Creating Your 10K Micro-Purchase Offer

In this episode, I interviewed William Randolph , the Founder and CEO of Think Acquisition and MicroMarket.co ?about Creating Your 10K Micro-purchase offer. To be considered a micro-purchase, the contract must be under 10K. Under FAR 13.2 (micro-purchase guidelines), an authorized buyer (contracting officers and credit card holders) is allowed to purchase from you without competition as long as the price is reasonable. This doesn't mean that buyers are just going to throw money at you if your product or service is under 10K. Getting these contracts often requires three things: 1. Relationships with the buyer, 2. An understanding of their needs and challenges, and 3. A well-defined product/service offering.

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Read Transcript Here:

Mike: [00:00:00] Hey everybody. Welcome to another episode of Game Changers for Government Contractors. I'm excited about this episode for a couple of reasons. One, I've got William Randolph on here with me today, and we haven't done a podcast together. And two, we're talking about a topic I've never talked about on the podcast. So that's always awesome. We'll be talking about micro purchases here in a little bit. But before we do that, William, why don't you take a second and tell everybody a little bit about who you are and what you do.

William: Thank you. I really appreciate it, Michael. Again, the name is William Randolph. I'm a retired government contracting officer. That's what I did for 26 years. And in 2019, I started my own company, Think Acquisition. We're a training and development company, just as the name suggests, in the training and development space in acquisition, contracts, program management, and the leadership space.

Mike: You guys started right before the world kind of shut down.

William: I knew what Zoom was before Zoom got popular.

Mike: Isn't it so wild? People had no idea what it was. And then like two months later, they were like, everything's got to be in Zoom.

William: You know, it becomes a verb.

Mike: [00:01:00] Yeah. Yeah. It became a verb. It was so wild.

You went from the dark side of government contracting to the darker side. A little bit like our journey a little bit.

I was talking to you a couple of weeks ago and you mentioned the micro purchase concept. It's something that a lot of people know about. And man, I probably get questions about this 10 times a week. I'm excited to talk about it today. Tell me a little bit about how you decided to create the system that you did. You had a little bit of a story on looking back and everything. Why don't you tell everybody a little bit about what encouraged you to kind of do more in the micro purchase world.

William: It was two things. When I started the company in 2019, I promised my wife, I said, give me 12 months. And then if not, I'm going back to consulting. I looked at the system. I looked at the 26 years of contracting experience and said, how do I hack the system for speed? I was looking for one thing primarily, and that was speed. And the strategy that came up was micro purchasing because it is a highly effective and efficient [00:02:00] contracting strategy. You can actually be talking to somebody about a requirement in the morning and in the afternoon, technically be on contract by a contract swipe. So that was the 1st thing I said: I'm going to dive into micro purchases.

Turn the calendar a couple of years and I look back on what we did in the half of 2019 when I started the company. And 2020 was smack dab in the middle of the pandemic. We had done $281,000 worth of micro purchases in half a year of 19, started the company in July of 19, and all of 2020. $280,000 worth of micro purchases. So when I did that, I was like, wow, how do I scale? That has to be something that's scalable. Because when you think about the time and energy, in the government contracting space in the business development component, it's all about energy is like, how much ROI can you get for one block of energy? Of business development energy. So when I looked at that, I was like, wow, those are really low blocks of business development [00:03:00] energy, but it had outsized return. So I started doubling down on micro purchases.

Mike: As we get into this, you mentioned how you can be talking to somebody in the morning, have a contract in the afternoon. That is completely real. But I think a lot of people don't understand the work that goes into, or the prep that even goes into positioning that.

Last time you and I were talking, one of the things I was saying is how there's a bunch of people on TikTok and YouTube making it sound like this is the kind of thing where I'm working at Walmart full time and in the evening, I can make two, three, four calls and have $25,000-75,000 worth of government contracts in the evenings on the weekend, that sort of thing with little to no effort.

