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Contractors often have a habit of bidding on projects at the lowest price possible. However, as the bidding process grows more complicated, it’s critical to understand how to win construction bid contracts and increase your bid-hit ratio while being profitable.
Low bidding is not the same as competitive bidding. Increasing your bidding volume without altering your strategy is a waste of time and money. The techniques below can help you win more construction bids with fewer proposals.
Stepping in before your competitors do is a simple method to receive more building bids. According to CEM, it is important to keep an eye out for construction bidding marketplaces to build a profile and find jobs ahead of time.
BidClerk – This website offers commercial building project leads and information.
iSqFt– An online networking application, iSqFt was created specifically to assist construction professionals in connecting and communicating.
BidPlanroom — This website allows commercial construction professionals to join a bidder’s list, publish projects, and market their business. (It’s completely free!)
Knowing your competition and what they plan to offer in the bid and planning ahead can help you bring more to the table with your offers. As a contractor, your offer should be about more than simply the price, but what value add you can bring to the project as a whole. Realistically, you must persuade the owners of the project that your bid is superior to your competition.
It’s not necessary to take a construction job just because it’s offered. You’re better off spending the time to properly construct a proposal for 5 projects that you’re qualified for rather than 20 that you’re not.
In the long term, reducing the number of bids you submit and enhancing the quality of the ones you do, may be more successful.
Use these guidelines to pick initiatives that have a better likelihood of succeeding:
When business is good, it is easy to get ahead of yourself. However, if you had a successful year, you should think about the company’s future. There are several ways to spend a windfall, but the construction industry is cyclical in nature. Avoid utilizing operating cash or equity to participate in “opportunistic projects” like real estate development. Save money during good times so you won’t have to accept reduced margins on work during a bad building cycle.
If you do have an investment idea in mind, chat with your surety and seek their opinion before you go ahead and invest to have a clear understanding of your available bond line of credit.
Contractors frequently squander time by collaborating with persons who have little voice in the ultimate decision.
Find out who the project’s main decision-makers are so you know who to prioritize. Gaining knowledge of the prospect’s organizational structure is a smart place to start.
After you’ve identified the decision-makers, strive to spend as much time as possible with them. Most people want to conduct business with people they can trust, and they won’t be able to trust you if they don’t know who you are. Developing personal ties with your prospects allows them to perceive you as a person rather than just another contractor.
When preparing your proposal, don’t be scared to brag about your credentials. Explain why your team is the best fit for the work in a simple manner.
Putting your experience on display is a terrific approach to differentiate yourself from the competition. A solid reputation may be all it takes to tip the scales in your favor when your bid is close to that of another. Also, instead of focusing just on pricing, emphasize your worth. It’s a race to the bottom if you compete just on price.
Sharing your unique worth is the most effective method to set yourself apart from the competition. Promote your team as flexible professionals who can provide customization, quality assurance, and outstanding client service.
It’s critical to understand what project owners demand before submitting a bid. This is particularly true when it comes to design details.
Talking to those who have worked with the project owners to gain a sense of their preferences is a useful strategy.
Don’t just present a lump sum in your offer. Break down the expenditures in areas like equipment allocation and material prices to better illustrate your thought process. It’s all about putting a prospective customer in the appropriate frame of mind. Prospects also want to know the ROI they’ll get when choosing to work with you over one of your competitors. Case studies and factual information can help sell your proposal that much more.
You can save labor expenses and complete projects faster by increasing productivity. Both of these elements increase the value of your proposal to project owners. You can also complete more jobs if you accomplish tasks faster, while always following code and providing high-quality work. Cutting corners to complete jobs quicker is never the right answer.
While improving your bid-hit ratio is certainly important, merely increasing the number of projects you can bid on can help you acquire more construction bids.
There are several strategies to increase construction productivity, including:
Here are some construction-related smartphone apps you should be aware of to help with these initiatives:
Fieldlens– This aids communication between a general contractor, subcontractor, architect, and owner on a project. You may use images to document job concerns and keep track of to-dos.
PlanGrid– A tool that quickly notifies a whole team when any documents are changed.
Autodesk BIM 360 is a wonderful tool for revealing safety and quality concerns as well as managing field data.
If your prospect has questions or worries throughout the bidding process, don’t be concerned. To better connect with them, try to grasp the underlying source of any issues they have. Persistence is beneficial to the bidding process if approached correctly. Keeping in touch with potential clients and remaining consistent may help you clinch more deals.
It may also be beneficial to note out what a rival did well with their presentation, such as cost and timing. Showing continuous care and attention to detail for a project demonstrates devotion, which project owners appreciate.
Increasing the number of building proposals takes time. You can monitor your success and discover what’s working by keeping track of your bid-hit ratio over time. Your bid-hit ratio shows you how successful your bidding was overall. To obtain a sense of your bidding process and establish goals for the future, look at your bid-hit ratio for the last quarter or year.
Numbers aren’t the only thing that should be kept track of. Make a list of what you did differently in each project that contributed to you winning the bid. You’ll figure out which tactics are the most effective over time.
You should also keep track of the types of projects you regularly win as this will help you narrow down your specializations.
Finally, being competitive and adaptable during bad times may be aided by responding to changes in the business or economy.
For example, during the COVID-19 epidemic, home building increased but commercial development decreased. Contractors who normally compete on commercial work saw an opportunity to focus their efforts where the need was greatest.
While you shouldn’t wander too far from your area of expertise, responding to market trends allows you to broaden your knowledge and prospects.
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