Landing profitable projects is crucial for builders’ and construction professionals’ business growth. The construction industry is very competitive. Mastering the bidding process is essential but challenging. This guide offers practical tips to help you succeed. It includes advice on becoming a bonded contractor and choosing the right jobs. Here’s how to secure more bids

Find the Right Projects

You need selection criteria for choosing the right projects to bid on, just like the client. Start by ensuring the project will be profitable. If the numbers don’t add up initially, move on. Focus on bidding for jobs where you have a higher chance of winning. Check if you meet the required trade characteristics and capabilities. Evaluate if your organization fits the project specifications. 

• Financial stability
• Legal compliance
• Sustainability practices
• Team size and capacity
• Accreditation and certification

If you bid on every project, you may end up doing work that doesn’t fit your skills. This can trap you in a cycle, only winning repeat business from the same customers.

Know Bid-Hit Ratio

Your bid-hit ratio shows how many bids you win compared to how many you submit. For example, if you submit 36 bids and win 4, your ratio is 9:1. This means you win 1 out of every 10 bids. To improve, analyze your bids further. Break them into categories like public vs. private contracts, building types (extensions, new builds, renovations), location, and contract value (<£5,000, >£5,000). This analysis may reveal that you have a higher success rate for smaller private contracts, especially extensions.

Prepare an Accurate Estimate

Cost planning is key to your bid. Clients often review itemized costs and compare them with other contractors. Check if you’ve included everything in your breakdown. Missing items or incorrect measurements can hurt your bid. Cost planning software makes it easier to submit accurate bids. With Dekr Estimation software, you can:

• Generate instant quotes for different specifications.
• Create a schedule of work with a visual timeline.
• Ensure precise measurements and avoid errors.
• Compare your pricing with market averages in your area.
• Use detailed templates to make sure nothing is missed.
• Quickly filter out unsuitable clients with accurate cost plans.
• Provide accurate pricing with project-specific rates and live material feeds.

Client Follow-Up

You’ve spent a lot of time on your bid, but you haven’t heard back yet. You can still reach out to them. Instead of sending aggressive emails, contact them politely. Ask for an update on your bid. If you didn’t win, use the chance to get feedback.

Invest in Risk Mitigation Strategies

Having a risk management strategy is important for construction bids. It shows you’ve researched and identified risks and evaluated potential issues. This signals to your client that you’re prepared to handle project expenses. Surety bonds help build your credibility. They protect your client from financial risks, accidents, low-quality work, and project delays. Contractors with surety bonds are often more competitive and can access more projects. They also gain the trust of potential clients.

Seek and Apply Feedback

Getting feedback after losing a contract is almost as valuable as winning it. Without feedback, you leave empty-handed. We often don’t know our pitch’s weaknesses and rely on others for honest feedback. Some clients will tell you how you compared to the competition, including pricing and other issues.

Tip: In your follow-up email or conversation, thank the client and show interest in working with them if things don’t work out with the chosen contractor. This positions you as a potential backup. Don’t take it personally if you don’t get a response. Some clients might just be comparing bids. If you think someone is wasting your time, stop engaging with them.

Write Comprehensive Proposals

Generic proposals get ignored. Each bid should address the specifics of that job. Using copy-and-paste methods might save time, but it lowers your chances of winning. Clients can easily spot pre-made proposals as they don’t meet their specific needs. Do your homework and tailor each proposal.

Early Bid Submission Advantage

Deadlines are set, but clients often review proposals before the final date. Submitting early gives you an advantage. Late submissions must work harder to stand out. People tend to remember the first information they receive. So, early bids are more likely to be reviewed and seen as a benchmark.

Reasons for Losing Construction Bids

If you keep losing bids, there’s likely a key reason. Consider if:

• Your price was off.
• You submitted late.
• You didn’t use the right tools.
• You didn’t clearly detail your costs.
• You didn’t highlight your experience.
• You missed documents or information.
• You didn’t understand the project scope.
• Your testimonials and past project evidence were lacking.

Evaluation Criteria for Construction Bids

Firms use various criteria to choose a construction business. They score based on:

• Price
• Quality
• Sustainability
• Track record
• Project timeline
• Financial stability
• Technical capabilities
• Compliance with requirements

Pricing Strategy Use For Construction Tenders

There are several pricing strategies you can use to determine your final bid amount. It’s important to be thorough, as your bid will likely be closely reviewed. Here are some key pricing strategies:

• Add your costs (hard and soft) and your margin to determine your bid price.
• Set prices based on what your customers are willing to pay.
• Combine price and quality in your bid. You might offer a low price with a higher quality rating or a competitive price with high quality. MEAT ensures fairness by not always favoring the cheapest bids.
• Adjust prices based on the number of units. For example, building one home might be priced differently than building ten homes. This method works well for projects with changing scopes.

Conclusion

Some studies show that construction companies spend up to 22% of their turnover on bidding for work. Tenders are very competitive, and focusing on quantity over quality can lead to diminishing returns. As you submit more bids, the quality of your efforts may decline. It’s important to be selective and focus on your niche.

Ideally, you’d have a steady stream of work from your ideal customers and spend less time bidding. However, using a broad approach to bidding often makes this ideal difficult to achieve.