Southern Utah’s construction industry is competitive, to say the least. Bidding wars are not uncommon and certainly every company claims to be the best. Many St George bids that are presented to potential clients are as low as they are because costs have been cut. How do construction companies stay away from cutting fees but still be competitive? We believe the solution involves thinking outside the box. Construction companies need to reveal their value, advocate for their expertise, and fine-tune their infrastructure. Let us explain.
A company’s central element of focus that drives all other metrics is referred to as the win rate. In construction, you should determine your win rate this way: divide gained projects by submitted proposals. You should be able to do this automatically if you’re using a CRM (client relationship management system). The obvious goal should be a high win rate (where St George bids are concerned) which can be influenced by a number of different things. Your method of lead generation, the general caliber of your proposals, how effective you are at going after the right jobs; all of these things (and more) can affect your win rate. Figure out what yours is and get it as high as possible.
You don’t have any business unless you win bids, so obviously this is one of the most important aspects of working in this industry. But that doesn’t mean that you should be bidding on everything and anything. You must get into the habit of only going after the right ones. Create your own checklist of criteria and only pursue jobs that meet your custom-made specifications. One of the pivotal aspects of success in this industry is smart bidding. Projects that match your goals financially and professionally are the ones you want to locate and bid on. Simply placing a bid on every job that presents itself is unwise. It’s also important that you know certain things before solidifying your bidding process. Here are some things that need to be clear within your company when it comes to St George bidding in general:
- Who are you continuously losing bids to? Why is that happening?
- What types of St George bids do you usually win? Why is this?
- How well-defined is your sales process and are you documenting all sales efforts?
- Do most of your new jobs tend to be discovered through one particular sales effort? Are you analyzing these occurrences?
It’s important to remember that when you lose a bid, you aren’t just losing the potential profit. You are also losing the proposal process’s expenditure. This is because there is a negative value associated with an underutilized staff. If there is a St George project that you know going in will be near impossible to win, don’t bid on it. When you bid on these types of projects, you lose profit simply by bidding on them because the time and cost that you invested in them increase your overhead. Find particular projects that align with your company’s abilities and scope, at least in the beginning.
The ability to construct a quality estimate is a skill in and of itself and definitely plays an important role in landing projects that are profitable in St George. As you already know, the budget and contractual details of the project are determined by the estimate. Overrunning the budget (and other problems) is almost always the result of estimate flaws. When creating estimates, you must make sure that tasks and hours are accurate, all information is accurate, and margins for contingencies are clear, among other things.
There are most certainly many more pieces of advice that could be given in regards to winning St. George bids, but start with these and make a real effort to build the strength of your operations. Be smart and calculative in all of your decision-making processes. Your chances of success will increase dramatically if you do.
Article by Clear Content Marketing