Though not afraid of bidding, successful contractors use a thoughtful process for vetting the projects they choose to bid on. Having the ability to bid is an important capacity, but a “willy nilly” approach to choosing projects is unwise. Here are strategic questions to consider when weighing pursuit of a new opportunity.
Leverage Insights
Thoroughly debriefing completed projects takes effort–and is therefore easy to avoid. Why bother if the next project is just ahead? Slow down, say experts. Well leveraged insights from past projects do contribute to successful new bids:
- To know where you’re going, you must first understand where you’ve been. Give your bids a head start to success and take inventory of past projects to see what worked and what fell flat. You can do this by understanding the factors involved in deciding whether to bid or not. Tracking your bid/no bid data will help vet and select the right projects by identifying winning prospects.
- Looking back on past projects, was the job profitable once everything was said and done? Make sure you’ve calculated all fees, including labor, equipment, materials, and any unforeseen expenses.
- You’ll also want to calculate overhead costs, meaning all your backend support. Those costs include insurance, legal fees, utilities, software, etc. It may be time to change your tune if you’re questioning the importance of collecting data and setting profit goals before and after a project is complete.
While using facts to inform the types of projects that are most profitable for your business, it’s also important to assess your capabilities related to potential new bids. Reputation is important for builders, so avoid overextending. Use these questions to assess the current capacity of your business:
- Do you have the team on-hand to complete the project on schedule?
- Does the scope of work match your team’s experience?
- Is the cash flow available to complete the project?
In addition to profitability and capacity, risk management is a critical consideration when evaluating opportunities. No one really wants to win the bid, only to find themself in business with an overly challenging client, hasty project documents, an unrealistic timeline or unsafe conditions. To avoid unwanted risks, keep an eye out for incomplete documents and unknowns:
- Incomplete plans and documents spell trouble for any project and can stall work before it begins. Look over all plans and contracts and check for anything that doesn’t meet legal or safety regulations.
- Having full knowledge of the condition of the construction site before work begins has both physical and financial benefits. An unsecure job site could lead to serious injuries to workers or damage to materials and equipment.
Get An Edge
When you’re ready to bid, be sure you have an edge, with the right partner behind you. For example, you can open doors to unprecedented possibilities for your business with these contractor advantages, uniquely from Colonial Surety Company via The Partnership Account® for Contractors:
- Free Business Credit Scores: Instantly receive your business credit scores at no cost.
- Pre-Qualify for Surety Line of Credit: Explore the possibility of having a line of credit–in writing– with single and aggregate bonding limits.
- Easy Qualification Process: Just submit your basic financial information, and our dedicated underwriter will guide you through the qualification process.
Upon approval, you’ll enjoy privileges like:
- Written Bonding Limits: Receive your single and aggregate bonding limits in writing.
- Instant Bid Bond Issuance: Gain the ability to issue your own bid bonds within minutes.
- Real-Time Visibility: Log in to view your underwriting profile and financial scores in real time.
The Path To More Wins Starts Here:
The Partnership Account® for Contractors
Founded in 1930, Colonial Surety Company is a leading direct seller and writer of surety bonds and insurance products across the USA. Colonial is rated “A Excellent” by A.M. Best Company and U.S. Treasury listed. Let’s connect today: Colonial Surety.