Are you planning to enter the construction industry soon? Whether you’ll be working as a general contractor or subcontractor, you must have the know-how to bid on jobs to stay afloat financially as a contractor. In this guide, you’ll learn what it takes to land lucrative opportunities that will soar your business.
Billd Commercial Construction Financing
What is Construction Bidding?
Construction bidding entails connecting with a potential client to express your interest in a job and provide quotes. In short, it’s a proposal that outlines what you can offer and at what price.
Usual Life Cycle Of A Construction Bid
Below is a breakdown of the life cycle of a construction bid or the bidding process:
- Solicitation: The client requests bids for a construction project. The solicitation also includes specifications and plans you’ll need to prepare a proposal that accurately reflects the costs you’ll incur to complete the project.
- Due Diligence: Refer to the client’s website to ensure you’re familiar with the project’s scope. You’ll also want to dig deeper to determine if the project is a good fit for you.
- Submission: Draft up your bid and submit it to the client for review.
- Selection: The client reviews all qualified bids received to select the best option. Although it doesn’t always come down to cost, it often plays a significant role in the decision.
- Formation of Contract: You’ll connect with the client to finalize the contract if your bid is accepted.
- Delivery of Project: You get to work and complete the project by the deadline specified in the contract. Keep in mind that the client may also require you to meet milestones by specific dates along the way.
Common Items Included In A Bid
When creating your proposal, it’s important to consider all the costs you’ll incur to complete the project.
- Engineering expenses
- Drafting costs
- Machinery costs
- Materials needed to complete the job
- Labor costs subcontractors you’ll need
- Markup needed to turn a profit
- Overhead costs
- Subcontractors’ inclusions Insurance premiums
- Storage costs
- Supervision costs
- Transportation-related expenses
Factors That Can Affect The Success Of A Construction Bid
1. Previous Relationship
You’re more likely to win a bid if you have a prior relationship with the client and they like your work.
2. Reduced Schedule
If you can demonstrate to the client that you have ample availability to focus on their job and aren’t preoccupied with several current projects, your odds of submitting a winning bid could be higher.
3. Reduced Profit
If your proposal is the lowest, you may have a greater chance of winning the bid. The downside is your profit margin will likely be lower.
Billd Commercial Construction Financing
How to Bid On A Construction Job
- Review the solicitation and be sure to follow the instructions when submitting your proposal.
- Account for all applicable costs you’ll incur, including overhead, if you win the construction job. In short, you want to create accurate cost estimates to avoid money issues later on down the line.
- Perform your due diligence to find subcontractors who are reliable, skilled and less likely to cause problems or put you at risk for financial losses while on the construction site.
- If you’re unsure about anything regarding the construction project, consult with the client right away for clarification.
- Keep all correspondence related to the construction project organized, so it’s easily accessible at all times.
- Your proposal should be thorough and demonstrate to the prospective client that you’re the right subcontractor for the job.
- Ask past and current customers for testimonials and include them in your proposal. It’s also good to mention any credentials or awards you’ve earned.
- Create a spreadsheet to monitor your success rate when bidding on construction projects. Analyze winning proposals to determine how you should approach future solicitations.
How to Finance Materials After Winning Construction Jobs Bids
Submitting winning bids can make or break your construction business. However, it’s equally important to have the funds on hand to complete the job. Unfortunately, covering material costs before being paid for your work on new construction projects can cause cash flow issues in your business.
Fortunately, you can turn to Billd to get the material financing you need. It’s a payment solution provider that serves construction contractors working on commercial projects and commercial construction businesses. To date, Billd has funded projects valued at more than $42.5 billion and has worked with more than 2,600 suppliers.
Here’s how Billd works:
- Step 1: Fill out this form to request information about how to sign up for Billd with no cost.
- Step 2: Enroll with Billd.
- Step 3: Purchase construction materials from any supplier in the United States, and Billd will cover the cost.
- Step 4: Repay Billd when you get paid or within 120 days, whichever is sooner.
Fill out the form to learn more about how it works, or enroll for free and get access to material financing so you can focus on what you do best – scoping out construction bid opportunities, building a good reputation for your construction company and doing your best work on new projects.