And I want to help those people that are going to be tuning in to understand that it doesn't work like that. While it is easy, it doesn't work like that. So maybe you could kind of walk through process of going about this to help folks that are like, Hey, I'm just going to dive in on the weekends and I'm just going to make a small fortune.

William: Yeah. Michael, [00:04:00] that's a very valid point. I think there's three things that are necessary for an effective micro purchase to happen. Number one, you have to have a relationship. You have to know, you have to have a connection. At least that's been my experience is that you have to know the client. That's number one.

Mike: You can't cold call them and get it.

William: You just can't cold call them and get it because here's the second piece. You have to know what their needs are. Because there's a secondary piece of: while it's small dollar values block, it's a block of value and a small dollar value, the government just doesn't buy things because they're bored. They buy things because there's a need. So you have to have the relationship in order to know what the needs are. That's the second piece.

And then the third piece is you've got to have something of value that satisfies the need. So those are the three pieces of it when I think about it. And that's why, while I think I had some level of success in the beginning, in order to scale it, it's more relationships. It's more connections. You have to let people know what you do, how you do [00:05:00] it, and how you can provide value to match the needs that they have. You can't help create needs for them. The needs already exist, but you have to know that they exist.

Narrator: If you're struggling with your government contracting business, I want to encourage you today to go sign up for a free coaching session with me. You can go in the description of this podcast. There's a link to my calendar. You can go pick a time where we can sit down for 30 minutes to talk about what you're doing right, what you're doing wrong, what you should change. And then if coaching makes sense for you, I'll actually go over the options on how you can get started with coaching so we can take your business to the next level.

Now let's get back into this episode.

Mike: I like how you said that on number two about they don't just buy stuff because they're bored. It's like people just think, well, they're just sitting around just trying to spend money. They're just bored out of their minds.

I want to talk specifically how you make the micro purchase work and all that. But to your point of, even like number one, how did you find that you went about building the relationship? How long do you think that takes, [00:06:00] Is there some research involved in your style of doing it to make this successful? What do you go about in your, maybe there's two or three tips on, building that relationship?

William: I think the first tip is knowing thyself. What do you bring to the marketplace and that you're good at that has some value? That's number one. And then taking that know thyself, knowing that value and then mapping it to the large demand that is government contracting. $692 billion was last year's number. Okay, from $692 billion worth of spend, but to find these small pieces of value, you have to be able to look and find organizations, look and find individuals and then organizations that have that need.

And again, as I mentioned earlier, we stick to our knitting from a standpoint of the training that we do. So I know my client set is contracting offices, program offices, and acquisition professionals. So [00:07:00] whenever I meet one of those three individuals, I'm having a conversation about my experiences, our company's capability, and then what could be their training needs?

That's always a question. What could be your training? What could you move the needle on? And you'd be surprised that people have pains all over that atmosphere. But I don't ask questions about IT training. I don't ask questions about law enforcement training. That's not in my wheelhouse. So I stick to my knitting and I'm hyper focused.

And if I can find the right customer to talk to, or I can find the right individual to talk to, I have a greater chance of turning them into a customer.

Mike: I like that because again, I think part of this episode, just because the demand is so high on social media right now, I think part of this episode is dispelling some of the myths. And one of the really popular things that I see the advice being given online, you just kind of hammered through that one, is the advice is just go see what the government's buying and sell it to them. And I'm like, but if you don't [00:08:00] know about IT or janitorial or whatever, how can you intelligently sell that? How are you going to source it?

One of my first phone calls when I started working with Josh, I get this phone call from this guy who's frantic. He's like, Mike, I just won a $65,000 contract and I don't know what to do about it. And I was like, Okay, tell me more. He's like, it's for toilet paper. I was like, so what's the problem? He was like, not going to repeat what he said, but I don't know **** about toilet paper. Right. I was like, why did you bid on toilet paper? And he was like, cause I saw it online. And I went to Sam's. He went to Sam's website, like not SAM.gov , like Sam's and Walmart. ?He went to Sam's and saw the wholesale price of toilet paper and quoted a little bit under that. And now he's on the hook for it. And I was like, well, what is your business? What do you do? And he's like, well, by trade, I'm in IT and cybersecurity and all that. But I saw this and I thought that'd be a good foot in the door. And I won. And I’m like, you won because you quoted a [00:09:00] ridiculous price, right? You need to call those people and tell them you can't accept the contract.

