Summary
Several significant factors affect the best project to price. You should not submit a tender for projects that:
1. are unsuccessful
2. present a significant safety risk to employees or the general public
3. You lack the experience and information necessary to create a precise tender; 4. You pose a serious risk to the company's future;
The client might make a late payment, which 5. will have an adverse effect on the contractor's cash flow, 6. will likely not require workers with the expertise and understanding the contractor currently lacks.
8. necessitate bonds and sureties that can't be secured, and 9. exceed the client's budget in terms of final value
10. Set impossibly high goals
11. have significant and unlimited liquidated damages 12. Possess irrational contract clauses
13. Employ a subpar design team
14. lack all relevant permits or there is a danger that the client won't be given the required permits
15. are too little; 16. are too huge; 17. are in a far-off place you are unfamiliar with; and 18. are for challenging clients.
19. are illegal; 20. are sponsored by known criminal activity; 21. are debatable and may damage the company's reputation
22. You won't have a price that is competitive enough to give you a reasonable chance of winning the project.
Being a successful contractor depends on choosing and securing a project that is right for the business.
Finding the Right Projects, Module 2
Many little businesses are caught in a cycle of taking on meagre tasks, serving as subcontractors for larger firms, or working with challenging or slow-paying clients. How do you then escape this pattern and locate the ideal client for your project? To find out who these clients are and which projects will be good projects leading to further work, you'll need to put in some effort here.
retaining a good customer
Case Study: We had been unable to work for a specific customer for a number of years, and the majority of their work had been given to two contractors. Finally, we had a stroke of luck when a challenging but unremarkable project came available. They had lately moved their Project Director to another project, which made the situation worse. Only one contractor was now working on the site, but they hadn't done a very good job. The management of the other contractor had recently changed, and they were no longer aware of the value of maintaining the client. We made a competitive offer for the project and gave it our best during the post-tender talks since we were desperate for the work and to build a relationship with the client. The project was given to us, and we went on to successfully finish it as well as several other minor projects.
Following these, we effectively and profitably executed a very significant project that we had secured. The client had long since forgotten about any prior interactions they may have had with any of the two original contractors at this point.
The aforementioned illustrates how crucial it is to protect your clients and make sure you take good care of them because, once lost, they could be hard to find again.
Of course, offering a client a lower price won't drive competitors away. There will always be someone willing to lower their fees in order to work for a reputable client. Creating a relationship with the client is the only way to keep competition away.
2. supplying a high-quality item on schedule and without incident 3. Dealing with the client honestly and fairly
4. Admitting mistakes and solving issues as soon as possible 5. Controlling customer expectations
6. Never promise more than you can deliver; instead, underpromise and exceed expectations.
7. The client seeing the contractor's senior management on the project
Explain to the client why your bid is more expensive if a competitor's is less expensive. Inform the client of your prior accomplishments and triumphs on their projects. Negotiate the pricing with the client, but avoid starting a project at a loss.
Naturally, there is a risk that a contractor will grow complacent and haughty and start charging exorbitant rates for the service they perform repeatedly for a client. A client may become quite unforgiving once they realise they have been taken advantage of.
Avoid being too reliant on a single client. Unfortunately, clients go through periods of increased spending and periods of decreased spending. When a client quits spending, contractors that are heavily dependent on that client's business may suddenly run out of work.
Keep in touch with clients even after your work with them ends, whether it's because another contractor won the project or the client has finished all of their building tasks. This might mean a phone contact every six months and, at the absolute least, a holiday card. No matter how well you got along with the client, you can't count on them remembering your business a year from now and requesting you to submit a bid for their next project. It's unfortunate that clients have relatively short memory (apart from when it comes to remembering negative performance), thus it's important to constantly bring up the previous connection.
Research
Press releases from large corporations frequently announce new initiatives, so simply reading the news might give you some sense of when projects will begin. Articles regarding recent construction projects and local planning permissions are also published in local newspapers.
Trade publications are a good resource for learning about new initiatives. For instance, new mining projects are discussed in papers published by the mining sector, and comparable magazines are helpful to subscribe to in most industries.
You become familiar with the names of clients who have funding and are beginning new ventures by reading newspapers and trade magazines. Even advertising list management contractors, designers, and architects who operate in the industry you're interested in, as well as their names and contact information, which can be a source of beneficial leads. Create a database of these customers, workers, and experts.
Check the websites of prospective customers, designers, and management contractors frequently because they frequently post notifications of new projects they have been awarded.
Always keep an eye out as you drive; you'll see old structures being torn down, estates being prepped for development, and real estate brokers' boards advertising unfinished units for sale.
database of bids
Many nations have businesses that gather information on all publicly announced bids. They compile this data into lists, which they then distribute to contractors who pay for their service and update on a regular basis. (It's crucial to remember that many tenders aren't publicly announced and hence are unlikely to show up on these listings.)
