If you’re in the construction business, you may want to know that 75% of construction businesses survive their first year. That percentage drops down to 65% by the second year. In year five, only 35% of construction companies will still be in business.
In 2020 if you factor in COVID-19, you may be looking at a lot more failures than the above percentages. Every business in today’s marketplace has a new normal in which the standards are still being written. But if your a construction company that wants to bid on construction jobs, there is a new way forward.
Read on if you want to learn how to win the bidding wars so you can start the new projects your company deserves. Below you will find helpful hints, tips, and resources to use. These helpful tips will not only help you win bids, but they will help you rise to the top of all your construction company rivals.
Bid on Construction Jobs
If things weren’t hard enough when you went to bid on construction jobs, 2020 added a whole other layer to the term challenging due to COVID-19. 2020 is when private industry, the government, and COVID-19 were all put on the same page trying to assimilate the best way possible. All are committed to staying healthy and well but also in wanting to keep businesses afloat.
It’s not going to be easy because the 2020 construction output is expected to drop by 6.6% due to the ripple impact of COVID-19. That means over $122 billion will never be earned due to the sharp decrease in demand for new construction projects. To help counter that downside, you want to be the company that is using pro-active measures to help you stay safe and bid successfully.
Bidding on construction jobs always took shrewdness, experience, expertise, and knowledge to get a winning estimate. You need to prepare your construction job bid so that you can get a reasonable profit. But your profit can’t be so lucrative you lose the construction job to a company that was able to get the right proportional estimates without going too high or low.
How Companies Win and Lose Construction Bids
Some of the bigger mistakes construction companies make are in overleveraging and tying up their working capital and cash with ongoing projects. What if there was a surefire way that helped you not overinvest in fixed assets that are underutilized? What if there was a way that you kept the available capital you need as a buffer, so there are never any unexpected detrimental surprises for your construction company?
The key to winning construction bids can be done by using five crucial tips. These five tips represent the smooth facilitation of the bidding process that helps you win the most coveted construction projects. The good news is that 81% of construction companies think their companies will be able to rebound before the end of the year.
If you want to be a part of the 81% rebounding construction companies, you need to use smart strategies when bidding on projects. You also need to use smart safety measures when out working on a construction project during the COVID-19 pandemic.
Five Crucial Tips to Help You Win Bids on Construction Jobs
Winning construction bids isn’t always a straightforward process. It also tends to have a moving bottom line depending on the economy, job market, and competition, but there are five crucial tips to helping you win the most bids on construction jobs.
#1 Know Your Company’s Construction Strengths
You may have heard it a thousand times, but one of the best ways to win on construction job bids is to know your company’s construction strengths. You don’t want to chase after construction job bids that don’t match those strengths. Often that’s when you need a simplified and streamlined preconstruction network that offers you the most accurate database platform with construction project details in targeted locations.
If you use an all-in-one database platform that can be accessed anytime and anywhere, you can be one of the first to know about construction bids before your competition does. In the construction bidding marketplace, finding out and pre-emptively finding jobs that meet your company’s strengths takes you almost across the winning bids finish line. You always want to know more about a construction bid than the bid price, and by using a platform that helps your company know and use its strengths to win bids, then you’ve come up with a winning formula.
#2 Research is Everything When Bidding on Construction Contracts
If you’re most interested in bidding construction projects, there are multi-layered databases that can customize your search needs. You must have a research strategy in place that you trust. One of the easiest ways to go sideways on a construction bid is to doubt your research or keep second-guessing the research you know is accurate.
There are construction stories of miscues in construction bids when the bidder had accurate and reliable research pointing them in the right direction, but they didn’t trust it or use it. When you have the experience and knowledge to know what your margins are, what your costs will be based on research, even if there are a lot of variables, trust your numbers.
#3 Market Fluctuations When Bidding on Construction Jobs
If you can figure out what’s going on with the cost and availability of materials based on market impact and fluctuations, find a service or a platform that can figure out. Fluctuations in cost and availability of materials have never been more in flux than it is right now during COVID-19. By making provisions for the changes you’re going to be seeing in the cost of labor, transport, administration, materials, and more, you need to be considering every single material cost this project has and prepare your bid estimate accordingly.
When dealing with a fluctuating market, you must know your own value and everything your construction company brings to the table. Don’t get fixating on comparing your price on the bid to another company. Instead, focus on the value you bring to the table through your experience and expertise.
You can easily operate with a no-contact bid process while implementing safety measures for active projects that are mandatory during COVID-19, all because of your experience and expertise in construction.
#4 Go Over Your Construction Bid with a Go or No-Go Determination
Before every launch at NASA, every department in charge of the launch has to give a go or a no-go decision. That same strategy needs to be done with your construction bid once you put it together. It’s an intuitive process when you cross off your project’s profitability, short and long-term strategy, and even your construction bid risk assessment.
But there’s a moment when you have to decide based on your company’s strengths and the construction project’s needs if you should go ahead and make the bid. There’s no doubt there will be delays you figured would happen and those that will take you by surprise, but which way does your data-driven approach combined with your gut-instinct tell you to go? There is something called the bid or no-bid matrix, and sometimes that’s used when needed if you can’t come to a final and firm decision one way or the other.
The important thing is that you use the tools you’ve been given to make the best decision possible during the review process.
#5 Plan Your Construction Team’s Productivity Early
Many construction bids that were won fall apart during the implementation of the construction building phase. Many construction companies think they can hire that person or this one when the time comes. Some think that running a cost-effective operation doesn’t include tracking costs.
If you don’t track your costs, how do you know what your profit margins are? If you think you’re going to be able to get this person or that material and then find out they aren’t available, where do you go from there? It’s essential you carefully plan out what you’ll need to begin your construction project when you when the bid.
How to Bid on Construction Contracts Takes Strategy and Smart Tools
The smartest thing you can do as management or owner of a construction company knows your strategy is not only in smart bidding but in ramping up a construction project, working the construction project, and ramping down a project. When you bid on construction jobs, you’re only in a preliminary phase of making a construction project successful for your company.
That means you need to run a cost-effective operation just to land bids. Making sure you can track your costs and profit margins means you’ll know what to do for the next construction project and the one after that. That strategy gives you a leg up on your competition and can help you navigate the construction world since the advent of COVID-19.
When you’re ready to work on improving your construction job bids in this ever-changing COVID-19 marketplace, reach out to Construct-A-Lead and take a free test drive. You can learn just how much having the right database tools, and platforms can do for your construction company. In today’s marketplace, you need every winning advantage over the competition you can find.