The Most Common Way Contractors Bid Jobs

Bidding jobs is the number one most important and critical part of ANY business. If you can’t do this correctly, it doesn’t matter how hard you work, how much you love it, or how much money you put in it, you will not survive for long. Imagine going to work every day and working for $10/hour and working 24 hours. You would be making money by working all day long, however, if your cost was at $11/hour you would still be losing money. The crazy thing about it is that there are so many companies out there that are living this scenario and think they are doing well because they are making $200,000 a year when actually they spent $200,001 that same year. If you want to get out of this cycle that will eventually lead to your business going under, you need to figure out your costs.

While figuring out your costs is essential, let’s talk about all the ways companies bid jobs that aren’t based on their cost. There are so many different ways that this can be done. Some are quite comical while others may seem like a good idea but will actually just lead to your prices being higher than necessary which won’t allow you to compete or to low which is costing you money. One of the most comical methods for bidding jobs is what I call the dart board method. This is when you get a dart board filled with prices and throw a dart and that is your price for the day. This may sound insane or funny, but it is as reliable a method as any that aren’t based on your cost. Another method for bidding jobs is using the competitions price to set your own. You find a high price and a low price and set yours in the middle assuming it sounds reasonable. This is VERY common and VERY dangerous.

These are just two of the methods used for bidding jobs. Don’t get stuck using these inaccurate methods that cause you to lose money. The key is finding your cost and setting your price based on it. If you don’t know how to find your cost, check out our website, we can help you find your cost based on your company’s specifics. For more methods, people use to bid jobs check out our video on YouTube.