The use of tender data bases is crucial for discovering what projects are out for bid. It's necessary to subscribe to at least one of those that serve the area in which you conduct business, and you should make sure that the tender database you choose to use includes all of the clients and projects your firm would find interesting. The tenders can frequently be filtered by area, contract type, or contract size in various data bases. The volume of tenders that come in each week without filters can occasionally be extremely overwhelming.
Remember that even if the project is too big for your company, you might be able to get quotes from larger contractors who would be willing to subcontract some of the work to a smaller contractor.
existing initiatives
Talk to the client's representatives while working on a project because they frequently have inside knowledge about other initiatives the business is working on or may be commencing. Getting the contact information of individuals in their organisations who you can approach to join vendor or bidding lists is also helpful. Since these people's names and contact information may come in handy in the future, add it to your own database.
Due to their frequent involvement in projects for a variety of clients, designers, architects, and managing contractors are also a goldmine of relevant information. Construction hasn't yet begun on some of these projects, which may still be in their early phases of planning.
Speaking with other contractors and subcontractors might also lead to new contacts and knowledge.
Even suppliers occasionally are aware of prospective projects since they have given estimates to other contractors or given costs to clients so that they might create budgets.
A current project offers the company the chance to showcase its expertise, of course. It's crucial to deliver a high-quality product on schedule, with little fuss or incident. Hopefully the client, their representatives, and the project team will take note of and remember this exceptional work and professionalism, opening up further prospects.
Make sure there are company brochures on hand for potential customers to take a look at at existing projects. Project managers should always carry an adequate number of business cards.
Networking
Networking with clients, subcontractors, designers, architects, and suppliers associated with the projects you're currently working on is advantageous, as was already said. It's still a good idea to expand on this networking, so joining trade organisations or regional business groups might be helpful. Success in business frequently depends more on who you know than on what you know.
Because customers start negotiating project labour agreements with them well before a project starts, often even union leaders learn about new projects before they begin.
People you meet at athletic events, social gatherings, and even on aeroplanes might lead to employment chances, as can friends and family members. Always keep extra business cards on hand in case a chance encounter occurs.
Other helpful contacts that are frequently involved in a new initiative from its early stages include:
Land surveyors are listed first, followed by quantity surveyors, town planners, environmentalists, and geotechnical engineers. 7. estate agents and 6. employment firms
8. Members of local government
Employees
Don't undervalue the market expertise of your own staff, who frequently have contacts working for subcontractors, clients, designers, or other contractors and may be aware of new projects before they are announced. Encourage staff members to share information about leads for open positions.
Of course, staff should be encouraged to sell for the business and positively represent it. Employees must be knowledgeable on the capabilities of the business so they can easily promote it when questioned by potential customers.
Competitors
Know the employers and locations where your rivals are employed. Competitors don't often share information, although occasionally at unofficial events or professional forums, they may disclose remarks about their projects or clientele.
Competitors frequently reveal the existence of new projects via press releases or websites.
Marketing
Potential clients must be able to buy into your business and its capabilities. Although the marketing process is constantly changing, it is mostly influenced by the kind of consumer your firm is trying to attract and where they are located.
One can occasionally contact specialised marketing firms, but these should be approached with caution. Large sums of money can be spent on marketing with little to show for it.
Make sure a marketing firm has prior expertise selling the services your business offers before contacting them. Make sure they are aware of the nature of your company, the area in which you operate, and your target market. Establish a clear budget that is in line with the potential results you want.
I would suggest that construction companies handle their own marketing, though. Typically, a multi-pronged strategy should be used because no one thing will operate well on its own. Since what works for one company might not necessarily work for yours, it's frequently a trial-and-error process. In fact, what works for you today might not work for you in a year, thus it must be constantly modified and enhanced to account for the evolving circumstances. Understanding what is effective will help you eliminate what is not.
Website A company's website is a crucial component in marketing the business, and many customers (even the small-time homeowner contemplating improvements) will visit it. The website should be quite straightforward; in general, stay away from pop-ups and videos (although these may be suitable for some specific companies). Clients desire:
1. a brief description of the company's capabilities, its activities, and the locations where it operates
2. to have contact information
3. A few samples (with pictures) of projects the business has completed, together with information on their size, nature, and clients
4. to view certifications and registrations for quality, environmental, and safety management, for example.
5. To view copies of their financial records or their yearly turnover for the previous few years (for larger contractors).
To advertise your website, you can employ a number of strategies. However, this is a separate discussion altogether and is a work in progress.
company pamphlets
Brochures are helpful to present to potential customers because they provide a summary of the company's capabilities and can be stored and used at a later time.
1. These brochures ought to be straightforward and follow a similar structure as the website, with contact information, a succinct description of the business, and illustrations of recently finished work.
2. The brochures must be produced on high-quality paper and should have a professional appearance.
3. Before printing, spend the time and effort carefully proofreading the brochure to make sure the spelling, grammar, and information are accurate. I frequently come across brochures that are poorly designed and written, giving the company a bad impression.
