Winning a bid is not as easy as it seems from the other side of the river. It is time-consuming and labor-intensive. But if you want to grow your small business then winning a bid could be a turning point for you. Freelancers mainly from the trade and creative industry rely on it to find a gainful job.
Many organizations associated from nonprofit to federal agencies to even large corporations, submit requests for bids for potential contractors and bidders. Next, the contractors approach and send a proposal or offer in response. So if you want to know how contractors make bids? This post will provide complete information regarding it.
Step 1. Acknowledge Your Skills And Demand For Project
Only because you got a prospective client requested you bid on the task, it does not obligate you to do so. Creating and submitting bid documents demand time and labor. So go for that only if you are truly interested and invested in the project. Along with that your expertise and experience are essential too, for winning the bid.
Check if you can meet the following conditions:
- You have access to information that others do not. You know an insider or you assisted the company to develop an RFP.
- Your particular skill set and expertise are ideal for the project. If yes, then you are the appropriate candidate for the job.
- Additionally, you will need funds in your hand and do not have any ongoing projects.
Step 2. Arrange Meeting with Client
Reread the RFP and make a list of questions you want to ask the potential investor. Now schedule a meeting with the client. Not every firm will agree to a personal meeting, but it is for your benefit. It will determine if the project is worth your time and your expertise according to it or not. However, a telephonic conference is also workable. Send an email requesting a meeting and do as soon as possible. If the client doesn't agree chances are less to get hired for the contract. The positive side is that at least you know about the situation.
Ask the following questions during the meeting:
These questions will help you to understand the expectations of the client and let you demonstrate your expertise and knowledge. Be honest to yourself and polite to the customer.
- Why approached us to bid for the project.
- How many bidders you invited to bid for this contract.
- Why this project being undertaken at this time. What are the prevalent reasons?
- Contat someone professional like XFactorGov who can assit you submitting government contracts.
Step 3. Costs Calculation & Estimation
Correct estimated costs ensure success and generate profit on completion of the project. In the brief list down supplies, materials and services need for the project. Determine pricing with a 10-15% service charge. Multiply your hourly rate as per the number of hours that project will need. Refer to your experience.
Add input material cost into labor expense, transportation charges, insurance, and other overhead expenses, if applicable. Add margin for if things might go wrong. The final cost should be reasonable and within the client’s budget. Adjust accordingly to make it acceptable from both sides.
Step 4. Calculate Profit Margins
Only charging material and labor can lead you to the loss. You must add a percentage to the price of overhead and expected events. Overhead will include tools to buy, marketing expenses. Depending on the requirement you can deduct these expenses off. The cost should be market observing industry.
Undervaluing your services will put you at a loss. You might win the bid by underbidding your competitors but it will not be beneficial, lucrative in the long term sustainable business.
Step 5. Share and Pitch your bid
You should not simply email your offer, but pitch it properly. Ask the client if you can meet with them in person or on a phone call. You should explain the stated services, charges along with quantities. Explain to them why your amount is greater or lower than your competitors.
Conversations between contractors and clients help to avoid miscommunication and let the client understand and ask more questions about the project. It also helps bring a personalized experience to the bid documents.
We hope that these above-mentioned steps and the keen observation will help you out to get a profitable bid for your business. Keep learning about new strategies and get inspired by the mentors and experts of the bidding domain.