When instructing kids on how to make friends, we often tell them, “Quality over quantity.” Befriend the small number of people who support you through thick and thin, rather than casting a broad net and befriending those who take more out of you than they give back.
The same goes for your bids. There are times when you can bid for volume, but when there are changes and fluctuations in the current economy, we must rely on the jobs that sturdily support our business. We must bid for quality rather than quantity.
With a slim workforce and rising product prices, margins are tighter, and more work is going into each job to make it produce enough to pay yourself back. Now is the time, especially since we are within mid-year, to really focus on the projects you want that will create more margin and less stress.
Here are a few ways to tell if a project is worth bidding on:
1. Clear Scope and Direction
The clearer the scope of work is, the fewer assumptions you must make. Assumptions cost time and money. Look for projects where the general contractor has a track record of good direction and even better communication.
2. Strong General Contractor or Owner Relationships
Bid on the projects where you already hold a strong relationship with those involved.
3. Realistic Schedules
A project with a jammed timeline leaves little room for error or profit. A compressed timeline could lead to unnecessary supply chain and labor stress. A well-paced project timeline will help morale and revenue.
4. Fair and Transparent Payment Terms
We always say this, but “cash flow is king,” and we will never not stand behind that statement. A project that pays slowly or withholds a high retainage can be misleading, especially if it looks highly profitable on paper. Review the payment schedule, discuss it with those involved, and negotiate if needed before jumping into the project.
5. Low Bids vs. Value
If the job is awarded strictly to the lowest bidder, proceed cautiously. Typically, that lets us know there will automatically be less flexibility and more pricing pressure. Projects that value qualifications, relationships, and overall value leave more room for strategic pricing.
6. Alignment with Team Capacity
Labor availability is low. Even jobs that are well-paying projects can become unprofitable if your workforce is stretched too thin or does not have the right qualifications for the project. Ensure you are bidding on projects that align with your team’s ability to successfully complete it.
Like we tell our kids: choose wisely, choose well, and you’ll build a business supported by the kind of work that works for you.