As the saying goes, "a picture is worth a thousand words." However, if subpar photos are utilised in a publication, website, or advertisement, they won't improve it and may even detract from the company's reputation. Verify the images to make sure:
1. they are of high quality (photographs must not be blurry, out of focus, or crooked); 2. no risky behaviours are depicted;
3. The work displayed is of a high calibre.
4. The job site is organised, tidy, and clean
5. They provide examples of what you are attempting to convey. Frequently, images are used that display the work of other contractors, making it impossible to notice the job that your firm completed, or the photograph is too small or was taken from a distance that obscures the work.
6. The photos are current and demonstrate a variety of work, in contrast to other artsy photos I've seen in advertisements that don't highlight the contractor's skills and resources.
7. The plant and equipment in the photos are presentable, in good working order, and should bear the company's insignia.
firm's logo
People typically notice logos first, which can be found on stationary, advertising, business cards, and signboards. I'm not an expert in marketing, so I can only speak from my own experience, but I would advise keeping the logo very straightforward with easily identifiable characters. Consider how the logo will appear on stationery, business cards, and letterheads. Avoid making the logo too long because it might need to be shrunk to fit on some surfaces. Remember that it will frequently be placed on equipment painted in different colours and should use bold fonts and colours.
Advertising
Advertising can be effective but also expensive and have little impact. I worked for a huge construction company, and we constantly received requests to place advertisements in various periodicals' publications from sales people.
1. Since their readers were unlikely to be our clients or give us any work, many of these would have been a waste of money. Therefore, give careful thought to your target audience and whether they intend to read the material. Make sure the advertising medium represents the image you want the business to project and reaches the target audience.
2. When writing an advertisement, keep it straightforward but make sure it conveys the message you want to get across. The reader should be able to quickly understand what your business does.
3. The advertisement must include the firm name, contact information (such as a phone number, email address, website, and physical location), and the name of a point of contact.
4. The advertisement needs to grab attention. Paying a lot of money for an advertisement that no one will see or read is meaningless.
5. The advertisement shouldn't be overly packed or cluttered. Some businesses make reading difficult by trying to cram in too many images or words.
Of course, there are many different forms of advertising, and each will depend on the target market, services offered, and size of the business. Some of the following are examples of advertising:
1. publishing advertisements in print media, such as national newspapers, regional newspapers, and local newspapers
mags 4. journals 5.
2. placing adverts in online publications, such as: 1. online journals; 2. websites; and 3. online newspapers
3. various online platforms, including: 1. Twitter accounts; 2. Facebook
4. Placing signs in prominent places where people will see them (always ensure that you have permission to put up the advertisements)
5. distributing flyers, which could take the following forms: 1 refrigerator magnets
2. Paper pads Calendars, third
4. journals
5. plain sheet of paper
Any of these advertisements are crucial since they are targeted at the audience you want to view and pay attention to your business. For instance, it makes no sense to spend a lot of money to place an advertisement in a national newspaper if your local plumbing business specialises in fixing leaks. Instead, it might be more appropriate to hand deliver fridge magnets or note books with your company information to homes in your neighbourhood so residents can find your contact information when a plumbing problem arises. Similarly, electronic marketing works well for many items and presumably works well in some areas of building, but not all.
In order to determine what works and what doesn't, experimentation may be required. But even what works today might not work in a few years, therefore the strategy must be routinely reviewed and adjusted to fit the situation. Asking new clients how they heard about you is a regular part of this process, and the responses should be tallied and examined to determine what has and hasn't worked.
Sponsorships
Some businesses support athletic events, sporting teams, or other activities as part of their marketing strategy. I haven't noticed any value for building companies from my prior experience, though I'm sure others will. It is occasionally helpful to promote goodwill in the community by sponsoring local teams and events. Naturally, with any sponsorship, it's critical that the sponsor's name be prominently displayed and that the public is aware of the organization's identity and the services it offers.
Support is occasionally unavoidable, such as when customers ask for a donation or sponsorship of an event. Once again, it's crucial that the firm name be prominently displayed at the occasion. This can be done by erecting flags or banners.
Companies that have achieved success should think about giving to charities, especially those that support the area where they have found success. The donation should ideally be something real and obvious. Invite the customer or even the local media to handover ceremonies to once more take use of the occasion and market it (always make sure both the project and donation are worthwhile).
Plant and machinery
Plant and equipment should be kept clean and in good working order because they can serve as effective forms of company advertising. Consider prominently displaying the corporate logo and adding contact information. It goes without saying that drivers of company vehicles and equipment should abide by the law and show consideration for other road users because you don't want your business to get a bad reputation.
Even if the firm is using equipment that has been hired from outside sources, the name of the business can be added on magnetic signage or something similar that can be attached to the equipment and then quickly removed when it is time to return it to the hire company. (Of course, be careful not to scratch the item's paintwork, as that will require repair work.)
Message boards
Your building projects' sign boards are a crucial part of your marketing strategy.
