As an independent contractor first starting out you may be a bit unfamiliar with the bidding process (though you probably have quite a bit of experience as a contractor). Bids are the boring, bureaucratic side of being a contractor and may make you want to run for the hills and grab the closest sledgehammer. But, they are necessary and without them it will be more than difficult to bring in revenue. We have put together a list of steps you can take to ensure that you win every project that comes your way (you can take the ones you want) and establish yourself as the best independent contractor in your community.
1. Physical Environment
Someone brings a project to you, it looks like a great opportunity but… it is very far away. A lot of contractors first starting out will not see that as an issue but the cost of commuting can make even the best project a little less attractive. You want to spend as little on transportation as possible so, unless the project will allow you to make your mark and better your brand.
Other physical situations to avoid are properties that are difficult to access because of the equipment you may have to use to get to that property. Both travel and extreme environments can cause a once affordable project to turn into a money pit (not something you want to deal with when you are first starting out).
2. Material World
Now it is time to imagine that you have arrived at the project. What materials are you going to need? Whatever it is, those materials are going to cost you money and therefore will cost your clients money. The only remaining question is how much you should charge for said materials. Rates will differ based on who you talk to but we recommend that you charge somewhere between 10% and 15%. It will allow you to cover any unforeseen costs in the future while still making a reasonable profit.
3. Time is Money
You do not want to end up bogged down with a project that will take you over a month to complete but does not offer you a rate that makes it worth it. In that time frame you could find other jobs that pay you more as your experience grows so avoid projects that will take you and your company out of commission for a while. You want to grow, not remain stagnant.
If you can total up the cost of your time, how much it will cost you to get there and how much you will charge for materials you can get a better estimate of how much the project is truly worth. That idea of value will help you get rid of the projects you do not want and help you narrow the list down to the ones you do, making your business more profitable and making life a little bit easier. If you have any further questions about the bidding process do not hesitate to give us a call at 1-800-649-9094. We look forward to hearing from you!