Your skill at bidding on a construction project is a major factor in how much profit your company turns each year. Because bidding is a complex process, there’s always room to improve your skill, and sometimes even minor refinements pay off in big ways.
Familiarize Yourself with the House
Take time to get thoroughly familiar with the house or renovation project the client wants. For a renovation, make sure you understand what problems the homeowner is trying to solve. Do a walkthrough of the home to get an accurate idea of what’s needed.
Try to obtain working drawings or at least a scope of work. In addition to preventing miscalculations, this preparation also helps you avoid bidding on a construction project that will only turn into a major headache.
Consider All the Costs
Even small renovation projects are complex jobs with many variables. Instead of guessing and fussing with spreadsheets, use professional construction estimating software to create more accurate estimates faster. These programs let you account for all costs, including sitework, subcontractor fees, materials, labor, and requirements for HVAC and plumbing.
Calculate Your Profits
In your excitement to gain a new client, it’s tempting to low-ball and forget about profit. Including your overhead costs and profit margin in every bid ensures that you not only keep your business running, but also have the budget to expand by advertising, hiring help, and investing in new equipment. Keep in mind construction overhead fees can run as high as 54 percent of revenue with profit margins of just 3 percent.
Hand in Your Bid
Sending in your bid by email or post may seem like it would save everyone time, but it’s ultimately less efficient. Instead, meet with your client to present your bid packet in person. This gives you a chance to explain the bid and answer questions, which prevents miscommunication and confusion that could cost you the job. The rapport you build during this meeting also increases your chances of gaining a client.
For more experienced-based tips on bidding on a construction project, contact Construction Monitor today.