1. Before installing the sign board, obviously ask permission from the land owner and the appropriate authorities.
2. A skilled sign writer should prepare the signboard, and it needs to be erected safely and correctly. (Awkward signs of poor quality are a terrible reflection on the business.)
3. The firm name and contact information must be prominently displayed and easily readable on the signs.
Sometimes, once a project is finished, the contractor forgets to take down the sign board, and it stays up for several years. As long as the project is maintained and stays in good shape, this can be good free promotion. There is obviously no assurance that the client won't later hire other contractors to complete work that might not be as expert as that done by your organisation.
Instance study
On a building with a noticeable street frontage, a corporation constructed shade sails and erected their sign board, both of which remained in place for several years. The shade sails eventually developed rips, stains, and mould, though. Even still, the company's sign remained still there, clearly no longer serving as a good advertisement.
Be careful where the sign boards are placed because frequently they are on the corner of the property and may be mistaken for references to work being done on a neighbouring property, making the business appear less professional than you would like.
callers and meetings directly
Prospective customer meetings and site visits are crucial components of marketing. The encounters should be scheduled in advance, so you must be aware of the ideal individual to speak with. Most individuals, I've discovered time and time again, are eager to speak with you. However, it could be a waste of time if the meeting isn't with the right individual.
1. Arrive at the meeting prepared. Do some research on the business and its ongoing and upcoming projects.
2. Bring plenty of flyers and business cards to the meeting. 3. Write down what is said.
4. Describe your job and the work your organisation accomplishes in your introduction. 5. Give examples of projects the organisation has completed that are comparable to the ones they are working on. Describe the expertise, resources, and strengths of your organisation.
6. Congratulate the individual on any recent business successes or brand-new initiatives.
7. Find out how the ongoing projects are doing.
8. Request information regarding new projects, including the type, anticipated start date, projected size, who to contact, and instructions on how to be included on the tender lists.
9. Describe how and why your business is qualified and experienced to work on the project.
10. Help the customer with their feasibility studies and any other queries they might have.
11. Find out if there are any other individuals in the company you ought to contact.
12. Provide extra copies of the firm brochure and request that they be distributed to other employees.
13. Express your gratitude for their time and send them a thank-you email that may contain a link to your business' website and an electronic version of the brochure.
Keep in mind that large organisations frequently have a variety of different divisions or operating entities. Since these may operate in separate compartments with minimal communication among themselves, it may be required to get in touch with each one separately.
business newsletters
The creation of company newsletters is a good marketing strategy.
1. Depending on the size of the company, they may be one page long or longer. 2. Letters sent every three months should be adequate.
3. Make sure a senior manager proofreads them to ensure that the facts are accurate as well as the spelling and punctuation.
4. They ought to be given out to personnel and customers on ongoing initiatives.
5. They ought to discuss corporate changes and highlight diverse projects.
6. They ought to be printed on superior paper.
Visiting cards
As they are distributed at events, to prospective clients, and during business meetings, business cards are a crucial promotional tool.
1. They ought to have a consistent design, logo, and colour scheme across the entire organisation.
2. All business cards should be updated if the organisation changes the layout. When I attend a meeting and receive business cards from people who work for the same organisation, I find it a little perplexing.
3. Due to the frequent filing and pocketing of business cards, people frequently forget the name of the company when they need to refer to the card. Therefore, each card should prominently include the name, title, and contact information of each individual as well as the name of the business, which should indicate what the business does, such as building contractors, electrical contractors, etc.
4. It's crucial to carefully examine background colours, designs, and logos because the cards shouldn't be cluttered and should be readable by the majority of individuals without the need of glasses.
Referrals
Since someone else is essentially performing your marketing for you, referrals are actually a very effective kind of advertising. Try to distribute business cards and brochures wherever you operate. As an illustration, imagine that you are a tiling business helping a builder renovate a homeowner's home. Give your business card to the owner and any nearby neighbours you come across; you never know, they might need you for additional tiling work, even if it's not for a while. Give them a few extra cards, in fact. I'm sure we frequently gave the contractor's business card to our friends along with recommendations for reputable tradespeople.
Entertainment
While many clients have severe regulations regulating their workers attending such events, some clients want to be entertained or invited to athletic events. Make sure you comprehend and abide by these guidelines.
It can frequently be costly and even detrimental to entertain clients. Choose carefully who you invite, both from the client's and the company's side. There are various types of entertainment, ranging from smaller corporate parties when senior company members are invited to larger corporate gatherings with the immediate project participants. It must be appropriate to have fun.
Every official endeavour and company occasion should be thoroughly planned and thought out.
