Companies have different strategies to win bids. Some cut costs to the bone, while others promise speedy completion dates. But it can be hard to maintain margins on low-cost projects, and using the schedule as a differentiator can work against you if things don’t go according to plan. Consider these four smarter tactics for improving your bid-hit ratio and staying profitable.
1. Determine the jobs at which your company excels.
The old-school approach is volume-driven. Bid on as many jobs as possible and you’re sure to win enough to see a profit. Unfortunately, that’s a lot like shooting bullets at a target while wearing a blindfold. Sure, you’ll get some hits, but it’s due to random luck—not because you carefully took aim.
A better option is to take a look at the types of projects your company consistently does well, document the characteristics they share, then use those parameters to guide the types of jobs you actively pursue. As part of that analysis, take advantage of the data that machine technology gives you—real numbers can guide to you bigger margins.
2. Just say no to bids that don’t fit.
Based on the types of jobs at which your company excels, create a bid/no-bid standard—then follow it. Deciding not to bid on that first job may be hard, but remember that it’s smart business. Instead of having your estimators spending too little time on multiple bids, they’ll be able to spend more time refining proposals for projects you really want and work your company can deliver profitably.
3. Invest in estimating like you do your fleet.
Some of the biggest problems in the estimating process come from inadequate attention to detail:
You can fix these gaps by investing in training, process and calculation. Estimates that share the same high standards as your work will help set your company apart.
4. Remember the people part of bidding.
Whenever you have the opportunity to ask questions or meet with prospective customers, do it. On private jobs, make a presentation of your proposal so you can walk through your approach and answer questions. If you can’t present in person, take steps to learn as much as possible about the selection process and how bids will be evaluated, so you can adapt your bid appropriately.