How to Price for Your Construction Projects

The first (introductory) article of this four-part series concerning building an excellent bid package titled Knowing What to Bid on a Construction Project, promised a deeper dive into the subject. In this second part, the focus is on analysis.

Price for Your Construction Projects Through Analysis

Before determining what to bid on a potential construction project, you must carefully analyze several aspects of the project and (just as importantly) of your construction company. For example, does your company have the capability and the capacity to deal with the project’s scope? Further analysis must be carried out concerning the following:

• Potential risks

• Market conditions

• Projected profit margins

Price for Your Construction Projects with an Analyzing Tool

In the construction industry, there is a well-known but underutilized tool based on an accounting method known as job costing. Look at job costing as a tool that allows you to Measure and Monitor, Weigh and Watch, and Quantify and Qualify the expenses and revenue tied to a single project. Here are a few of the other ways the job costing tool helps you analyze essential aspects of your construction business:

• Job costing shows you what margins you’ve been sacrificing on past estimates.

• You can factor overhead expenses through job costing to understand individual job profitability or loss better.

• You can identify your construction company’s most and least profitable areas through job costing.

• Job costing allows you to analyze where you’re spending so you’ll know more about what works and what doesn’t.

• You can look for which types of jobs are your bread-and-butter through job costing.

• Job costing helps you comply with regulatory requirements, such as tax reporting and contract compliance.

When you use the job costing tool, you can carefully analyze reports for completed jobs and jobs in progress.

Price for Your Construction Projects with Confidence

By optimizing your analyzation capabilities using your job costing tool, you can move from uncertainty and doubt concerning bids to confidence and boldness. That doesn’t mean you’ll get every job you bid on – heck no – but it does mean you’ll be better prepared for successful job completion on those you do win. Reducing the risk involved in any construction project through a thorough analysis of profit expectations, expenditure forecasts, and revenue outlook puts you in the driver’s seat for building bids that help you grow your construction contracting business.

What’s Next?

The third post of this four-part series concerning bid building will emphasize having a Spending Plan and a Billing System.

Ambitious Construction Contractors look to The Profit Constructors to provide advocacy in dealing with:

• Clients and customers

• Employees and subcontractors

• Vendors and service providers

• Governmental entities

Working with The Profit Constructors gives Construction Contractors the means to organize their operations in ways that help them:

• Remain informed

• Avoid hassles

• Reduce risks

• Be future-ready

Ready for action? Or want to know more? Get in touch today to schedule a complimentary discovery call. 866-629-7735