You have built a business to be proud of and people now look up to you as a successful person. You feel good about this but are concerned about your lack of detailed financial knowledge and believe that your accountant is not the person to help, as they don't really understand construction.
Let's be frank. Price is the most common reason contractors lose tenders and securing a project where the tender price is wrong, is the most common reason projects are not profitable.
Therefore, getting the price right underpins being a profitable contractor.
The price includes the build costs which an estimator will calculate plus the overheads from the accounts. But what profit to add to just win the project and maximise profit is a mystery. Read on to find out about how we can de-mystify this for you.
HOW TO BE A PROFITABLE CONTRACTOR.
IF THE PRICE IS WRONG YOU WILL NOT MAKE A PROFIT.
Contracting is tough, there are supply chain issues, information issues, unreasonable clients and other bidders submit suicidal prices but if you have entered into a contract where the price is wrong, even overcoming these challenges will not turn a project round.
A METHOD TO GET THE PRICE RIGHT.
You are probably already aware that the price is key but nobody has told you how to maximise your price and still win a project. ProfitableContractor.co.uk uses a method which minimises the number of bids you take part in. It uses the project estimate and the overhead data which should be readily available from your accounts. In a Smart Tender Settlement your estimated costs, including overheads, are accurately benchmarked against current market data. Armed with this knowledge you are able to make an informed decision about the mark up required to win or lose a project. If you decide to win the project, you know that it has been secured by a whisker. The Smart Tender Settlement Method connects Marketing Strategy, Accounts and Estimating in one place. The other professionals who currently support you are unlikely to take such a detailed holistic approach.
WILL IT WORK?
Over a 10 year period of being selective about what to bid, then converting the estimate to a winning tender using current market information, the method was developed. £400m of profitable work was gained using the method. The method is not difficult to follow, it simply needs to be applied with consistency and accuracy to be successful. But don't take our word for it, take a look what our clients have said.
You can then get a free copy of the method emailed to you, by return, using the button below.
"Before Peter started the program with us, our bidding did not have much logic. He introduced a discipline which now enables us to win profitable jobs, when we need them."
MD Electrical Contractor
OUTSOURCING TENDERING ROLES
Want to understand how specialists can be used to carryout elements of the tender process, leaving you free to work out the profit to be added to maximise your profits, then take a look at our "outsourcing tender roles guide".
Price is undoubtedly a key decision for clients but when a contract is signed, the two parties are associated in the eyes of the outside world. Neither party wants to risk having their reputation tarnished by the other party's activities. Environmental, social and governance (ESG) issues are most likely to cause damage. Addressing those issues. so both parties are confident they will not be tarnished by their relationship, will ensure a contract does not fail at the first hurdle.
Price is undoubtedly the prime reason for not winning a project and the wrong price is why projects lose money, but there are many other issues contractors face. You will not be the first to have faced the issue. Take a look at "bespoke advice" section to find out how we can bring our wealth of experience and network to assist you rapidly resolve the issues.