Masons: Use Your Bid as Bait

By George Hedley

Does this sound familiar? “It’s impossible to compete in this tight construction market as there’s always too much competition.” “The only way I get any jobs is when we leave too much money on the table.” “I get tired of cutting our bids to beat the competition.” “How can we ever make enough money to survive?”  

I have been hearing these same complaints about the construction business since 1977, when I started my general contracting company. It seems as if nothing changes as contractors continue to compete against low-price competitors.

Bid like you fish

Before you go fishing, you need the right bait to lure the fish to bite. Think of your bid as tasty bait customers will want to bite, so you can land a juicy contract. When you fish, your goal is to catch either the big one or lots of fish. So you look for the secret fishing holes where they bite.

When looking for profitable projects to bid to, you must seek opportunities that will give you the best chance to make the most money. When you finally catch a fish, you can reel it in, weigh it, and decide if you want to keep it. After you submit a bid and get the call to cut your bid or match a better price to get the job, it is your choice to accept that offer as well.

When you go fishing and they aren’t biting, what do you do? You try different fishing techniques, change your bait, or move on to another fishing hole. But stubborn contractors don’t look elsewhere when they don’t land enough contracts. Most contractors just keep bidding to the same customers over and over, using the same bait and proposal strategies as they’ve always used.

Contractors often think if they bid enough the same way, eventually they’ll get their share. This effort won’t get you the positive results you want. Like fishing, you must change your estimating and bidding strategies to get the big ones to bite more often.

Bid-hit ratio

Bid-hit ratio is the rate at which you successfully bid or propose on projects. For example, a 5-to-1 bid-hit ratio states for every five jobs you bid or propose on, you are awarded only one. In a survey I conducted of more than 2,000 construction general contractors, subcontractors and design-build companies, less than 10 percent know and track their bid-hit ratios.

Do you know what yours is? In order to determine how many jobs to bid, what type of jobs to go after, and which customers give you a higher percentage of their work, you must know your bid-hit ratio for these different categories. Track it by types of projects, customers, job type, job size, and project location. As you study your bid-hit ratio trends, you'll find certain customers give you more work than others, and you'll find you do better with certain kinds of jobs.

Offer what customers want

Think about what you include in your typical proposal or bid: price, terms, scope of work, specification section number, inclusions, exclusions, a list of the plans and specifications, and payment provisions. These facts and figures don’t take into consideration what your customer really wants. Sure, he wants a low price based on an "apples-to-apples" scope of work, but what else?

Customers may value these things more than price:

Ability and experience: understanding the plans and specifications, reputation for excessive change orders, in-house design and value engineering, and experience in similar projects

Customer service:  trust with a delicate customer, service department, flexibility and response time

Solid workforce: properly trained professional field crews, foremen who can make decisions, large-enough crews, ability to make the schedule, and quality workmanship

   

Image: great safety record, maintain clean jobsite, jobsite image and uniforms

Financial security: financial strength and bonding capacity, payment schedule and need for cash.

Every project has unique requirements, which often are more important than price. Before you start working on an estimate for a customer, Always ask the decision maker what’s important on this job. Then, custom design your bid proposal accordingly. Highlight the differentiating factors, and make it clear that their priorities are the same as yours.

Use your bid as bait!

Remember your bid is bait to go fishing for a contract. The main purpose for your bid is act as bait to get a meeting with your customer. At this meeting, you can discuss the project in depth, review how you can help your customer meet goals, explain why you are the best choice, review pricing options, get a second chance to be the selected contractor, and get last look.

George Hedley works with contractors to build profitable growing companies. He is a professional business coach, popular speaker and best-selling author of “Get Your Business to Work!” available online at www.HardhatPresentations.com. To sign-up for his free e-newsletter, join his next webinar, be part of a BIZCOACH program, or get a $100 discount coupon for online classes at www.HardhatBizSchool.com, email GH@HardhatPresentations.com.

George Hedley           

HARDHAT Presentations, 800-851-8553  

Top 2 Priorities for Your Masonry Business

By George Hedley

Several years ago, I made a resolution to take charge of my business life, put my priorities first and focus on building loyal customer relationships. I committed to work smarter, get organized and in-control, focus on the 20 percent that produces 80 percent of the results, delegate as much as possible to my employees, spend 33 percent of my time with customers, and get home at decent time.  

When Monday morning rolled around, I was excited and got to work early. I made a list of all the things I had to do and prioritized them into three categories: must do, should do, and don’t have to do. Then guess what happened at 8:30 a.m.? I started to get calls and emails putting demands on my time. People were requesting I attend meetings, customers had immediate needs, superintendents were having problems with subcontractors, the concrete crew was sitting around waiting for concrete, and one of our trucks had broken down. So I did what I always do: I went out and attempted to fix everyone else’s problems for them.

When I finally got back to the office at 4 p.m., I realized I had missed lunch and my desk was piled with at least 25 new requests, notes, invoices, voice mails, and files requiring my immediate attention. So much for getting to my priorities! Then, my best customer called and asked me to play golf with him at his private country club the next morning. He wanted to introduce me to his banker and talk about his next project. How could I play golf? I didn’t have enough time in the day. I have to fix everyone’s problems and put out all these fires.

The Top 2 business priorities

Decide to be bold. Do what you know you have to do. What are your top priorities? Are they in your calendar? Are you going to do something about them? In order to stay focused on what will make the biggest difference in your business, step back and take a hard look.