William: Absolutely.

Mike: He was trying to figure out how to source like $65,000 in toilet paper to the Air Force or whatever. I see that a lot. So, I'm glad to hear your perspective on it.

From the micro purchase threshold: if I go and I understand who I am, I start building a relationship, I find out what their pain points are. How do you tee up that pitch to do that? And what dollar thresholds do you find to be the sweet spot?

William: I think there's a couple of things. We call them $10,000 offerings. These are offers that are at or below the micro purchase threshold. And I think those can be described in just about any fashion. There's a range of things. And when I talk to people about $10,000 offers, there's a range of offerings that could look like. One of the things that I do is, my go-to is the pilot course. Let us build you a pilot course for some specific issue. This organization, this individual has some specific pain point. Let us build a pilot course for 10 people for [00:10:00] $7,500, and we're going to come bring and deliver that value. That's one of the go-to's for me. But I think they can be ranged and scaled.

One of the other ones that I do is the one hour lunch and learn. This was very effective during the pandemic. The people wanted things to do to get their people together online. So all I do is, I just look at the environment. And look at the required and the likely needs and I start creating things. The lunch and learn was an amazing one. $995, that's what they started with. $995 for one hour lunch and learn.

And the value proposition, Michael, I always try to stress people that the current delivery is valuable, but the real value is getting inside the organization where you can ask more questions. That's the value you've been invited. You've actually been paid to come into the organization and ask more questions. And if you ask more questions, guess what? They'll tell you where it hurts. And then the cycle starts going again.

If I know where it hurts, [00:11:00] I can build other offerings to address where it hurts. I'd use that offering to find out where else the pain is. And then I build more offerings to address those pains. So there are strategies and tactics in this space, assessments, data analysis, requirements, maturity, all types of strategies that you can use to, once you hear and you've got to have your radar up. I call my ears my radar. You’ve got to have your radar up listening for where the pain is. Because if you have a conversation, you have an opportunity to build rapport with someone: they'll tell you. And I don't even mind asking, so where does it hurt? What's going on. So that's my strategy. That's always my strategy.

Mike: That's good. ?I think a lot of people, and this is a different mindset, right? Where some people come into this business thinking about themselves and they think about, Hey, I'm trying to replace my job. And I'm like, so you're going to replace your job with another job where you're basically the lunatic boss breathing down yourself, right? You've replaced one lunatic for [00:12:00] another, because you're like, Hey, now I don't have health insurance. Now I don't have all this. I'm just replacing that income, just doing the micro purchases. I'm just going to do the thousand, the 5,000, the 9,000 occasionally here.

They don't think about building a company on that and saying, look, the micro purchase is a way to open the door. It's a way to have a conversation. It's a way to deliver, make them excited so they want to buy something. And next time it's a $50,000, it's a hundred thousand. It's a million dollars, that sort of thing. It's a gateway to other things. It's not the end-all-be-all.

Again, you're coming in this and you just want to replace your job. It's a lot of work at a thousand, 5,000, 10,000. Right. And it is a one person thing. But if you're trying to build a company, you're going to use it as a tool, not as the end-all-be-all is how I look at it.

One of the things that I found that people don't seem to understand is how flexible training budgets are. You're kind of alluding to that with the lunch and learns and the assessments and the different trainings [00:13:00] and things that your team has done. I've found at the end of the year, maybe you found this as well being a contracting officer, there's always a $50,000 training budget. I don't know why that's the number, but there's a $50,000 training budget that they have forgotten about because they're trying to allot this seven or eight figure deal.

And you call up and go, Hey, you had a $50,000 training budget. And they’re like, as a matter of fact, I do. Boom: you can have a $50,000 contract due in training. Hey, we're going to build the website, then we're going to incorporate the training into it. Then we're going to train your team. There's all kinds of things in that training budget when you start to have those conversations with folks. And sometimes it's people you've been talking to and now you're reengaging with that training piece. I like using the micro purchase stuff for engaging initially, having those conversations.

