Make Purchasing Great Again

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I recently read a book called “Buy Back your Time” by Dan Martell, a Canadian entrepreneur. The book is essentially a breakdown of how to implement processes in your company (or your life) to free up time so you can focus on other things.

Other things could include additional income generating ideas, focusing on your health or spending time with your family.

The complete title of the book is: Buy Back Your Time: Get Unstuck, Reclaim Your Freedom and Build Your Empire.

In this article I want to focus on freeing up your time when it comes to procurement—that process you use to obtain or purchase goods or services for your business. And not just freeing up your time but making procurement more efficient and reliable.

Let’s first talk about some essentials when it comes to your business and procurement.

Relationships: Vendors and Distributors

Having been on the manufacturing and distribution side of the business, I can tell you there are always favours done for customers, but you have to be a good customer.

That doesn’t necessarily mean you need to buy a million dollars a month, but being a consistent customer who pays bills and doesn’t cause headaches goes a long way.

Once the relationship is established the vendors can help you out with certain parts or equipment, but more importantly wholesalers will give you certain access: access to payment terms, including discounts; bulk purchase benefits; and priority access to new products.

Understanding payment terms and the way cash flow can be used to your advantage will help you grow your business.

Why not take advantage of 30-, 60- or 90-day terms. Earn your money from your projects and pay your bills at a later date. Leverage your cash.

Inventory Management: Hold product if you can

Yes, this concept ties up your cash and may be a little counterintuitive to the previous point, but these two concepts can go hand in hand.

If you can bulk purchase and get discounts on those items then you’ll make more money per unit which ultimately increases your cash (it always comes back around to cash).

Now, if you can bulk purchase you can also invest in inventory software, and this will help you understand usage patterns, reorder points, lead times and help you restock properly.

And here’s a secret, you could likely do this better than some of the distributors out there because you’re lean and mean.

Differentiation and Competitive Edge: You’re on a whole new level

How could another company compete with you when your procurement is so efficient?

You have products readily in stock, at better pricing, and with cash on hand ready to be deployed. You’re building a foundation that will propel you to win more jobs.

Not only that, but you can use your process as a selling feature: “Hey Mrs. Homeowner, this is how I run my company. We have everything down to a science including our purchasing, so we are ready to install or service at a moment’s notice.”

Bam, job sold.

Software Solutions

Okay, so now let’s talk about software. Yes, spreadsheets are great, however I could go blind looking at tabs all day.

Besides, as I stated in the beginning, I want to make procurement more efficient and free up your time.

Before we can actually do the purchasing, we need to know what we are purchasing.

You can subscribe to mechanical estimating software like Trimble Autobid or FastEst, programs that will provide full take off and material lists for you. This software has monthly or yearly subscription rates, but it doesn’t add up to how much you need to pay yourself.

How long does it take for you to properly survey a project and upload all the pertinent information to your Excel file and then send it out for quoting? This type of software will save you days of work, money, and help you grow your business by being even more accurate with your bids.

Then we get into the actual procurement. The fun stuff, the back and forth and multiple quotes and highlighters and printed paper all over the place, and Excel sheets after Excel sheets trying to determine the best price and the most convenient locations.

And, you have to make sure that what you ordered actually comes through accurately, or that the person in charge of ordering orders the right parts or equipment.

Instead of all the headaches and the stress of analyzing quotes and paying bills on time why not use new software that is available to us.

Although not yet available in Canada, Bluon is a good example of a software company that can provide pricing and availability based on location, and you can pay right through the app.

Ply procurement is another one that can take the weight of the world off your shoulders. Not only will this solution actually purchase on your behalf, but it will provide you with a dedicated buyer to do all the leg work once you send your material list from the take off software.

They analyze your spending habits, follow your inventory levels and do much more. Neither of these are subscription based, so upfront costs are not a concern.

Now imagine that, you buy a software that does a complete take off for you with 99% accuracy. And you use a purchasing software with no monthly or up-front fee. And in the process, you’ve gained your eight hours of sleep that you need, and you’ve made your company exceptionally more efficient in purchasing and organization.

I call that a win. <>

Mathew Pottins has worked with HVAC manufacturers and suppliers for over a decade, and his passion is in growing the industry. Pottins launched Laylan Hydronics and HVAC Sales and can be reached at mathew@laylanhvac.com.