You can bid badly and win construction business that is bad for business. The construction business can be more a science than a crapshoot if you use technology tools.
Here are some tips for bidding badly:
- Be ignorant about your equipment – Don’t keep records of maintenance; if you’ve got construction business machinery that’s due to fail, you’ll forget to pad the bid with rental equipment costs. Forget fuel and transporting your equipment to the project site expenses.
- Bid fast – Put your bid together quickly without double-checking for mistakes.
- Don’t pay attention to data – There are construction business software programs that factor-in employee turnover, injuries, and days off work but don’t bother with those numbers. Assume there will be no overtime.
- Don’t seek clarifications before bidding – Making assumptions usually leads to disaster but you don’t want to look dumb. There’s likely a cut-off date for questions but don’t pay attention to it.
- Don’t visit the project site – You’ll be unaware of conditions that affect the project, like accessibility and location.
- Forget risks – Every project has risks, but don’t analyze the probability and potential for profit loss.
- Make math errors – You’ve made math mistakes in the past but don’t ask someone to double-check the numbers this time. Avoid using software that does the math for you.
- Make subcontractor assumptions – Assume your subcontractors can work for a certain price and are able to deliver what you want on-time and under-budget.
- Miscalculate – Under- or over-estimate construction costs and the quantity of materials you need. Using square feet when you should have used square yards can definitely skew profits.
- Never request competitive subcontractor bids – You’ve been working with your buddy’s construction business for 10 years.
- Skip the pre-bid meeting – You’ll miss the opportunity to fully understand the job requirements. Someone else may ask questions and get the answers you needed before you won the bid.
- Underestimate materials – Even though the material costs and supplies change almost weekly, lock yourself into costs that may be out-of-date.