How To Successfully Bid Your Next Contracting Job

In the contracting world, bidding your jobs correctly plays a significant role in whether or not your efforts will return a profit. If your bids are too high, you will get little to no business; however, if your bids are too low, you will find yourself with a lot of work for little to no profit.

So where is the middle ground?

Finding the middle ground on which to bid on is vital. This will allow you to successfully compete, and hopefully outbid, other contractors within the area you are working.

Every contracting job will be different from one another, but there are three key items that any contractor must know in order to succeed.

Understand How to Estimate the Job

No matter what job you are contracting, you must know how to estimate the job efficiently. A great estimation starts with a great plan. You should always craft a step-by-step plan that will both meet and exceed the needs of the person contracting you. For example, if you are a one-person pressure washing team, you should know roughly how long it will take you to fill the customer's pressure washing needs efficiently. If your estimate is realistic, your customer will understand this and may end up being more likely to contract you for the job.

Furthermore, it is important to understand how to upsell. For example, going back to the pressure washing scenario, if a customer wants you to pressure wash their home, you should offer to clean their driveway or sidewalk for a slightly larger price. A great trick is to clean a small area of what you are trying to upsell, and show the customer how great their home could potentially look. This goes for nearly any other contracting business as well. Learn the way of the salesman.

Understand Labor Rates Fluctuation

In the contracting world, labor rates can be troublesome - because they play a large role on the success of your estimates. Labor rates are always changing, and they also vary throughout different areas. Therefore it is important to understand what the going rate is in the area for the job you are doing.

A trick to this is to call around to a few local competitors to find what their rates are for a job. Chances are, your customer will be calling them for estimates, so you should know what their current prices are. This will allow you to potentially win the bids over your competition.

Understand Where to Purchase Materials

A large part of a contracting job's profits will come from how the contractor is purchasing materials. Clearly, if you are spending a large majority of your earnings on materials for the job, you profit margin will be significantly less. This is why it is important to know where to purchase the materials for your job.

Since the two occupations go hand-in-hand, many experienced contractors have built rapport with various material suppliers within the industry they serve. This will allow them to buy materials in bulk, at a significantly discounted rate, thus bringing their profit margins much higher.

Understand Equipment Rental Options

The contracting world brings a lot of odd jobs to the table. Some of these jobs may require specific equipment that may not be needed again in the future. This means that going out to buy a tractor or an air compressor for one job may drastically hurt your overall profits. However, there are options where a contracting professional can rent various pieces of construction equipment in order to help them take on and complete these odd jobs, without spending thousands upon thousands of dollars on new equipment.

Conclusion

Overall, knowing how to successfully bid on your contracting jobs can land you in a world of success, but it is equally important to be able to accept a loss. At times, a competitor may go incredibly low with a bid, and it may be tempting to follow suit. If the bid is so low that you will not turn a profit, it may be best to move on. You must be responsible with your bidding.