As we continue our discussion on negotiated work versus bid work, we see that both approaches can help establish and grow a fire alarm business. The trick is finding what works for your company, depending on the industry and your career.
Here, we’ll dive a bit deeper into the pros and cons of bid work and discuss a few ways you can secure more contracts for your own company.
Pros and Cons
One of the biggest pros associated with bid work is that it can be very profitable—if you play your cards right. To succeed in the bid market, you need to make the most of the time it takes to prepare each bid. If you have a very skilled estimating and project management team, you become very knowledgeable about the costs associated with each bid, as well as how to structure them to streamline the process while still putting forth a competitive bid.
Another positive aspect of the bid market is that it can help new dealers establish their business, form professional relationships and prove the quality of their work—all of which can help lead to additional jobs in the future.
As for cons facing the bid market, perhaps the biggest one is a high number of competitors. Especially in the public sector, your company could be bidding against hundreds of others, which lowers your bid success rate. If you bid 100 jobs, you might win contracts for three. You have to ask yourself: Are we getting enough wins to make the bid process worthwhile?
The bid market is also more likely to experience slow periods, as many of these projects are linked closely to the strength of the construction industry. Finally, projects that bring in a lot of bids are more likely to be decided based on a dealer’s price—which is not always in the case with negotiated work.
Find More Bid Work
The most successful dealers realize that bid work is a time investment, both up front and throughout the bid process itself.
To find more bid work, it helps to get out there in the industry. Become a fixture in your local market: join industry associations, reach out to architects and engineers, and foster those relationships. You’ll not only get your company’s name noticed; you’ll also be among the first to hear about new opportunities, local projects that didn’t go quite right, new trends and more. Over time, you’ll become familiar with local codes and requirements and even the expectations of area inspectors. Doing this type of legwork up front will pay off when it comes time to bid on new projects.
Some dealers experience frustration when they lose bids solely based on price. In these cases, developing at least some level of relationship with the general contractor or owner can help you to distinguish yourself. And always pay attention to the areas in which you tend to win the most work. Sometimes, it pays to stick with what you know.
Finally, know your limitations. Resist the urge to go after all the high-profile projects, like the new city hall or refurbishing a historical building. These types of jobs can use up a lot of your resources in the bid process alone. Instead, find what works for you, and stick to it—even if it’s something like office buildings and apartments.
In this business, self-awareness is critical. Know your strengths and opportunities, define success on your terms, and stick with it.
About the Author
Steve McCurdy is Director of Business Development at Fire-Lite Alarms by Honeywell.