Any other pitfalls that you would say that people should avoid when they're thinking or talking micro purchase with contracting officers?

William: I think there's probably two pitfalls. Let me switch up: two things I wish people [00:14:00] would consider more. Let me say it that way.

Number one is, ensuring that your micro purchase offerings have connective tissue. This is to your point of having a strategy. This is a growth and business development strategy. If you have an offering, make sure that offering has connective tissue to the next higher thing. So if there's a 10,000 offer, make sure that that 10,000 offering is also in the 50,000, in the 100,000 ones. Because if you go in to the organization and you wow the crowd, you knocked the socks off and they want the next thing. They're not going to go out and change horses. You've just demonstrated that you can wow the crowd. What's the logical next level progression is the next thing. And if it has connective tissue to the next thing. So maybe that's one course. And now you want to do a suite of courses. Or you do a half day off site. Now you want to do a one week off site. It has [00:15:00] connective tissue. So all of those offerings, those initial $10,000 offers have connective tissue to the larger thing.

And then the second thing that I wish people would consider, would realize, is that the value of micro purchases is truly in the past performance. One of the things that we talk about in the government contracting space is how do you develop relevant and recent past performance? A 10,000 offer passes both of those tests for something larger. When you see people's capability statements and you have all those logos on the capability statement showing social proof, no one ever asks you about, oh, so tell me about that third logo, what was the size of that contract? No one ever asked you that question. What you now have is social proof that you have worked with that agency. A 10,000 offer will do that, satisfies that requirement.

So, the connective tissue, and I see people miss it all the time. They do something ad hoc, [00:16:00] and it has no connective tissue. Oh, so what's the next thing? There's no next thing. And then realizing that these past performances work in terms of past performance.

Mike: I like that a lot. That connective tissue that, that'll resonate with a lot of folks really well. Because I do see folks where, they've sold their highest thing. Like, I don't have anything after the 10 grand. Like the solopreneur who's like, well, that was the biggest thing. And I shot my shot one and now I don't know what to do. And they're hungry for more. They're not going to buy 10 of the 10,000 offer. They want something else. Now you've got to figure out what do we do?

I don't think people realize how, when you're dabbling in that under 10K range and that's, you know, just a credit card swipe. When you go above that 10K range, you're still under simplified acquisition up to 200K. So it's still really, really easy for them to buy from you. There's a little bit more involved. But it's still very easy. It's just not a credit card swipe in that case.

William: The odds are in your favor. That's what I'm saying. It's a competitive environment. It's a friendly environment. The next level up is still a friendly environment.

Mike: Yeah. [00:17:00] So in your mind, is it easier to sell services like this or is it just as easy to sell products like this?

William: Oh, I think it's even more, it's much easier to sell products.

Mike: So talk to me about that. Because everything you said about the service side makes total sense to me. We're in the service business, but we're not in the product business. Talk to me about a product company who sells. And I don't know, maybe you've got some examples product companies and how they position that.

William: Sure. So the largest credit card users, largest department is the Department of Veterans Affairs. 60 percent of their spend is on the credit card. And you can go look in the data. This is a smart GSA, smart pay data. I've been mining the data. 60 percent of that spend in the Department of Veterans Affairs. Over a billion dollars a year is in products. These are medical products, medical instruments, medical supplies. You’d be surprised how much gauze and Q tips and gloves are bought on the purchase card, 10,000 at a time. Now I [00:18:00] probably should take gloves out. Because post pandemic, That's a big commodity. Now they're buying hundreds of millions of dollars worth of gloves.

But there are lots of medical devices and hospital beds and bed pans and things of that nature where there are online catalogs to handle all of those types of product buys, spare parts. DLA does a lot of spare part buying. They buy in mass, big truckloads of spare parts. But the individual shop, individual office, or a fleet logistics center somewhere in the country somewhere, they buy them 20, 30, 40 at a time. And they use the credit card to do those types of logistical product buying. We call it supplies, supplies buying.

