65. Demystifying the Role of a Procurement Professional: What Cleaning Business Owners Need to Know

Matt Harris

Nov 09, 2023

If you’re looking to win high value cleaning contracts, at some stage you’re going to deal with procurement.

Procurement is a department, like finance, sales or marketing.

Procurement professionals buy goods and services to create most value at the lowest risk for their business.

They run RFPs (Requests for Proposals), vet vendors, negotiate contracts and review KPIs during delivery.

As a business owner, you need to know about the role of procurement in awarding cleaning contracts.

In today’s email:

Businesses with procurement departments
Procurement roles you need to know
Direct + Indirect procurement

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THE BIG IDEA

Businesses with procurement departments

Broadly speaking, there are 7 types of businesses that have procurement departments:

Large Corporations: Businesses that deal with a wide range of goods and services usually have a dedicated procurement department.
This is due to the scale + complexity of their procurement activities.

Est. Average Annual Rev: £500m - £1B+
Est. Headcount: 5,000+ employees
Est. Cleaning Contract Value: £250,000 - £1m+
Medium Sized Businesses: Businesses with a lot of purchasing activities will have a procurement department.
The size and structure of the department will vary based on the industry and needs of the business.
Est. Average Annual Rev: £25m - £500m
Est. Headcount: 250+ employees
Est. Cleaning Contract Value: £25,000 - £200,000+
Government Organisations: Government entities at various levels have dedicated procurement departments.
They handle the public procurement processes, manage bidding and contract awards.
Est. Average Annual Rev: Varies based on National, Federal, State or Local Govt budget
Est. Headcount: Varies based on National, Federal, State or Local Govt
Est. Cleaning Contract Value: Depends on size and scope of facility and budgetary constraints.
Educational Institutions: Educational institutions include universities, colleges, and schools.
Procurement buys facilities management and other services required.

Est. Average Annual Rev: Varies. Universities generate millions in revenue. Schools and colleges have smaller budgets
Est. Headcount: Varies. Universities can have hundreds of employees. Schools and colleges may have less than 100
Est. Cleaning Contract Value: £10,000 to £250,000+
Healthcare Organisations: Healthcare providers and hospitals have dedicated procurement departments.
They negotiate contracts with suppliers and check supply chain efficiency.
Est. Average Annual Rev: Depends on size, specialisation and patient volume.
Est. Headcount: Several hundred to 1000+ employees.
Est. Cleaning Contract Value: £200,000 to £1m+
Manufacturing Companies: Manufacturing businesses have complex supply chains maintained by a procurement department.
They work closely with suppliers on a range of matters including service delivery, quality and standards.

Est. Average Annual Rev: £10m to £1B+
Est. Headcount: 10 to 1000+ employees
Est. Cleaning Contract Value: £25,000 to £250,000+
Service Organisations: Service-oriented businesses, like consulting firms, hotels and IT providers have procurement departments.
They deal with vendor selection, contract negotiations, and managing supplier relationships.

Est. Average Annual Rev: £5m to £500m+
Est. Headcount: Varies depending on scale and complexity the business
Est. Cleaning Contract Value: £10,000 to £250,000+
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Procurement roles you need to know

The most common roles in a procurement department are:

CPO: Chief Procurement Officer. This is the head of the department and the key decision maker in the process for appointing new vendors.
Category Leads/Category Managers: These people run big categoris of spend. For example, IT, Marketing, HR and Soft Services (cleaning, waste, maintenance). Category Leads/Managers are key influencers in the decision making process to appoint new vendors.
Sourcing Specialists/Buyers: They focus on categories that need specialist knowledge. Buyers run the RFP process and negotiate with suppliers. These are the influencers that you'll deal with first in the procurement process.
Procurement Administration: Look after purchase orders, matching issues and supplier queries. They make sure you get paid for your work.

Direct + Indirect Procurement

Procurement departments are split into direct and indirect procurement.

Direct procurement focuses on goods and services that impact the final product or service sold by the business.

They deal with the raw materials and other components a business needs to manufacture products or delier services.

For direct procurement professionals, every penny counts. Their decisions impact revenue and gross profit.

Indirect procurement buys goods and services that support the day to day operation of a business.

This includes office supplies, facilities management and IT services.

For cleaning contract opportunities, you need to reach out to indirect procurement departments. Roles to look out for are Indirect Category Managers and Buyers (Soft Services).

As you start bidding on higher value contracts, it’s important to be aware of the role procurement plays in the process.

It helps with developing your Ideal Client Profile. You identify the Key Decision Makers and Influencers involved in the buying cycle.

And who you need to start prospecting.

In this week’s episode of The Growth Lab podcast, Ashley Myhill from Myhill Marketing explains how to use PPC and SEO to generate leads for your cleaning business. Listen here.
Prefer watching over listening? Check out The Growth Lab podcast on YouTube.

Need More Help?

Want to 3x revenue growth for your cleaning business in the next 12 months? Book a call.
Email me with the growth strategy for your cleaning business. The more details you provide, the more personal I can make my response.
Join The Cleaning + Property Maintenance Support Group on Facebook and gain access to support, accountability and networking opportunities to grow your business: https://www.facebook.com/groups/1279455169412140/?ref=share

Thanks for reading!

Matt @ The Growth Lab

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