5 Mistakes to Avoid when Bidding a Job

by Caitlin Snow January 15th, 2019

Delivering a winning bid proposal is a lot more complicated than throwing some numbers together and hoping to win. Good bid preparation requires a lot of time and effort; you should learn everything you can about the project, the client and the client’s expectations. Understanding all the needs of a project and making accurate estimates is a learned skill and a critical one at that. Making even the smallest mistake in your bid proposal can mean the difference between having a winning bid proposal and missing out on a significant job.

Here are our 5 mistakes to avoid when making a bid proposal to protect your business (and profits).

 

Be selective

This may seem pretty basic, but don’t bid on jobs you can’t do. It will end up costing you more than not taking the job at all. During the bidding process, consider the scope of the job and your company’s abilities; if the project seems to be too much, don’t risk it. Remember, no one has ever lost a penny on a job they didn’t take.

Along the same lines, be careful about taking on too many gigs at the same time. If you spread yourself too thin, not only could it cost you money as you scramble to keep up, but it could damage your reputation with multiple clients as their projects fall behind schedule or go off track.

Speaking of clients, be selective about them, too. A customer that is focused on price over quality is almost inevitably going to cause you a headache and cost you more than the job is even worth. The client isn’t always right and when they’re wrong it can be a real disaster for you.

 

Visit the site (at least once)

Never take a job without having visited the site. Site location, conditions and accessibility should always be factored into your bid. A remote site means you need to arrange transport not only of supplies and equipment, but also for your crew each day. You may decide to provide transportation for your crew, which is obviously an additional cost. If the site is pure mud, you will need to figure out how to get supplies in at all. If access roads are narrow, then bringing equipment in could be problematic. And so forth…

Your pre-bid meeting should either be on site or be paired with a site visit to ensure that you fully understand that project and its context. Failing to take site conditions into consideration can lead to a severe under-bid and cost you seriously.

 

Qualify your subs and their pricing

With large projects, there are so many variables to consider. One of these that you can’t entirely control is subs and their quotes. If one of your subs botches his quote or his part of the job, your bid is suddenly going to be off or your project could be delayed. What you can do is vet your subs thoroughly in order to ensure that you are working with quality people and they are giving you reliable pricing.

Get multiple bids for each trade you will need to subcontract, even if you have a regular guy. If you are resistant to straying from the sub you know, have a candid convo with your guy to confirm that all is well and that his quote is accurate. Good subs can make things run smoothly and on time, but a bad sub or a bad quote from a sub can throw a serious monkey wrench into the works.

 

Take your time

Rushing a bid can lead to major issues moving forward. It’s better to miss out on a gig than winning with a rushed, inaccurate bill and losing money as the project goes forward. Putting together a bid takes time. You need to understand the whole scope of the project and the client’s expectations before you can accurately assess the associated costs.

Don’t be fooled into thinking that a bid can be reused from an earlier similar job. No matter how similar on the surface, no two jobs are the same. Locations, standards, budget, timeframe, etc. all vary from project to project. Take from your experiences of similar gigs in the past, but draw up every bid from scratch to avoid errors.

Take your time and focus exclusively on the bid while you’re working on it, shutting out distractions that can draw away focus and affect your accuracy.

 

Don’t undersell yourself

You have value. While you’re pricing jobs, remember that your work isn’t identical to other contractors in your area. If you have a lot of experience or expertise in a particular service, don’t be afraid to charge for them and defend yourself if you’re questioned. As mentioned above, overly cost sensitive clients can be a headache. If a client continuously hounds you to drop your price, drop them. They clearly don’t value the quality and service you’re offering.

If you’ve done the calculations and decided on a figure, but feel nervous asking for that amount, ask yourself why? Is it fear of overcharging? You don’t feel it’s fair? That could be, but more likely, you’re just undervaluing yourself and the services your provide.

Undercharging can not only cost you money on individuals jobs, it can devalue your company by making you seem “budget” or “cheap.” That can affect your business in the long term.

 

 

Learning to draw up accurate and fair bids takes time and a lot of experience. Everyone has botched a couple bids, but if you take from your experiences and learn from your mistakes, you’ll get quicker and more accurate each time and your business will flourish.

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