Winning more construction bids is not a direct result of simply bidding for more projects. Bidding on every project that comes your way is not a smart or sustainable bidding strategy. Successful contractors know where to work best and determine the right type of project for their business to win more bids, improve profitability and grow their business. Winning more bids, or winning more profitable bids specifically, requires an investment of time and resources. Before investing time and resources, you need to evaluate your current bidding process and make an honest assessment of what it is doing right and what needs to change in order to be more competitive. Business Acquisition – Winning a Project The building contracting process starts with a business acquisition. In order to build a job, a contractor must first win the job. Winning more bids begins long before a bid or proposal is made. To win more bids, you must understand that building contracting requires dedicated study, field experience, and commercial knowledge. Winning on a consistent basis requires knowledge – knowing the client and their expectations, knowing the specifics and scope of project work, knowledge of local building codes, regulations, and other requirements. The goal is to win over the potential customer by demonstrating the value it creates that meets or exceeds their needs and expectations. This could include quality, timeliness, cost, or a combination of the three. For most public construction projects, this means being the least responsible bidder. For private construction projects, the owner may place a higher value on the quality of your work or your performance on previous projects. By understanding exactly what the customer wants, you can craft a more competitive offer or offer. Choosing the Right Business – Market Analysis In order to determine the right business, you need to review previous projects and determine the most profitable type of business. This may differ from the work you and your company are willing to do. This review should be objective and data-driven, so check your intuition and feelings at the door before you start. To analyze their market, conduct a review of past projects and performance, including everything you bid on over the past year, to determine which type of projects you own in the winning bid and which are the most profitable. Elements that must be included in the analysis include the following: Project name Completed year Type of work Client name Project location Contract method Method of presentation Original contract amount Final contract amount Final contract amount Estimated profit margin Actual profit margin by obtaining a clear picture of the bid and win share The most profitable projects Depending on the type of business, location, client, etc., you will better understand how to easily identify which projects to follow and improve the bottom line. Another way to help you choose suitable projects is to conduct a market analysis. Based on your company’s project data over time, you can determine what makes the ideal market for your construction company. The ideal market is determined by clients, project types, and location but there is no set standard for what makes the market ideal and it can vary greatly from contractor to contractor. What is the standard among contractors is that the definition of “perfection” usually contains the fact that the customer, type of business and location are very profitable. Each market factor should be clearly identified by the members of your team who are conducting the analysis. As for the type of customer, it could simply be a list of clients you’ve worked with over the past year or two and whether they are a public or private entity. As for the location, you can go as wide or as precise as you want, and it may depend on the size of your company’s service area. If you have a license to perform work in multiple states, you can focus only on the state, county, or MSA. If your company tends to be more local, you can use the city or zip code for locations. As for the type of business, you can again be broad or specific based on what you think works best for your company. You can define the type of business by the type of structure – apartment, hotels, retail stores, office buildings, schools, etc. You can dig a little deeper and sort by type of construction, for example, new construction, renovations, fixtures, etc. The project size and project value. You will then need to develop criteria that define what is “ideal” in each market category. For a customer rating, you might decide that your ideal customers are those who pay on time, have predictable bid ranges, and demand a good job. For site ranking, ideal locations might include those with the best combination of suppliers and subcontractors, travel cost, or material costs. Next, assign a significance level to each of these levels, on a scale of 1-10, for profitability. The most important criteria are given the highest weight. In order to ensure a complete and clear analysis, no two factors should have the same weight or rating. Make sure to allocate sufficient time and energy to define the “ideal” market for your construction company. Analyzes for each market factor must be completed separately in order to develop a clear picture of each factor. Develop a score for each category and then multiply that score by the weight for each criterion. The total will give you the total score for each category. The categories that get the highest score are the most ideal (ideal), while the categories that get the lowest score are less than ideal. With this method, you can identify the ideal clients to work with, the ideal locations, and the ideal types of work to find and win more profitable projects and bids. The ultimate goal is to position your company to win more bids by becoming more selective in terms of the clients, locations, and types of work they offer. Need help finding the right construction project leads for your company? ConstructConnect Project Intelligence makes it easy to find that perfect project. Set preferences for trades, coverage area, building type, project value, and more to get matching leads and score them to easily select the right projects for your company.