Are You Pricing Yourself Out of Work? 4 Mistakes to Avoid When Bidding a Job
Going out to bid on a job — especially with a new customer — is fraught with tension. Bid too high, and it’ll cost you the job. Bid too low, and you’ll wind up barely breaking even, or worse, losing money. It can be hard to find the right balance. There are plenty of mistakes business owners make when seeking new contracts. Here are four pitfalls to avoid.
1. They don’t find out exactly what their customer wants. There’s no such thing as a stupid question when you’re going out to bid on a job. The more questions you ask, the better you’ll understand exactly what the customer seeks. That will help enable you to design a bid that not only serves all of their needs, but also gives you a better idea of the price to bid for all of the work you provide.
2. They don’t log and review projected versus actual costs. You can learn so much about how to bid more accurately by keeping a historic record of what you estimate and how things end up shaking out. Meticulously detailed data will allow you to analyze how factors such as mileage, load, time of day, weather and idling time impact your margins. This knowledge will help you to adjust future bids to account for these variations.
3. They don’t stick up for themselves. You know what your work is worth. So don’t sell yourself short. It’s easy to get swept up in the excitement of bidding — and often business owners who are overly eager to land the job will compromise to win. But is it really worth it if you barely break even? Know your margins and what you need to earn to collect a comfortable profit. Stick to your guns, and you’ll more likely have a win-win situation while growing your business.
4. They don’t build relationships. It’s a simple truth: customers like working with businesses they can trust. That trust doesn’t happen overnight – it takes work. And that’s where relationship building comes in. Say you don’t get a customer’s job the first time you go out to bid with them. Take it in stride, thank them for considering your company, and check in with them down the line. Small gestures like that help ensure that both current and potential customers will see you as more than just a cog in their business’s wheel. They’ll learn that they’re someone they can rely on — someone who deserves their business. And eventually, you just might not have to go out to bid at all.
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