After Mastering Your Electrical Estimating Software: What’s Next?
Why did I lose the bid despite using electrical estimating software? It’s not uncommon to lose a bid now and then, and there are many reasons why this could happen. While mistakes can occur—after all, nobody’s perfect—let’s explore some other factors that might have contributed to your loss.
Bidding Against the Wrong Competition
If you find yourself losing more bids than winning, the issue might not be with your estimates. You could simply be competing in the wrong market. Consider the following:
- You might be bidding against smaller companies that have lower overhead costs.
- They might pay their employees less than you do.
- They may not factor in expenses like insurance, cell phones, bonuses, or truck costs.
- Smaller companies may lack the experience to correctly estimate electrical projects.
Bidding on Projects Not Suited for Your Company
No one excels at everything. Identifying your company’s niche is crucial for maximizing profits. Keeping historical data can help you determine whether certain projects are worth pursuing. For example, if you consistently lose money on restaurant projects, it indicates you may need to increase your estimates for such jobs. However, if raising your bid makes you uncompetitive in that market, it’s better to avoid those projects altogether.
Consistently Submitting High Bids
Learn to say no. Avoid the temptation to bid just to submit a number. It’s more beneficial to forgo bidding on a job than to establish a reputation for being the highest bidder. Focus your estimating efforts on projects where you have a genuine chance of winning and can turn a profit. You don’t have to be the lowest bidder; just strive to be competitive.
Building Relationships: The Key to Electrical Success
Surviving by being the low bidder on every job is not sustainable. You’ve worked hard to build relationships, and becoming the low bidder puts you in a position to show general contractors why they should choose you for projects where they can select their team. These relationships take effort to develop, allowing you to outperform your competition.
When a general contractor has a project where they can assemble a bidding team, you want to be one of their preferred choices. These types of projects tend to be more profitable than public work.
Understanding the Key Elements of Electrical Estimating
Proficiency in electrical estimating software is essential; you cannot survive in this industry without mastering this skill. For instance, if four contractors bid on the same project and all utilize electrical estimating software effectively, they will likely end up with similar material lists and man-hours.
In such a scenario, all four contractors should have estimates that are within $2,000. The deciding factors that could win or lose you the project will be:
– Your labor rate
– Overhead costs
– Profit margins
– Travel expenses
– Fuel costs
– Supervision fees
– Storage costs
– Per diem
– Hotel expenses
– Plans and job trailers
– Lost time
– Equipment costs (lifts, trenchers, backhoes)
– Miscellaneous expenses
– Man-hour adjustments for job difficulty
– Bonuses
Understanding these costs—both for your company and your competitors—will be crucial.
Cultivating Relationships with Your Electrical Supply House
Electrical contractors that pay their bills on time and maintain strong relationships with their supply houses enjoy a significant advantage. Although pricing might seem uniform at first glance, slow payments and frequent order issues can put you at a disadvantage.
Most lighting and gear packages are specified by part number and product name, and the specified package is often not the cheapest available. Competing suppliers may spend considerable time finding equivalent products, allowing them to save significant amounts. The companies that foster better relationships typically secure these advantages.
Find a powerful supply house like Sonapar and build a relationship.
By focusing on these areas, you can improve your bid success rate and strengthen your position in the market.