activity
the agency has 10 days to review the
report and either ask for modifications
or approves the report
nine times out of ten they're going to
ask for modifications it's it's just the
case especially if you're you're a
little bit newer and this is a new
agency that you're working with but for
argument's sake let me let's say it's
perfect right so you do all the work
in January
you submit your report by February 10th
the agency has 10 days so now we're down
to February 20th it's it's going to be a
little bit longer than that because I'm
just using you know every single day
this is all business dates but for my
brain and for ease of calculating
they approve your reports February 20th
you submit your invoice
they then have five days to review the
invoice to make sure that it's accurate
so now we're at February 25th
and they approve your invoice
at that point it's on that point
February 25th that the net terms starts
counting so if you're on a net 30 that
means that you will get paid
in a perfect world
by March 25th for the work that you did
in January
I know that sounds kind of scary
most agencies most
their payment terms are typically either
net 30 or net 45. most agencies do have
small business programs in place to help
support that but that's why when we were
in module two creating a foundation for
six best we talked about obtaining
funding in case you need it for cash flow
flow
every module here builds upon the
previous modules
so understanding that maybe this might
mean not to be the great opportunity for
you because of the payment terms there
are agencies that are on a net 180.
it's not their fault it's just the way
they're financing and their funding is
is approved so this is something that
you'd want to take a look at
what are their net terms now you can always
always
go back to that contract
and you can do that control find again
and then you can put the word invoice
and then that's going to bring you to
the different areas where it refers to
the invoice so invoices here invoice
net 30 from receipt and approval of
invoice unless otherwise stated
so those are pretty good payment terms
net 30 is pretty good now if you are a
certified small business or other
certified business you may have the
opportunity to request
better payment terms
Dow doesn't mean that they're going to
approve it but you can request it there
are also some agencies that will pay
quicker if you offer them a discount
some agencies they're super easy to do
business the small of the agency they
are pretty easy and so
you know typically with one of the
agencies that we work with with our
family business we do the work and
typically within two weeks they pay the
invoice and so it all depends uh
everything really comes right down to
being accurate and thorough with your
invoicing with your reporting making
sure that you have when you submit your
invoice you have all the information
needed that they need and things should
go Fairly smoothly from there but as
always as a small business
these sometimes use things fly by the
wayside but you want to make sure that
you that this is good business for your
your payment terms and then of course
with the profit margins
okay frequently asked questions and I
know we covered a couple of these you
know what if
wood could should well let's see remember
remember
doesn't be the mortgage
what if my product or service is
innovated there's
out there like it well there are some
additional programs with the various agencies
agencies
um that you can present your Innovative
product or service to one of the things
you would want to identify though is
what does your Innovative product replace
replace
than what they're currently using or
what umbrella does that Innovative
product fall under and those are the
people that you would approach now if
you have an Innovative product or service
service
that has not had a proof of concept
has not been tested has not been sold
before the government unless they have a
specific program
cannot buy it
they can't
but if you do have something that's
Innovative I highly recommend you
connect with us we do have uh two
centers that work with advice with the
small businesses in technology
commercialization and product
Innovations and things of that nature I
would say connect with them
and then go from there and then you know
continue working on the the uh the
modules here
this is the Chicken and the Egg now okay
so if I need past performance how can I
get past performance if they won't give
me past performance and so you go around
find another buyer
and work with an agency that doesn't
have as strict requirements
and then why can't I just try
I mean I I know I don't you never know
right I you know I don't meet the
minimum requirements but this is a
perfect opportunity and yeah I'm just
going to try
let me tell you something
in the private sector yeah give it a
shot in the government sector
it's not going to work if you can't meet
the minimum requirements
they're never going to look at your
proposal none of it so all of that time
you're investing with responding
will mean absolutely nothing
this is a question of okay how are you
going to invest your time and where is
your time best spent would it be spent
if it's going to take you 10 hours for
example it's going to take you 10 hours
to put together a response but you can't
meet your minimum requirements
or would you should you be taking that
10 minutes and identifying additional
please
if you can't meet the minimum
requirements do not pass go do not
collect 200 and go either straight to subcontracting
subcontracting
or find a different buyer
eventually you'll be able to work with
that buyer as you build those capabilities
capabilities homework
homework
that list of buyers that you
got from module four hopefully you've
got 10 more buyers
research and minimum requirement
how well
we already covered that either a which I
my my favorite just call them or email them
them
B take a look at their portal see if
they have uh something in there that
that talks about
you know minimum requirements like this
one here or
or
search a previous contract or a current
contract or a current bid just search it
ideally you'd find one that's within
your industry that way it's available
it'll be a little bit more relevant but
but
that's it honestly easiest way fastest
way shoot them an email
okay you are halfway through the
mandatory modules this is module five is
this the right buyer for you next steps
you're gonna go to our back to the
website on-demand Government Contracting
series and then click on the plus sign
and you're going to go to the next
module which is module six
capability statements the capability
statement is the one marketing piece you
are going to need as you pursue
opportunities with the government sector
either directly or as a subcontract
as a reminder if you need help if you
have something that is pressing there's
a deadline
please reach out to us we want to make
sure that we are supporting you every
step of the way so if something does
come up while you are going through
these modules
let us know and we will get you the
support right away to address that
situation and then we're going to refer
you right back
to the modules
until next time can't wait to see you
again coming up module six capability
statement until then
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