None of the work that goes into a construction project—the sweat and the dirt and the sunburns and, finally, the gleaming new structure—ever happens unless you get past the very first phase: the bid.
Here, you’re not a construction manager. You’re a salesperson. This is where you make the case to the client why he or she should choose you instead of potentially dozens of other firms.
It’s a daunting task to be sure. The average construction firm bids anywhere from four to 10 times before they win a project. That’s a lot of hours creating an estimate and crafting a bid, only for it to be for naught the majority of the time.
But take heart, there are some simple strategies you can adopt to increase your bid-hit ratio—and, consequently, give your bottom line a shot in the arm.
A few simple changes to the way you craft your bid proposals will help you win more construction bids.
Contractors generally bid many times for every project they win, meaning that even a slight increase in a firm’s successful bid rate will lead to a couple of extra projects per year, and therefore a huge boost in profits. This guide will help you craft the best possible construction bid proposal that will be irresistible to clients.
Construction companies that implement these five strategies into their bidding process in the next three months will win one extra project per quarter.
1. Get your bid in early
It’s such a simple thing, but getting your bid in before anyone else will have a huge impact on your ability to win bids. Most construction managers dismiss this as trivial—what would getting your bid in first have to do with your ability to get the project done on time?
While that’s true, it’s a fact of human nature that the first bid in is usually the bid that gets most of the attention, and therefore the one that is most likely to stick in the client’s mind.
Once a couple dozen companies have put in a bid for a project, the owner or general contractor is less likely to really pay a lot of attention to the latecomers. If you put your bid in that late, the gears are already turning on one of the other proposals, and only a miracle will move your bid to the front of their minds.
When the client first puts the job out there, they are wondering about what the bids are going to look like. They’re likely to be wondering:
- Is anyone going to be able to make an offer that makes financial sense for me?
- How will they approach this difficult part of the project?
- Am I going to have to spend the money on this expensive material or will one of the bidders find a solution for a cheaper option?
The client will be eager to read those first couple bids to get some of those answers, so you have a chance to make a big first impression that you won’t have once a lot of companies have joined the fray.
TAKE ACTION: Create a “construction bid proposal task force,” enlisting some individuals in your company that you trust—or, if you’re a two- or three-person shop, involve your whole team—so you can craft a bid as quickly as possible.
Then start using some construction bidding marketplaces to help you spot jobs before your competitors do. Monitor sites such as BidHub, BidClerk, BidPlanroom, BidNet, and iSqFt. When you spot something of interest, clear your schedule, gather your construction bid task force, and make getting that bid out the door as quickly as possible your top priority.
2. Know thy client
In order to craft the perfect bid, you’ve got to know your client. Understanding who your client is, what they’re looking to accomplish with this project, and what they are likely looking for in a contractor can help you create a bid that will immediately catch their eye.
We live in the digital age, and there’s so much information available that wasn’t around a couple decades ago—or even a few years ago. Many construction firms aren’t using this to their advantage, but that’s where you can get an edge.
For example, there’s a good chance that there’s a public record out there of past projects your client has been involved in, how they went, and how they award projects. Look up permits and other public records a client has submitted for past projects.
TAKE ACTION: Research everything you can about your client with your task force, and then have a meeting to talk about what is most likely to be impressive to this client. Then reach out to the client and ask if you can visit the project site with the team before submitting your bid so they can come up with some ideas on how to meet their needs.
Simply showing the client that you did your research and care about doing the job right, rather than simply winning the bid, will make a strong and positive impression.
3. Sell on value, not price
All construction managers feel the pressure to submit a bid that is lower than everyone else’s. Most just make the cynical assumption that owners and general contractors are only interested in getting the best deal. But that’s not always the case.
People spend more for value all the time. That’s true in every industry, and construction is no exception. But you’ve got to make a compelling argument for what your client is getting for the extra money, and it’s incumbent on you to make that case crystal clear.
In the end, this the best way to win a bid. If you just get into a price-slashing war with your competitors, you’re not going to make any profit anyway no matter how many bids you win. If you can find an effective way to make the “value” case to your prospective clients, you’ve got a big edge and you’re likely to make a lot more money per project.
So what are the selling points you can focus on? Experience and a sterling reputation certainly is a big one. Clients may still opt for a cheaper, relatively unknown contractor, but they may not sleep well at night worrying that the inexperienced contractor they hired is going to mess up the foundation and send a project into chaos.
Excellent customer service is another great selling point that works in every industry—a client will rest easier knowing that if there’s an issue, you’ll take care of it, even if it’s months after the project completion. And any client who has been screwed by a construction firm going belly-up mid-project is going to place a big premium on a company that can show it is financially stable.
TAKE ACTION: Get that construction bid task force together again and grab the ol’ marker and whiteboard. Brainstorm your strengths, and what value you offer that other firms can’t offer.
If you feel like your offerings are thin, ask yourselves how you could add value. Do you bid on a lot of projects that involve challenging electrical work? Maybe you could hire a premium, highly experienced electrician who could become part of your crew that you could highlight during the bid process.
4. Use construction estimating software to improve your bid quality
The quality of your construction bid depends a lot on how organized you are and how accurate and thorough your numbers are. Construction estimating software will help you estimate the project more quickly in a way that will not only help you craft a better bid, but determine whether this is a project that is profitable enough for you to bid on.
If you’re still using pen and paper to create your bids, you have a huge opportunity to totally change how you bid for the better. You’ll be amazed at how the right construction software will improve operations. Specifically:
- It’ll do all the calculations for you, so you’re not spending hours buried in numbers.
- It’ll keep all your documents in one place, so you can pull them up whenever the need arises.
- It’ll help you compile the data you need for more accurate estimates.
Even if you already have some type of software, it makes sense to look at other software options that may fit your company better. That’s especially true if you feel your current software has some limitations that are holding you back.
TAKE ACTION: Browse through our construction estimating software directory. Find 10 options that look like the best fits for your organization, then review their features and watch their demos. Once you narrow down the contenders, set up consultations with five of them. Decide on one within a month.
5. Increase your team’s productivity
Too many construction managers just assume that they lost a bid because other contractors underbid them. Don’t allow yourself to fall into that type of thinking. Instead, take a close look at your operation.
You need to run a productive, cost-effective operation in order to land bids. Firms too often fall into the trap of not tracking their costs and often have no idea what their profit margins are. Just taking this step could give you a considerable advantage over your competitors.
If you know what your costs and profits are and what the exact breakdown is, you can identify areas that are ripe for improvement—driving down labor costs, boosting productivity, and making you a more attractive candidate to a potential client.
TAKE ACTION: Find an industry-specific construction accounting software option that you are comfortable with that is capable of helping you to clearly monitor costs and profits. Set aside some time to sit down with your task force to talk over what the numbers show and draft a plan to reduce labor costs or improve efficiency on your project.
Take action now to win more construction bid proposals
Unless you want to continue winning an average number of construction bids and struggling to survive like everyone else, you need to take action now to rise above the rest and start thriving in this competitive industry.
Take the few simple steps below to start seeing immediate results in how effective you are at catching the attention of prospective clients.
- Set up a construction bid proposal task force among your most trusted team members.
- Brainstorm what value you bring that your competitors can’t match.
- Find a project that has just been posted in the last day or two and focus on turning in a bid as quickly as possible.
- Research your client extensively to understand what they’re looking for.
- Use our construction bid proposal template to create a simple but thorough estimate for the client.
- Use our construction job cost calculator to help get a general idea of how much your bid should be.
- Request a free consultation or call us now at (855) 998-8505 so one of our advisors can help you find construction estimating, accounting or bidding software that will improve your bidding process.