Mike: Do you have thoughts on how to target that or how to look for those particular buyers? Because those purchases like that, and again, this is just me being na?ve, I guess, asking the question around it. When I'm looking at it, when I'm looking at some of the bigger [00:19:00] stuff, you'll see that, Hey, there's a million dollar contract here. There's a 5 million contract here. There's a contract vehicle over here that people are using to buy that. But this is stuff where, hey, yeah, we have our traditional supply that's coming from DLA or our traditional supply that's coming from a contract vehicle or even a direct award. Sure. But we have a one-off need. And I think the one-off need, that one-off need could be 10. But we have a one-off need and that's probably not going to show up on a forecast or anything like that. It's just going to pop up. So how do I, as the contractor, target that so I can go after those folks.

William: There's probably two ways. My instincts suggest that there are two ways.

One, you're absolutely right. You can't go into FPDS&G or USASpending and track a 9,800 purchase or a credit card buy. However, you can look at the spend of an agency. And I think that depending on the size and the mission of the agency, you [00:20:00] can draw some conclusions. That's number one.

And then number two is, I go back to what I said was primary value proposition in micro purchases is the relationship. If you have a relationship, you'll be surprised people will call you. Once you've demonstrated that you play in this space, you know the environment, you know the people, you know the mission, and you can be trusted to deliver outsized value in small chunks. They'll just call you when they have a pain. When they wake up, I always call requirements headaches, when they wake up with a headache. It's like, oh, I know who to call. It almost is just that simple.

So it's mapping your contracting offices or your mission offices. Here's one, for example. We're doing some work right now with the Federal Energy Regulatory Commission. You can look in the data, you can look at USASpending, and it shows they do about 120 million worth of spend a year. Even in the Federal Energy Regulatory Commission, there is a [00:21:00] sliver of micro purchasing that happens in that organization. So what I'm doing is we're building the relationships through training. We're doing some training for them. We're building some relationships.

And then while we're in there, here's a nugget for those that may be trying to consider training, always have the 20 minute Q&A at the end. So what else is bothering you? It's like, man, this thing over here is just eating our lunch.

Oh, really? Okay. So then we go back in the lab and we build something to address the thing that Jay just said is eating their lunch. It's like, man, if we had a better solution for this, this would be amazing. Ah, noted. So we go in the lab and we go build something for that. And we bring them a pilot. We bring them a pilot. Here's a strategy. Let's test this one time and see if it works for 5. And then if it works, we've got the connective tissue and now we've got the 55,000 and then hopefully the 555,000 would come.

So it's a strategy of doing your homework. This is back to, Michael, it's a people business. ?Meeting the people and doing your homework [00:22:00] and then drawing some conclusions based on what you find.

Mike: People, man, they struggle to do the homework. I always get these emails or it's a phone call and they'll say, Mike, what is the fastest? And I'm like, look, let me just stop you. Let me just stop you right there. You don't have to finish the sentence because I can tell you're going to say, what's the fastest way to win this contract? What's the fastest way? What's the fastest? And it's like, those are the people that you talk to. And then two or three years later, they're like, I'm still trying to figure it out. And I'm like, because there's not a fastest way.

William: There's no fastest.

Mike: There's no silver bullets. Right. It's just one of those things where occasionally, you're going to pick up the phone and talk to somebody and they're going to be like, Oh my gosh, I've been waiting for you and it's going to just drop in your lap. But that's not how like 95 percent or 99 percent of everything you're going to do. It's just not how it's going to happen. And that's where I'm like, it just takes time. My saying here is “overnight success takes about 10 years”. Superstar success takes probably 20 years. Because it just takes so much time to build trust with the [00:23:00] people you're trying to work with and establish yourself.

And the volume of activity you have to do is the other thing. People think, well, I can make a list of 20 contracting officers and at least 10 or 12 of them are going to buy from me. Like, not how it works, man.

