I recently read a white paper talking about the business of construction. The paper was a good read and had valuable info. However, there was a point that I disagreed with. The paper talked about what a contractor would need to do for robust revenue growth. Some of the items listed go against what we advise to our clients.
The item I challenged the most dealt with bidding work that is outside of what you normally do. The white paper was suggesting this was a great way to make more money. I feel that this is bad advice, since the margins are usually razor thin in the bid market. If you make a mistake on your bid because you are not familiar with that particular kind of work you are doing, you can end up with a really bad project.
There are a couple of different ways you can go about expanding your field with considerably less risk.
- If you want to increase your line of work, see if you can negotiate a project instead. You may have more success than with a bid. The margins are usually better on negotiated work and there can be more breathing room for risk.
- The second way to successfully bid work outside your comfort zone is to hire an independent estimator! At Tempest Company our estimators are highly qualified and experienced in all areas of the construction industry. You can be confident that you have the right numbers while you grow your construction opportunities.