In my opinion, business is simple. The two most important priorities are to find customers and then keep customers. Finding customers involves everything to keep profitable revenue coming in the door. Finding customers includes sales, marketing, estimating, presenting proposals, customer appreciation, schmoozing, networking, and what you do to build loyal customer relationships. This area is often overlooked in construction businesses. Most construction company owners focus on bidding work, and then getting it done. As a top priority, finding customers cannot be delegated easily. Customers want to know who they are doing business with.

Keeping customers is all about doing a good job and meeting your customers’ expectations and contractual requirements. This top priority is an outcome of a well-organized and systemized operation led by a professional management team and well-trained employees. This area of your company can be managed by a professional management team that implements your business mission, philosophy, organizational systems and procedures. But, without great systems in place, delegating operational tasks is impossible.

Hire pros to grow

Here’s an email I received from a plumbing and heating contractor in Santa Fe, N.M., who saw me present to a large group of local contractors. He wanted to share some things that work for him: “Fire the idiots! But, more important, I found two top-notch working foremen and convinced them to come to work for me. I had to offer them about a 50 percent wage premium over market wages. I had to raise my open hourly rates significantly, and I charge them out even higher on bid work. Guess what? Virtually no customers were lost, my percentage of really excited customers soared, and I was free to do what I do best: sell jobs! They run their jobs, ask me an occasional question (perhaps just to flatter me) and I give them free rein. After this experience I realized that if I have to go to a jobsite for a reason other than boredom, curiosity or public relations, I don’t have the right man on the job. Find the right people, give them the right resources, set ‘em free, and never look back!”

The fastest way to get your company organized and focused on keeping customers is to hire the best and give them the task of getting the work done. Great people do cost more money, but take less time to manage than weaker ones. Plus, you’ll never be able to get your business to grow beyond the capacity of your top people. Professionals will make you money. You can’t continue to do it all yourself. Sell your truck or backhoe, lease a used one, take the money, and hire a professional to help you.

Put your priorities to work

Don't just talk about it, get started and do it! Continually ask yourself if what you’re doing is a good use of your time and money. When you do things you shouldn’t be doing or don’t like doing, your business becomes a drag. Activities that are not rewarding drain your energy. Exciting tasks and activities included in your top priority list are rewarding and actually invigorate you. When you are moving toward your goals, improving your business and seeing progress, you will get excited about your future. What are your Top 2 business priorities? Remember that your #1 priority is to keep your No. 1 priority as your No. 1 priority!”

George Hedley is a licensed professional business coach, popular professional speaker and best-selling author of “Get Your Business to Work!” and “The Business Success Blueprint For Contractors,” available at his online bookstore. He works with business owners to build profitable growing companies. Email gh@hardhatpresentations.com to request your free copy of “Winning Ways To Win More Work!” or sign up for his free monthly e-newsletter. To hire George to speak, be part of his ongoing BIZCOACH program, or join one of his ongoing Roundtable Peer BIZGROUPS, call 800-851-8553, or visit www.HardhatPresentations.com.

George Hedley, HARDHAT Presentations

 

Five Things You Must Do This Year

By George Hedley

We are almost one month into 2012, and things are already moving too fast. Hopefully, you took a few moments and wrote out your goals for the next 12 months. Written targets and goals will insure you get what you want, by keeping you focused. Less than 20 percent of all business owners actually write out their goals. And guess what? These top 20 percent are in the top 20 percent of the most successful business owners in their marketplaces. A simple way to start is to write out these five goals:

1. Don’t be an island

Get involved with a group of like-minded business owners to seek advice, share challenges, get invigorated, and get accountable with on a regular basis. Personally, I made a decision to join a structured weekly group of men who discuss their personal and professional lives facilitated by a top business/life coach in our area. Bottom-line – do it!

2. Take time to plan your plays

Bill gates said that the best thing he did while building Microsoft was to take his management team away on a regular basis to plan for the future. At these regular retreats, they discussed their strategy, options, new opportunities, what’s working, what’s not, and what they need to do to achieve their goals. When you don’t plan your future, you get what the market gives you instead of paving your own path.

3. Innovate or die

Your business won’t work, if you're doing what you did when the economy was growing. In a flat economy, you have to change your business and evolve into a new kind of profit-making machine. What new customers, markets, systems, technology, people, production methods, contract type, services and products should you add or delete from your business to grow fast? Sit down and rate every part of your business as: keep doing, stop doing, start doing, or change how we do it.

4. Revamp your calendar

Your calendar says it all. If you want to save money, your calendar is full of job meetings, ordering materials, scheduling crews, and doing take-offs. If you are focused on making money, it’s full of time with loyal customers, new customer targets, networking, mingling with potential customers, and building relationships. At least 33 percent of your time needs to be with customers having fun and enjoying each other. Make it your goal to revamp your calendar and pro-actively grow your business.

5. Put yourself first

When I coach business owners, we always look at the income statements to see how they are doing. I almost always notice that business owner pay themselves way too little for the time, risk, and work they perform. In addition, their investments are often slim or none. When you put other people, employees, and customers ahead of yourself, you can’t do the best you are capable of. Customers want to do business with successful people, not poor struggling people. Make a commitment to pay yourself what you are worth and start an investment program starting now. Then spend the rest on overhead and expenses.

George Hedley is the best-selling author of "Get Your Business to Work!" available at his online bookstore. As an entrepreneur, popular speaker and business coach, he helps business owners build profitable companies. Email George to request your free copy of "Business Tools To Boost Your Bottom-Line!" or sign up for his free monthly e-newsletter. To hire George, attend his "Profit-Builder Circle" boot camp or be a part of an ongoing "Construction Business Owner BIZ-GROUP." Call 800 851-8553 or visit HARDHAT Presentations.