Whether you prefer residential, commercial, or government construction projects, you can’t turn a profit unless you find high-quality bids and submit winning proposals. Bidding is as much an art as a science in the construction industry, but you can put these seven tips to use as you seek bids in your sector.
1. Dedicate Profits to Your Marketing Fund
Businesses must invest in themselves if they want to succeed. Dedicating a portion of your profits each quarter to your marketing fund ensures you spread your brand message far and wide. When more people hear about your business, they’ll call you for a bid.
2. Consider Electronic or Digital Bidding
Electronic bidding has risen in popularity over the last several years. You can submit more bids if you process them electronically, and you might reach an untapped market that other construction companies in your geographical area haven’t considered.
3. Ask Customers for Referrals
Past and existing customers offer an excellent starting point for new bids. Unfortunately, most consumers won’t spread your message unless you specifically ask for it; they don’t think to tell their friends and neighbors about your excellent job on their homes.
When you meet with your customers for the final follow-up or walk-through, tell them you would appreciate referrals. Hand them several business cards so they can give them to acquaintances (and so they don’t have to remember your number).
4. Purchase Construction Bid Software
If you want to compete in the construction industry, you need the latest technology. A license for construction bid software and an experienced estimator can make a tremendous difference in your bidding success.
Capterra, a trustworthy business software ranking website, offers a list of well-rated construction bid software programs. Choose one with an intuitive user interface. If you already employ an estimator, ask for his or her input before you purchase any software program.
5. Don’t Submit the Lowest Feasible Tender
When you haven’t won a successful bid in a long time, you might be tempted to underbid. Submitting the lowest feasible tender might win you the job, but you’ll also lose money on the deal, which harms your business.
Additionally, smart consumers know how to recognize an impractical bid. They’ll know that increased costs wait around the corner and they’ll worry that you won’t finish the job. Respect the people for whom you submit bids and submit reasonable tenders that reflect the job’s scope.
6. Include Your Overhead on Bids
Along those same lines, remember to include your overhead in bids. If you lose money on several jobs in a row, your business will become insolvent, which spells doom for any construction professional. Consider costs like fuel, payroll, machinery, and supplies before you submit a final tender.
7. Develop Your Specialty or Niche
You’ll find construction bids more easily if you align your prospects with your business’s niche. While it might seem more profitable to cast a wide net and become a Jack of all trades, niche specialization actually creates a competitive advantage. Prospects will see you as a specialist, and therefore more qualified to complete jobs within that niche, so it will become easier to land the desired contract.
Finding construction bids takes time and practice. As your business grows, you’ll win proposals more easily. Keep up with your continuing education and maintain your credentials so you can find construction bids more effectively.