By Kim Arnott
You know you aren't the only one bidding for that job, so how do you make your bid stand apart from your competitor's without underbidding the project? Here are five tips to creating a winning and profitable bid.
If your idea of a quote is a number scribbled on the back of a business card, clients may be less inclined to take you seriously. Help your bid stand out from the rest by putting together a polished, professional-looking package.
Mike Martin, an Ottawa-based renovator and vice chair of the Canadian Renovator's Council, says his bid packages always include referrals from previous clients, information on his company's green initiatives and useful information about relevant government rebate programs, along with a detailed project proposal.
Building a good bid requires an investment of time. While many contractors may use a simple per square foot calculation to set a price, Martin says he always analyzes the costs for each element of the project, and even has his tradespeople visit a potential job site to get a good feel for the scope and details of the project.
"I personally try to figure the costs out right down to the nails," he says.
Once the bid is prepared, he takes the time to sit down with the client and go through his package to explain it.
Even if the client would settle for the number scribbled on the back of the business card, no you shouldn't put that forward as a bid.
Experts agree that a good bid clearly outlines a plan for the complete project. It should include a start date, end date, payment schedule and completion milestones.
Rob Wright, owner of Ottawa-based Citadel Renovations says his budgets for a project include a written description that covers everything that will happen from the first moment of demolition to site clean up. Covering all the details helps everyone avoid delays and other nasty surprises midway through the project.
"Telling them what you're not going to do is as important or more important as telling them what you're going to do," says Wright. "That way, you're protecting your mark-up, you're protecting your profit. You've got to be defensive about that."
Make sure the client knows and can tell you exactly what they want as an end product. Clear and detailed drawings and specifications covering every element of the project can eliminate the unknown factors that make the difference between a client's happiness or disappointment, and a contractor's profit or loss.
If the client hasn't yet picked out the cabinet hardware, for example, provide a noted allowance that at least estimates a unit cost or dollar value, suggests Wright. That allows you to have some flexibility in the project budget if the client picks out something that costs twice as much as budgeted.
"Don't leave anything blank," says Wright. "Don't leave any holes anywhere."
After 26 years in the renovation business, Martin says he knows enough to follow his instincts when a potential project looks problematic. One sure warning sign? A customer who says they have a $70,000 budget for a job you know will cost $100,000 to do properly. "If you try to do the job that way, you're not going to make a dime," he says. His alarm bells also start ringing if there are signs that a different contractor was previously doing work at the home and is now no longer around.
Wright adds that personality issues can be important when taking on any job for a new client. "If you and your client can't get along, you're dead," he says. "You have to pay attention to the 'spidey senses' and interview them as much as they interview you."