According to the Small Business Administration, nearly 75% of business startups fail within five years, and the majority of failures happen in the first year. In the construction contracting world, it’s not any easier when contractors are low bidding jobs, so they have work.
However, what benefit is there in having a “job” if you can’t make enough money to pay your business’ bills and provide yourself with an income?
Yes, you must be competitive, but you don’t need to be the cheapest to win the job if you can demonstrate why your price has value to the prospect.
Over the year, there have been countless local and national news stories about unscrupulous contractors who won a low bid and got caught operating without a license, or they never completed the work. Or, worse yet, the quality of their work was shoddy at best and ultimately cost the client more money in the long-term.
How can you compete by increasing the value of your profits without being the lowest bidder?
Value, Value, Value
People love a good deal and they love getting value for their dollars.
As it was said by Jerry McGuire… “Show me the value!”
Okay, he was talking about money… but we’re talking about value.
What you can do for them that cost you virtually nothing but makes your prospective client feel like they got something that was valuable to them?
Here is the key to value…
Value isn’t underpricing and then springing a bunch of new costs on them.
Contractors with integrity offer a thoroughly thought out estimate the first time and include specific details of all materials and work needed.
Then, offer to go above and beyond. Offer them some free advice that inspires their confidence in you or something they want that doesn’t cost you much and makes them feel like they got a lot for nothing extra.
The effort will pay off big time and you will have happy, friend sharing, long-term clients that will use your service over and over again.
Trust is the Key to Any Relationship
It doesn’t matter if you’re bidding the first time or the one-thousandth time – trust is the key to winning bids without being the lowest bidder.
Establishing that you are trustworthy, dependable, reliable, and do great work goes a long way to a decision-maker feeling confident it’s in their best interest to hire you… even when you’re not the cheapest one.
Often times, decision-makers who want to hire you but must bid may even give you tidbits of information to help you create a bid that separates you from your competitors.