1. Senior managers should check the invitation list to make sure no one who should have been invited is missing.
2. Invitations should be sent out formally.
3. The event must be well-organized because it might be embarrassing when there isn't enough food, drink, or seats.
4. People stop attending these events as the novelty wears off, therefore they shouldn't be held too regularly.
work sources
I personally prefer to work directly for the client rather than as a subcontractor to a larger contractor, but this isn't always practicable. Additionally, working as a subcontractor may be advantageous for smaller contractors since it may give them the chance to get to know the client and showcase their skills. Major contractors will try to prevent their subcontractors from having any direct contact with their client, but working on the project usually gives you the chance to network. Ensure that all of your employees are wearing properly identified apparel and that your logo is conspicuously visible on all equipment.
These jobs also give smaller contractors experience working on significant projects for important clients. This experience eventually helps with developing a strong portfolio of completed projects, which can be utilised to persuade potential customers of the company's competence.
Working on these bigger projects offers the chance to develop new talents and gain knowledge of various building methods.
It should not be disregarded that even projects for which you would not submit a bid and which are not necessarily relevant to the field in which you work could contain a modest amount of work in your area. Large electrical and plumbing contractors, for example, might not be interested in handling excavation tasks or modest concrete projects, therefore they might subcontract these to smaller civil contractors.
memberships in trade organisations
Even if it's not required, registering with the organisations that represent the contractor's industry's trade bodies can be beneficial. Many customers believe that this gives them a guarantee that registered businesses are more trustworthy than unregistered ones.
Additionally, customers frequently contact these organisations to request the names of reliable contractors in their area.
These organisations occasionally publish newsletters that provide helpful contacts or information. Additionally, they typically hold frequent meetings for their members, which offer chances to network with rivals. Some even offer training courses that members can enrol in.
centralised organisations for tendering (bidding) and marketing
There are organisations set up in some places where clients can contact them to find local contractors. The customer contacts the business by phone or email and provides information about the task at hand. The organisation then requests quotes from plumbers who are already listed in its database, have the necessary experience, and are local to the project's location. The plumber either offers a quote directly to the customer or gives the business its price so that it can pass it on to the customer.
Small businesses that offer a service to the typical homeowner may find this helpful because the organisation does a good job of marketing the business. However, there is a cost that must be paid; it may be monthly, based on the leads the organisation delivers, or determined by the size of the projects the contractor secures.
It's also challenging to set your business apart from competitors apart by offering the lowest prices and gradually developing a reputation for producing high-quality work on schedule.
establishing joint ventures
Joining forces with another contractor is one approach to take on larger projects. There are several advantages to joint ventures:
1. The two partners' combined resources allow them to take on bigger tasks.
3. One partner may have a connection to a client but lack the competence to carry out the project on their own. They can be created when one partner has a certain specialty that the other partner lacks.
4. If both partners were to submit bids for the project, the competition to win it would be significantly reduced.
Joint ventures give businesses the chance to cooperate on bigger projects while also giving them the chance to observe how other businesses operate and pick up new business strategies.
collaborating with regional businesses and communities
Sometimes forming a relationship with a local business is beneficial when the company plans to operate in a new location. It might be beneficial to establish ties with the local population in rural locations, particularly those with sizable indigenous populations.
This approach may be especially beneficial before the start of significant initiatives. Customers are typically urged to support the local businesses and communities, however small businesses frequently lack the necessary resources or knowledge. The tender is more appealing to the client when connections are made (either by agreeing to form a joint venture or by pledging to outsource some of the work to regional contractors). These contractors also offer assistance with their local expertise. Additionally, utilising local resources is frequently less expensive than importing them.
Of course, the local businesses and communities should gain from these connections as well. Because the client will almost definitely learn about any issues, you must never give the impression that you have taken advantage of the nearby businesses.
Political support: Recognize the people who can truly assist
Some businesses form bonds with political parties or coalitions at the municipal, state, or federal levels. In some areas or nations, these connections can be beneficial, especially when they are used to learn about upcoming initiatives and changes. Nevertheless, I would exercise caution when making such associations because political personalities come and go, and it's possible that their successors won't want to interact with their former supporters and friends.
These political friendships should not be pursued since in some areas they can soon turn into corrupt alliances and transactions.
Corruption
It is recommended to steer clear of nations where corruption and bribery are commonplace. There is no assurance that the official accepting the bribe won't also be working with other contractors at the same time or that they will be able to influence the project's award. Additionally, even in nations where corruption is rampant, taking bribes is typically illegal, and businesses caught doing so risk having their management detained and being banned from doing business in that nation and others.
Reject the tender if you think corruption may have a hand in the selection of a contractor or the funding of a project.
Unfortunately, corruption doesn't just involve bribing bid-influencing officials; on occasion, one contractor will pay another to withdraw from the competition or to submit a higher non-competitive tender. These actions are prohibited, and if contractors are discovered engaging in them, it will reflect poorly on them and might result in their management facing jail time or a fine.
construction and design projects
It's helpful to develop a relationship with designers so the company can submit a bid for projects that are put out to tender as "design and construct" projects. Be aware that design and construct projects may require more time and money to tender than other projects.
These projects also carry greater risks, therefore it's crucial to collaborate with designers that have experience on projects similar to yours. Additionally, make sure they have enough design indemnity insurance in case their design is flawed.
