Dear CK: I’m new in business and interested in bidding for construction jobs in Nairobi area. How can I increase my chances of success? Dishon, Nairobi.
Dear Dishon: Your bid will have higher chances of success if you follow these steps:
Step 1: Get in touch with your potential customer. Arrange to tour the job site and evaluate the plans and specifications.
Step 2: Compile a list of required building materials and contact your suppliers for pricing and availability. Calculate the cost for materials including transportation charges and an allowance for lost and damaged materials. Markup your materials cost enough to earn your business some profit but make sure you remain competitive.
Step 3: Estimate the labour costs – including wages, insurance, as well as your costs for labourers compensation and benefits. Add your markup on labour to this figure. This will also be part of your gross profit from the construction job.
Step 4: Invite bids on any portions of the job that you will need to subcontract out. Markup your cost on subcontract labour slightly to cater for your administrative costs. Ensure your subcontractors are properly insured and that they have sufficient operating capital to carryout the job.
Step 5: Prepare a schedule for the construction project. Consider availability of labour, materials and subcontract labour. Allow cushion time for last minute subcontractor scheduling problems, bad weather, back orders and delays due to the client.
Step 6: Write out your bid for the construction job. Give enough detail so that the potential customer has a clear picture of what he is getting for his investment. Make sure that your proposal looks professional.
Step 7: Submit your bid to the customer. Provide references from your past clients. Also provide images of high quality work you have completed in the past. Importantly, show evidence that you, your employees and your subcontractors are properly insured.
Step 8: Spell out in your bid an estimated date of completion. Also indicate how you will deal with changes to the original scope of the project. Specify that change orders will be in writing, and that the cost of the change will be detailed and signed by the customer before you proceed. This protects both you and the customer.
Step 9: Ask the client to advise you on the best time to discuss the job. If it turns out that he wants to give the job to another contractor ask if you may compare bids. Offer to work with the client on cost if his budget is limited. You can suggest alternative materials or design options that will cut cost while maintaining quality. Source: eHow Money.
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