In this tough construction environment, there is a temptation to bid on whatever jobs may be out there to keep crews and equipment busy. But while this can keep workers employed short term, what about down the road? How long can any company survive without making a profit — or worse, while carrying losses on one or more jobs?
If this hits a little too close to home, I suggest reading “Use Your Bid as Bait to Win More Construction Projects”, found in the Your Business section of ForConstructionPros.com. In this insightful piece, George Hedley, a former general contractor turned industry consultant, likens bidding to going fishing. “When you fish, your goal is to catch the big one. So you set out to find an abundant fishing hole and cast out your bait,” he writes. “When looking for great companies to bid to, or profitable projects to bid on, you also seek out opportunities that will give you the best chance to make the most money.”
In a nutshell, he advises:
• Don’t waste time and money bidding on projects that offer no hope of ROI.
• Pick the jobs you want to work and work them hard.
• Never bid jobs you won’t get no matter how low you bid.
• Never bid jobs you know you can’t get — in other words, jobs that you know aren’t right for your company.
• Never bid jobs without meeting the decision maker first.
He goes on to suggest viewing your bid as “bait” to secure a face-to-face meeting. Admittedly, this is easier said than done, so he proposes such tactics as excluding bid items that require discussion; specifying enticing alternatives; offering lower price value engineering concepts; asking questions that require clarification; offering ways to improve the schedule; exploiting relationships where possible; or just dropping in and waiting in the lobby until the customer will see you — whatever it takes to get your foot in the door.
Once inside, it obviously takes more than a winning smile to secure the contract. “Today you must do more and offer something different than your competitors to win profitable contracts,” Hedley indicates in the article “Win More Work Against Low Price Competition”. “You need to change, improve, and upgrade your estimating systems, bidding strategies, proposal format, presentation methods, customer contacts, marketing plan, and sales tactics to be successful.”
He acknowledges the need for low-bid status on public works projects. This is where best practices to increase efficiency and reduce construction costs come into play. Tight management, a well-trained crew, proper planning and close supervision of suppliers and subs are essential.
On private work or public works projects that factor in performance, even more effort is required. “You’ve got to give customers a differentiating reason to hire your company,” Hedley states. “It’s not just about price, inclusions, and exclusions... You now have to be in both the construction and sales business!” This means tailoring services to give customers “specifically what they want on each job you’re bidding.”
This starts by identifying the services/benefits you can (or do) offer to differentiate your company from your competitors. Before your next bid, ask yourself: Is your company better or faster? Does it have more qualified, trained people? Can it help your customer make more money? “Think about how you can help your customer meet their goals, build a better project, or reduce risk while working with your company,” Hedley emphasizes. “If you want to win jobs today, you must do more than the minimum.”
To read Hedley’s complete articles, or for other tips on business survival and growth, check out the Your Business section at ForConstructionPros.com.