Cross-disciplinary initiatives
The civil, mechanical, and even the electrical services are included in some clients' projects that are offered as entire packages. Companies typically have a competitive edge if they manufacture all of these parts internally. As an alternative, the corporation could create joint ventures or alliances for the project by partnering with qualified contractors who can offer the necessary skills that the company lacks.
Finance
Sometimes clients have viable projects, but they lack the funding to move forward. Contractors who are in the fortunate situation of having a healthy bank account or a source of funding may think about providing the customer with a finance option to increase the appeal of their bidding. A favourable and well-structured financing arrangement may also result in significant profits for the building company.
It goes without saying that caution must be exercised to make sure there are enough guarantees in place to pay the loan amount and that the work's value does not exceed the agreed-upon loan value.
support for feasibility studies
Clients frequently ask contractors for help with their feasibility studies. When you initially learn about a potential project, you might even have the chance to approach a client to ask if you can be of any help. These feasibility studies do need time and effort, and some projects might never materialise or might do so many years after you first became interested in them.
It can be challenging to decline a client's request for a contractor to help with their feasibility study, though. My clients have refused to ask contractors to submit bids since I offered to help them with their feasibility research.
By assisting with the feasibility study, you may shape the client's design in a way that is more in line with your company's strengths. The contractor has an advantage in the tender process because they have previously thought through the construction methods and explored other choices, which should result in a more accurate and competitive tender price. This is due to their involvement in the project's feasibility study.
Be wary of efforts that are too ambitious.
Over the years, developers frequently sought our organisation to help with feasibility studies for projects they were putting up but weren't going to proceed with. The ideas just weren't feasible due to their too ambitious or outrageous nature; they wouldn't receive funding or development clearance. Rarely, maybe once in ten times, the project was completed, but when it did, it was typically many years later and the developer had forgotten who had helped them with their planning and feasibility studies.
It takes time and resources away from other projects that are more likely to move forward and produce work in the short and medium term to help with these projects. We would have needed to hire more Estimators if we had priced every aspect of these plans.
Therefore, it's critical to conduct study and determine which initiatives are real and which are likely to never materialise, as well as, if so, when.
You might think about helping with these projects if the estimating department actually has nothing better to do.
It's often vital to help out in the interests of maintaining the relationship because these projects are sometimes presented to you by loyal customers who provide the business additional business.
monitoring prospective projects
Since many possible projects may not begin for several months or even years, it is crucial to keep track of them. Make a list that includes the project's name, contact information, the anticipated start date, and the project's estimated cost. The projects on this list should be broken down into those that will soon be put out to tender, those with medium-term possibilities, and finally those that will take some time.
To guarantee that you will be asked to submit a bid when the project is placed out to tender, keep the list updated and stay in touch with the clients.
It is possible to select the initiatives that are the most appropriate to pursue by keeping track of potential projects. The profit margin utilised while tendering may also be influenced by the quantity of viable projects, since it may become crucial to win the business if there are only a few. However, if there are lots of potential projects, there will be other chances if your offer is rejected, therefore you could be able to increase your profit margin.
Data bases and mailing lists
A database of potential clients, engineering firms, managing contractors, and architects should be kept up to date by contractors. These lists would contain the name of the business and the contact information for significant employees. These informational databases are crucial for distributing holiday greetings or invitations to corporate events. Project managers in particular should contribute to and keep this list updated, along with all senior management.
You might read in newspapers and trade journals that someone on the list has been given a promotion or transferred to a different organisation. Utilize this information to contact them and extend congratulations and best wishes for their new position in addition to updating the list.
Companies frequently create headlines or receive honours for unrelated causes. Once more, take advantage of these chances to stay in touch by sending out messages of congrats or even condolences if the business has experienced an accident on a project.
A handwritten note can frequently result in a lot of goodwill, so make sure these messages are issued by a qualified employee and aren't just generic letters.
Managers of Business Development
Business Development Managers (BDMs), who are responsible with seeking new potential projects and clients, are employed by many major firms. These can be helpful because they can spend time locating new endeavours and contacts, cultivating connections, and creating marketing materials. However, most businesses cannot afford to increase their overhead by one more employee.
The organisation needs to guide a large number of BDMs in the desired direction. These people have been spotted pursuing prospects and clientele that weren't right for the business. It's embarrassing if the contractor has to decline pricing the project after persistently pursuing the client for a tender and eventually receiving the chance to bid.
Senior management must monitor the contacts and relationships BDMs are building, as well as the marketing materials they are creating and disseminating, because some BDMs are unfamiliar with the construction industry or the capabilities of the organisation.
Trading licences
A contractor may not be allowed to submit a bid for some projects if they do not have the necessary certifications and credentials for specific trades, industries, or geographic areas.
