How to Figure a Winning Bid

2009-02-18T17:48:00Z

The key steps to figuring a profitable quote.

1. Screen your customers. Are they referrals? Or are they just curious about the price? Referrals are the most important lead. They know your work, they can trust you, and pricing is not the most important thing, so you can price accordingly.

2. Get all of the details for the job; figure a price for each and every item. (An item without a price is a losing item). Learn conditions like time constraints, dead lines, hindrances, ECT. Get a feel for expectations from job. (Just cleaning up to sell or long term usage or investment?).

3. Measure and get quantities, what quality of products do they expect, use only top quality products, using inferior products could haunt you and turn a winning job into a loser with call backs.

4. Bring job information back to the office and figure a quote, if they are serious about the job, they expect you to come back with a detailed and accurate bid. Plus this will give you time to think of questions and possible problems. Don't be afraid to call and ask questions, details are the key to the quote; customers like to know and feel you're serious about your work and their job.

5. Next: Office work, take all your items (The Take Off) and put a quantity next to them. (The Take off Summary). Then multiply by a production rate or sq. ft .price. (There are several sources: Frank R. Walker for one). This will give you a production price; I only use this price as a guide and a feel for what my competitors may be using for price.

6. Hourly and Materials price. First you needed to figure your Labor Burden (not what you're paying your employees but, what they truly cost you per hour), their pay rate and all taxes, insurances, breaks on a yearly bases and break that back down to hourly. (I have a very good work sheet on my
Speedy Estimating Program). Estimate how many hours it will take you for each item; I use the sq. ft guide and break out the materials. Multiply by each employees rate expected to on the job a $10.00 man and a $19.00 man will change your labor costs drastically so this way you'll get an average. This will be your project labor costs.

6. Next figure all Materials at cost, all materials! The more detailed the better. Quantities and price per piece. This will save time when ordering the materials, you won't be doing the whole bid over again to write your purchase orders.

7. Figure all other expenses that will be associated with the job like equipment rentals, gas, travel, hotels, and Sub Contractors.

8. Take Labor costs, materials cost, and equipment/sub. costs and apply your overhead, (your costs for running your company). This could vary by the size of your company and job. Then multiply that total by a desired profit. 10% to 20% is acceptable.

9. So you know your costs, you know your overhead and your profit. I compare that to the sq.ft. or production method and usually the bids are very close. Normally I use the hourly method because there is usually a difficulty factor figured in.

10. Now you're ready to submit your bid, you know what you want as a company; the next key is to sell your price, quality, dependability, and responsibility. Price isn't the only selling point. If you can't get the bid at your price and agreeable terms learn to walk away. I've never lost money on a job I didn't get! Move on to the next job and treat it with the same seriousness. Generally you'll get the bid if it's a qualified lead and they trust you. Or negotiate new specs and conditions within their budget. If you're winning every bid your quotes are too low.

11. Now you have budgets and target prices for your Foreman to beat, that's the key, if he doesn't have budgets then he/they think they have a blank check to do the job. Let him know you expect him to beat the budget and he'll receive a bonus. Tell him what he could expect as a bonus, it'll be the best money spent, he'll think about the job day and night even on his free time and that doesn't cost you anything.
Make sure you pay him, its money you figured in job costs anyhow.

You can get 23 pages to qualify leads, figure estimates, write proposals, change orders, work orders, labor burden, job reports, time sheets, actual labor and materials, invoice, statements, compare actual vs. estimated, compare all job P&L's on speedyestimating.com

Comments Speedy Estimating Program

2007-10-25T01:06:00Z

Please use this blog to ask questions, make comments about my web site speedyestimating.com or my program Speedy Estimating For Contractors. Thanks for your input. Pat