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By James Nielsen, esq., cpa, ceo, creditsuppliers
February 27, 2017
We all know the basics of bidding on a job: submit the most accurate estimate that delivers the best quality work at the lowest cost. When it comes time to bid on one of your dream jobs, it might be tough to figure out where to start. There is not one right way to bid on a job, but here are a few tips from a successful contractor who bids on, and wins, large flooring jobs across the country.
Want to nail the bid for that big project? Get your foot in the door by completing smaller projects in the same vertical. Having that kind of experience under your belt will help you learn the ins and outs of that type of project so you can transition to larger ones with relative ease. Most importantly, you’ll build a network of references that will give you a leg up when it comes time to submit your bid.
When you submit your bid, you’ll likely have to provide a payment and performance bond that covers the cost of your project. Bond companies often charge low interest rates—sometimes 2.5% of the bond or less per job––so they’ll comb through your financials and your project history to ensure your company is financially stable and that you have experience with the type of project you’re bidding on.
Once you build strong credibility in your specific vertical, you may become so well known that you don’t have to bond your projects—but that comes with years of experience and time spent building relationships with the right people.
Some companies use software and others use Excel templates to create project estimates. The format you choose ultimately depends on what works best for your team.
When you build out an initial estimate, include only what was asked for—now is not the time to inundate the estimate with recommendations that will increase the proposed cost. That’s actually one of the worst things you can do! Include recommendations in the appendix of your bid and hash them out after the initial interview or after you’ve won the bid.
This is one of the biggest mistakes contractors make. When salespeople control bidding and estimating, the bid may not be priced correctly due to a salesperson’s differing outlook on the project. Engineers are closer to the day-to-day operations of a project and likely have working knowledge of what it takes to see a project through to completion.
We all know that construction isn’t forgiving when things go wrong. Take the time to craft a thorough bid that accounts for any and every possible roadblock you may encounter, invest in the correct amount of labor to keep the project moving, and make sure you’ve got the finances to cover those costs.
Bidding on your biggest project to date shouldn’t be a daunting task. If you have the right experience under your belt and approach your estimates strategically, you’ll land big jobs with ease.
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