Sub's with Overhead vs. Low-Ball Bidder
Case No. 2009-2011
In today’s "price shop" orientated society, subcontractors must work on ways to provide the best bid number and still produce better customer service. Whether that customer is the general contractor, project owner, a homeowner with a leaky toliet or a condo manager who needs a fire sprinkler inspection. As a Florida commercial plumbing and fire sprinkler contracting company, we changed our way of doing things to stay in front of our customer and still providing excellent service. Your past successes may have been good but now you need to continue with:
- Gain better awareness of how our company is perceived by the customer
- Provide what the customer is seeking from our service
- Determine at what cost to overhead
So where does that point someone looking to sell their overhead and improved customer service in our industry filled with low bidders?
With that data in the bid, you know it’s correct. Well, all bid estimates are wrong so, more correct. Revisit this several times during the job.
- Determine what is your true cost of a job?
- What labor hours you have on the estimate versus hours off the time cards?
- Have you included the overhead burden for office staff?
If not, you might be missing the true cost to offer and maintain good customer service and might not be managing those costs efficiently.
We have to ask ourselves, "does the consumer want a fire suppression system installed by a contractor focused on excellent service and quality or the lowest bid number?"
The established subcontractor with an overhead-burdened cost structure may not have the lowest bid but I know will provide a better service and complete working system. They chose to seek good business relationships and work for and with a team that recognizes having a well-established subcontractor specializing in installation, repair and service. Unlike their low bidder competitors, they are able to maintain a staff of highly trained craftsmen, consultants and experts, so every job receives the attention of skilled masters with a singular goal: getting the job done right. It is a cost and the time to educate the buyer that they should want:
- Better bid accuracy
- Meets or exceeds the construction schedule
- Subs that will construct a good product for the owner’s intended purpose
- A vendor that will be in business to offer future maintenance and service
At the end of every job, everyone evolved has made an investment. Knowing most reflect on that investment when closing a job file…should you follow up with those that took the low bidder when their project completes? Maybe your company might make their project manager’s buy out list on their next job.