4 Tips to a Successful Residential Bid

Experts are always telling homeowners to obtain several bids before selecting the right contractor for their remodel or repair job, and, it is a smart move, for the consumer when making home repairs/upgrades. 

With this in mind, it's incredible how many contractors fail to get the bidding process right. Many use the wrong forms, miscalculate the number of hours, labor required, the cost of materials and do not plan correctly for subcontractors.

These four steps below will help avoid these issues and help you prepare a successful residential bid proposal.

Tip 1: Get to know the project in mind, the house!

Obtaining as much information about the house is essential to getting your bid right.

A set of drawings and walk through examination, notes taking, photographs and/or line drawings are essential and while you are at it, it is a good idea to ask a client if he may already have any house plans, drawings or mock-ups. Questions to ask yourself concerning the job is why the customer is renovating or repairing, what is the customer's outcome expectation, are all things that will help you get up to speed. The more open and transparent that you can be with your customer, will certainly give your prospective client an honest assessment of your character, values, etc.

Having a walk-through will help understand the potential customer's exact expectations and job specifications. You should take this time to ask questions, to get to know the client, his/here's expectation, it will also give you an idea what type of customer you are dealing with, for example, if he/she is picky for details, difficult, etc.

Tip 2: Calculating the tangible costs of the job

Now days, homeowners are turning to the Internet for quotes, remodeling calculators, material costs and even help videos that may help them do the job themselves. Fortunately, contractors have far more assets available to them such as construction estimating software, construction estimating excel spreadsheets which will help reduce the speculation that goes into creating a bid.

When calculating or estimating raw costs, be sure to consider:

• HVAC needs
• Subcontractor fees
• Materials
• Cost of labor
• Sitework (such as demolition and hauling)
• Preventative care
• Finishes
• Specialties
• Equipment
• Furnishings
• Permits (usually paid by project owner)

Tip 3: Be sure you make a profit

You should include overhead fees; if you need new tools or customer requests construction brands, or is particular in his/her expectations, you must substantially mark up your final price.

By how much?

According to Construction Programs and Results INC, "The typical remodeling contractor will have overhead expenses ranging from 25% to 54% of their revenue-that means every $15,000 job could have overhead expenses of $3,750 to $8,100." With these figures in mind, mark up your bid to actually return a profit.

According to the National Association of Home Builders, most remodelers only have a 3% margin. 

Don't fall into undervaluing your services in an attempt to win a bid, in the end, it is not worth it.

Tip 4: Present your bid.

You should stay away from mailing, emailing your bid proposal, try to pitch your bids in person, remember, this is part of the "selling" your services. This gives new customers the opportunity to ask questions and gives contractor's to fully explain the bid process, job details and helps avoid any miscommunication between you and the customer and avoid legal issues and hassles along the way. 

You should be ready to explain in detail the job, process and go through the itemized list with them, explaining the costs of how much things will be and any reasons why your figures may differ from that of other contractor's.

It is always a good idea, to plant trust in your company and yourself, to deliver a warranty certificate or workmanship warranty together with the bid proposal, this will set you a step ahead of other bid proposals that client may have already received or receive in the future and will give your prospective client peace of mind knowing that you stand behind your work.

Are there alternative tips that I missed? Suggestions from your experience? Leave your thoughts and comments below!