A Bid Speaks Volumes About You and Your Company
Most businesses, at some point, are provided the opportunity to bid or quote on work. In some cases, it is occasionally and in other cases, an entire business model can be built on the ability of someone to bid and win work.
What is often not obvious is the cost, time and effort a company or individual puts into preparing a bid or quote. Depending on the type of business, bidding or quoting can equate to a couple of minutes and a few dollars or be tens to hundreds of hours and a whole lot of money.
If you are the successful bidder, then it can be argued that it was all worth it, but if you are not, then it is money down the drain. Sure, every bid a company does is the opportunity to hone your pricing and receive better intel about the market, in the hopes that you will be successful the next time, but it is still spent money today.
For this reason, it is important to make sure you are clear on when to and when not to bid or quote a project. Here are somethings to consider:
Is it the type of work you are known for?
Just because you have been asked to bid on work, doesn’t mean you should. Don’t veer too far out of what you are known for. You run the risk of not having the intel required to bid on the work effectively, wasting resources. Or you mix up your existing market, by trying to be everything to everyone. The consideration to bid on a different type of work, needs to be a strategic decision; on that takes in a lot of different factors beyond just an invitation to bid.
Is this work that you are profitable doing?
If you have done this type of work in the past and haven’t found yourself profitable then you have to question a couple of things. Is there adequate margin in the work that make it worth doing? Are you efficient enough (labour efficiency, having the right equipment, skills and knowledge, systems, etc.) to do this type of work? Tying up resources on unprofitable work, means you won’t be available for the work that you excel at.
Do you have an existing relationship?
Everyone of us has our “go to” people and the same goes for when someone is selecting the people they are going to ask to bid or quote on a job. It could be argued, that you will never become a “go to” person if you don’t bid, but rather than jump in on a bid, it makes more sense to get to know them a bit. Take the time to get to know who they are a company and don’t’ be afraid to ask them what they consider in a good “go to” person. Maybe there is a fit and maybe not.
Do you have the finances in place to take on the work?
It can be enticing to bid on big work. There can be a huge amount of upside, but depending on the size of your company, that upside can also be your downfall. The bigger the job, most times means that you need to have bigger reserves to be able to cash flow the work. It is okay to get extended a bit, especially as you are growing the business, but make sure you have a plan to do this. Don’t let you eyes be bigger than your stomach.
How confident are you in your ability to win?
Anytime you bid on work, you need to be confident in your ability to win the work. If you are not confident at the front end, trust your gut and let it go (either that or do whatever it takes, to get confident). You might not be able to pinpoint the reason why, but when you are not confident, then you don’t put your best price forward, you don’t put in the real effort, and you don’t showcase your company the way it deserves. As a result, you likely will be just wasting your time.
Every time you bid or quote on work, you are sending a message to potential customer about you and your company. You are telling them how professional you are. You are telling them whether or not you can follow instructions and are willing to meet their needs. You are telling them how competitive you are. Make sure you put your company in the best light, the next time you consider whether or not to bid on a potential opportunity.
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