Accreditations for quality, the environment, and safety
Larger clients want the necessary certifications demonstrating a contractor's compliance with the standardised quality, safety, and environmental systems and procedures. Even if it isn't defined, clients will almost surely verify this, and if it's not in place, it could hurt the contractor.
Sustainability and green construction
There is a burgeoning market for creating ecologically friendly structures in various nations. This is largely due to the building's design, which is typically outside the contractor's control. However, there is value in collaborating with architects and designers who can create ecologically friendly structures so that you can provide a whole product.
The building's construction process contributes to its environmental friendliness, and the following factors should be taken into account:
1. Reusing and recycling construction debris. 2. Sorting trash.
Utilizing eco-friendly materials requires consideration of: 1. their manufacturing process; and 2. their eventual use.
3. how readily they can be recycled at the end of the facility's existence; 2. the distance they must be delivered to the project; and 4. the quantity of waste
5. Toxins they may release over their lifetime, particularly when building
4. Making sure that vendors and subcontractors follow environmental laws and regulations.
5. Having strategies, policies, and processes in place for the environment.
6. Employing personnel who are dedicated to upholding the strictest environmental standards.
7. Reducing water and energy use during construction and eliminating waste.
There may even be accreditations available in some areas that can attest to a company's capability to construct green structures.
In the green field, there are additional chances to take into account, particularly in the area of renewable energy where there may be development opportunities. For instance, in the sectors of solar and wind energy, the contractor might either work with one of these suppliers or consider specialising in these areas as a specialist contractor.
upkeep, remodelling, repairs, and improvements
Despite the fact that many first-world nations no longer construct new infrastructure or facilities, a sizable number of the current structures are thirty years old or older and need replacement or significant upkeep. The market for rehabilitation, repair, and remodelling therefore has a large potential for work, and excellent contractors may have an endless supply of work.
Consider learning about new repair methods and goods in order to participate in this industry. Since a large portion of the current infrastructure lies underground, replacing or repairing it without having to dig up city streets may guarantee a continual stream of labour.
innovative techniques for contracting or tendering
By suggesting alternate contracting methods like these, it is possible to increase the company's competitiveness or the client's appeal.
Design and construction, and client partnerships
3. forming a bid consortium or joint venture with specialised suppliers or subcontractors
4. Entering into a target plus contract with profit sharing, in which the contractor and the client share in the benefits of new construction techniques.
an excellent standing
Module 13 goes into further detail about reputation. When a contractor has a good reputation, clients will frequently actively seek them out and invite them to submit a bid. Nevertheless, no matter how hard an effort is made to work on a project or with a client, it will fail if the contractor has a bad reputation.
References and testimonials from satisfied customers are quite helpful for marketing the business.
Saying no Sometimes clients ask contractors to take on projects that are inappropriate for their knowledge and experience, too big, too small, challenging, or required at a time when the company merely lacks the resources. You must learn to say no in these situations. This needs to be handled formally and sternly. Due to the aforementioned reasons, I've run into problems after agreeing to assignments that I really didn't want to accomplish. We lost money on some of these projects, but much worse, we used inexperienced people on some of them, which hurt our reputation. In most cases, the damage to our client relationships was greater than if we had just turned down the assignment in the first place. This doesn't mean you shouldn't try to assist your loyal customers, even if it means taking on work at a loss. Never, however, be coerced into working on a project that the business will later regret or that will cost it money.
Be upfront with the client about the reasons you can't estimate a price or complete the service. If you can, offer ideas on when or how the business might be able to complete the project.
Summary
Finding appropriate projects to bid on is crucial for all contractors. This entails:
1. conducting research by reading trade and financial journals, newspapers, and websites for clients, designers, and contractors
2. joining a database of tenders 3. marketing, including:
launching a website and creating a business brochure.
3. generating and handing out business cards 4. sending out business newsletters
5. using the right advertising 6. reaching out to and meeting prospective customers 7. putting up project signs
8. making sure company logos are on cars and equipment
4. Having customers recommend your business to other customers, project management teams, industry experts, their friends, or their neighbours
5. Using opportunities on ongoing projects to discuss new business ideas with clients, suppliers, designers, and subcontractors
6. being a member of organisations with centralised marketing networking 7.
8. requesting leads for potential projects from staff members
9. consulting with other experts including town planners, geotechnical engineers, and surveyors
10. requesting information about potential interactions from friends and family 11. compiling a database of prospective clients and projects
12. taking care of and preserving ties with current, reliable clients
13. Establishing joint ventures with additional contractors, some of whom may be nearby, to broaden the scope of projects that can be offered for bid or to add a higher degree of experience.
14. Developing new tendering strategies
15. Creating novel methods or expertise that will allow the business to penetrate a specialised or emerging industry.
16. Making sure the business has a solid reputation 17. helping customers with their feasibility studies.
18. Obtaining political support, which can be helpful at times, while always taking care to ensure its sincerity and avoiding corruption, bribery, or other improper behaviour
19. possessing the necessary registrations and accreditations
20. having the ability to submit bids for design-build projects and multifunctional projects
21. even if it is possible and acceptable, offer to finance projects
Accepting a project that isn't practical or suitable at the moment is sometimes required. In this process, care must be taken to avoid upsetting the client.
