Whether you’re a builder or contractor, getting your construction bid right from the outset is absolutely vital if you want to win more work while also staying profitable.
However, bidding is notoriously one of the most challenging and time-consuming parts of the job – and all too often, builders and contractors end up grinding over bids outside of work hours to stay ahead.
But working long hours opens you up to potential errors. Get the bid wrong (and many do) and you can quickly end up covering costs out of your own pocket.
The challenges builders face
We’ve all been there, right? It’s easy to miscount materials, underestimate their cost, or fail to account for enough time. And it’s not only manual errors that can catch you. There are other factors at play that are out of your direct control, like widespread material shortages, spiraling material costs and labor shortages – all of which can cause unwanted delays and increased expenses.
That’s a lot to think about. What can we do about it? Let’s talk about how you can be set up for success:
How to plan the right way
First things first, consider the nature and scope of the job. The complexity and size of the project will dictate the level of skilled labor needed and the size of the team. Make sure the project is within your experience. Homeowners will want to see that you’ve built something similar to their project.
You should also look at what materials and equipment you’ll need, as well as timeframes. Make sure your estimate clarifies to the homeowner that their choices of materials plays a huge role in the total cost of the build. Negotiating material choices should be made before a final contract is signed; otherwise, you’ll be faced with change orders down the road that will complicate the project and your relationship with the customer.
Simplify your project plans
To avoid change orders, use a checklist of what needs to be included in your construction bid, so you are consistently covering all essential points, and you forget nothing.
What to include in a construction bid
- Project details: Make sure you include your customer’s contact details, a bid number and date, and a project description or title.
- Scope of Work: Provide a breakdown of the tasks, phases and activities, as well as a description of the work that will be performed. More on this below.
- Timeline: Outline the projected start and finish date of the project, making sure you’re being realistic so you can manage expectations.
- Materials: List the materials needed and quantities, outlining unit prices as well as the total material cost.
- Labor: Provide a breakdown of labor tasks and projected hours, and give a cost based on hourly/daily labor rates. Also include any subcontractor costs.
- Overheads: Don’t forget any indirect costs you may incur like equipment rental, administrative expenses, insurance, and clean-up costs.
- Margins: Make sure you’re including markup not only to cover indirect overhead costs but also to ensure a fair profit for your business, based on industry standards.
- Add ons/exclusions: List any additional services or options available, but also clearly state anything that’s not included in the bid for clarity. Don’t overcommit just to win the job.
- Terms and conditions: Include payment terms, a validity period for the bid, as well as any other relevant Ts and Cs.
Accurately scope a project with the construction bid
- Include every element: It’s very easy to forget something when bidding, but that will only eat into profits down the line. Make sure every task, material and cost are accounted for as thoroughly as possible.
- Know your material prices: Stay up to date on any price changes and ensure you’re adjusting your bids accordingly.
- Know the labor market: In this industry, it’s key to keep on top of what’s happening in the labor market. You need to know what availability there is of skilled workers, as well as any changing labor rates.
- Consider all parts of the project: It can be easy to get caught up with one part of a project and then neglect another. Take time to review every part, so nothing gets left out and always consider any potential challenges that could impact on time and costs.
- Use the right technology: Nowadays there’s intelligent software available that makes construction bids quick, easy, and accurate every time. If you invest in bidding software, you can eliminate any costly errors, bid competitively in a fraction of the time, lose the admin, and become more profitable.
What’s overlooked when creating a construction bid?
There’s a whole host of things that can get overlooked when creating a bid—all of which can leave builders losing out on hard-earned profits.
Changing material prices is a common one, and it can be challenging to keep a tab on something that’s so volatile. The key is to try and stay abreast of changes by talking with your dealer so that you can update your bids regularly; otherwise, they’ll quickly be out of date.
Supply chain issues and labor shortages are other hurdles that builders must deal with on a regular basis. Factor any potential delays and consider what back-up plans you might need in place to keep things moving. Also, just as important as the labor itself, make sure you’re checking equipment availability.
As discussed already, change orders during the project also throw off costs and timings along the way. It’s key that you document any changes and requests made so you can avoid any discrepancies down the line.
Travel time is another factor that can be easily missed off the list, so depending on where the job is, it’s worth factoring this in, along with associated costs for your team and materials.
Don’t forget to think about the weather and changing seasons either. This can be hard to predict. Severe weather significantly affects timelines; so plan ahead. It’s also worth staying across any macroeconomic conditions that might affect costs, like inflations, or fluctuations in the housing market.
Stay ahead with construction bidding software
Creating precise bids is such a crucial part of staying profitable, which is why builders and contractors are increasingly turning to easy-to-use construction bidding software to do the job rather than manual methods.
Using the right construction quoting software means you can bid up to five times faster than before, saving you valuable time that could be used to generate more business. It also means you can bid with more confidence, knowing bids are accurate and error-free.
Easy-to-use takeoff tools provide precise measurements and cost calculations in a matter of clicks, and you can even link to real-time prices with your preferred suppliers. The software then converts this information into professional-looking, personalized bids that will impress customers.
If you’re keen to see firsthand how quick and stress-free accurate quoting can be, try it for yourself with a free demo or no obligation 14 day trial with Buildxact.
And for full information on Buildxact pricing, be sure to check out all the details.