William: Michael, got a point to share with you on that. We did an analysis of our business. We have been in business four years. So 48 months, it was 48 months in this past July. We did a month over month look at our revenue span. And what was surprising to us that we had this significant spike in month 30. Okay, month 30.

I'm a data guy. Let's go mine the data. See what the data says. Nothing more happened other than the relationships that we were building in months one or zero through like 29. They started coming back. Instead of doing one-offs, the one-offs continued, but then the folks that we have been doing business with started coming back. And they started referring. It takes time. It takes time.

Nothing in our outbound effort [00:24:00] changed, but the return on the initial outbound effort started reaping rewards. And then those same folks started referring us. We were looking at, so where did this lead come from? Oh, one of our previous clients referred them to us.

Mike: I really appreciate you sharing that because that's a number that a lot of people need to hear. 30 months. That's when the spike happened in your business. I think that's really important. A lot of times we talk about a tipping point. There's this tipping point that just happens where everything is kind of come together and just all of a sudden, boom, it just takes off. I've experienced that in different social medias. I've experienced that in the business and on the podcast and all kinds of places where all of a sudden there's a spike. It's wild. You cannot predict what is going to cause it, when it's going to happen. You just know if you keep working and keep doing the things you're doing, at some point, it will happen.

William: You increase the odds of the spike.

Mike: Yeah, you increase the odds. You know, there's some people that'll work a decade before they see that spike. That's why when people ask me, well when, and I'm like, I can't tell you when. I don't know how much of the stuff I tell you you're going to do. I don't [00:25:00] know if you're going to do it right. I don't know if you're a fast learner or slow learner. There's so many variables.

But I can tell you if you do these things and you do them consistently, you're going to see results. And then you can use those results to do other things.

Is there anything we missed that you want to leave people with today on micro purchases?

William: I would just encourage, especially the new government contractor that's launching, to think about micro purchases as a business development tool, just as a launching place to get in front of people and to get in front of agencies. Have a value proposition and then offer that value proposition with connective tissue to something larger.

And then the 2nd is if there's a government contractor that's a little more mature, but still wants to open new markets or connect with new agencies. There is no better and more effective and more efficient way than to frame, build, and craft micro purchase offerings to get them in front of government agencies. So they can utilize an expeditious contracting strategy, low risk because of the [00:26:00] dollars. And then you go in and you wow the crowd.

Mike: That's perfect. Hey, before we get out of here, give me 60 seconds on the new website you're developing around this. Cause I want people to hear about this.

William: Thank you very much, Michael. When we thought about scaling this, scaling micro purchases for ourselves, that the answer we came to is we have to go online. We have to build a storefront if you will, for all of our micro purchases so that we can get them in front of people and have opportunities to wow the crowd while we were building it.

So we did it. And we started building and then we realized, well, well, well. If we can build it for us, we can build it for everyone. So we are in the last stages of building what we're calling micromarket.co , which is basically a two-sided marketplace for micro purchase services. We're not going to try to tackle the products. We're just going to focus exclusively on the services.

Because today there's no one place to go for micro purchases in the services space: think consulting, training, data [00:27:00] analysis, subject matter experts, speakers, coaches, things of that nature. These are the types of categories that fall into the micro purchases inside of government per the data.

So we've built it. We've got 12 categories of micro purchases that we're offering up and we're going to be offering from now until the end of the calendar year. So from now until December, we're going to be inviting people to come on and build a platform, build a storefront, and offer your micro purchases to the federal government.

Mike: And URL one more time,

William: Micromarket.co - Micromarket.co .

Mike: Go check that out. I'll make sure this podcast gets out before the end of the year so we can hear all that.

Thank you again for coming on. This has been great. You and I could talk for hours about stuff. I think we think very similar. I appreciate you, man.

Narrator: I really hope you enjoyed the podcast today. If you did, I would really appreciate it if you would like and subscribe to the podcast and screenshot it and tag me on LinkedIn or whatever social media you use. So thank you again for joining us today and we'll see you next [00:28:00] time.