Section III: Tendering (Preparing the Quotation)
I've worked for organisations that sent out dozens of tenders each month without giving any of them much thought. We submitted bids for everything since we weren't picky. In spite of the fact that we really required the work, many of these tenders were rejected. The estimators put in a lot of overtime and were upset by the high failure rate. Additionally, the tenders were completed in such a rush that mistakes frequently happened. In many cases, our pricing was too high, which meant we lost the bid, while in other cases, it was too low, which meant we won the project but lost money.
Our tender applications frequently showed signs of hasty bid preparation. These gave a bad impression of the business and its skills, and despite having the lowest price, the client frequently rejected our submission.
One of the most crucial aspects of operating a construction company is tendering. Poor quality and an excessive pricing will result in the company losing customers and not receiving any orders. On the other hand, errors could lead to the contractor receiving a project at a lower price than it would cost to build, the schedule being impossible to meet, or the contract's terms being misunderstood, all of which could result in the company losing money.
It is crucial that the individual in charge of creating the tender is vigilant, examining it thoroughly for mistakes, and making sure it corresponds with the client's tender documents.
2. Has a working knowledge of the company's procurement procedure (this is often a propriety tender package system)
3. is knowledgeable with construction techniques (it would be pointless to, say, have a person familiar with electrical projects doing a tender for a road)
4. is knowledgeable about the resources and abilities that the organisation has accessible.
5. is aware of the rates of production, both for workers and for equipment (these rates will vary between nations, regions, industries, and even projects; for example, production rates will differ between first- and third-world countries; they may be lower working within an existing facility or in a controlled petrochemical or mining project compared to say,
on a city construction project)
An individual who had never before worked on a construction project and had been promoted from the position of general office person was hired by one of the companies I worked for to perform tenders. Without a doubt, this was a prescription for disaster because he lacked the expertise and knowledge necessary to comprehend how things were made. He finished the tenders, and we had to rework them.
The cost of errors during the tendering process might be very high.
Case Study: The civil and earthworks for a new gas power station, valued at $23 million, was one of my projects. We were a managing contractor's subcontractor.
The managing contractor only provided us with the paperwork they had obtained from the customer, which comprised the scope and specifications for the entire facility, including the mechanical and electrical works, because the tender documents were inadequate. The tasks we had to do were not given a different scope. The only drawings we were provided with were a contour map that showed the contours outside the plant's perimeter and an overall footprint of the facility that showed the layout of various structures.
While we verbally received instructions to allow for 1800 cubic metres of concrete, we were left to make educated guesses regarding the quantities of formwork, reinforcing, and subterranean plumbing.
We calculated the amount of earthworks needed to build the power plant terrace using the contour drawing. The Estimator had to make an assumption about the topography beneath the plant's footprint because the contour lines stopped at the plant's boundary. Our earthworks quantities were based on another layout drawing that was provided to us during the tendering process and showed a footprint reduction of 40%. There was no record that this drawing had been given to us.
It is now obvious that there wasn't enough information to estimate a work this complex, and what little information we did have was of low quality, some of it provided verbally or through "back-door" drawing flaws. However, the corporation chose an untrained project manager to estimate the task. He priced them and managed to put together something resembling a bill of quantities. He subsequently gave the managing contractor a lump sum price. The assumptions stated in the tender or the drawings that were utilised to determine the price were not mentioned in the tender submission.
As soon as I started the job, I discovered that the tender had a number of issues, including:
1. The managing contractor felt that we should have priced all of the requirements in the document for the entire project, and that we should have been able to provide site offices and facilities for them, the client, and other contractors on site. Our tender only allowed for the services and facilities required for our work.
2. When we assessed the site, we discovered that our assumptions about the contours were wrong and that the quantity of earthworks had significantly increased.
3. We made inaccurate assumptions about the types and amounts of underground plumbing.
Before we even started the project, these and other errors increased our expenditures by close to two million dollars.
From the aforementioned, it should be clear that the tender submission must: 1. defines what has been included and what has not
2. outlines the assumptions used to determine the price
3. should specify which illustrations and data were used to determine the pricing (especially if revised drawings are issued during the tender process)
Case study: One business asked project managers to estimate a variety of modest projects. This was unsupervised, and many of these ventures were financially unsuccessful. I discovered after looking into it that the projects weren't being priced fairly. To make sure that we only priced projects that we wanted, that they were priced consistently, and that the pricing was accurate, I developed a review procedure. We were more successful with our projects when we had better control over our tenders.
You shouldn't take tendering lightly. The size of projects that the estimating department can propose without senior management assessing the offer should be limited, in my opinion.
It's critical that corporations focus exclusively on the tenders they want to win and make every effort to do so at the lowest possible cost because preparing for tenders costs money.