bid for profit vs bid for work

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electricalist

Senior Member
Location
dallas tx
Our per opening rate is 160 ish and up.
I think we lose many bids to companies just trying to stay working..

We have suppliers and inside sale people.
What do I need to do different?
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
I don't know if the figure you cited is competitive in your area or not.

Some people are very good at keeping their costs as low as possible and you may never be able to compete with them when they really want a project.

No one can afford to accept work that does not make a profit indefinitely. That is just about a guarantee of eventual bankruptcy.
 

electricalist

Senior Member
Location
dallas tx
What are some factors that make significant price differences.
Material, can buying power be the reason?
Labor, I d say were are what is considered fair.
Methods, I can see this a a major factor.
Estemating, is just bidding from plans possible? Should bids always be walked?
 

iwire

Moderator
Staff member
Location
Massachusetts
Labor, I d say were are what is considered fair.

Are the companies that you are competing against just as fair?

I used to do a lot of bidding and it was tough to win as the company I work for has generous wages, benefits and a strong safety program That makes our average hourly cost pretty high in comparison to those I was bidding against.
 

kwired

Electron manager
Location
NE Nebraska
What are some factors that make significant price differences.
Material, can buying power be the reason?
Labor, I d say were are what is considered fair.
Methods, I can see this a a major factor.
Estemating, is just bidding from plans possible? Should bids always be walked?
Those are all factors that effect overhead of each competitor. If you want to make good profit you have to be prepared to lose some potential jobs, that is just the way it is. To make good profits you need to sell your company and why it is better then the others rather then sell based on low price, you will still lose some jobs, but some of them are the ones you didn't want anyway, they will try to cut into profits somehow, complain about the most minor things, and expect fixes for free when you gave them a little to no profit price to start with.

Now you probably can't be on this upper end of things all the time and need to work things out so you fall somewhere in between, but once you do have some regular repeat clients that value what you bring to them you can depend on them for more then just barely squeezing out a profit.
 

cdslotz

Senior Member
Our per opening rate is 160 ish and up.
I think we lose many bids to companies just trying to stay working..

We have suppliers and inside sale people.
What do I need to do different?


Do you know what makes up that unit price?
Have you sat down and priced up assemblies, say (1) 1P switch with: average wire type/length, device, plate. box, wirenuts, labor hrs, expenses...then add YOUR OH&P?
Or, does that price you came up with cover all devices (GFI, WP, duplex, 1P switch, 3W switch, light fixture outlet)?
 

electricalist

Senior Member
Location
dallas tx
Thanks for the replies.
Basically Im just an employee. My boss asked that we help him see what he may not see.
Its a small co. and we just try to be code compliant, keep up with the changing methods and material and basically do a good job. Kwire im laughing . Please instal this crappy fixture if you dont mind, since you re hear. Then they call cause it quit working. Jeez.
I do what I can to learn the better ways but honestly we usually lose on price. .
That tells me theres something wrong with our numbers.
 

Besoeker

Senior Member
Location
UK
Thanks for the replies.
Basically Im just an employee. My boss asked that we help him see what he may not see.
Its a small co. and we just try to be code compliant, keep up with the changing methods and material and basically do a good job. Kwire im laughing . Please instal this crappy fixture if you dont mind, since you re hear. Then they call cause it quit working. Jeez.
I do what I can to learn the better ways but honestly we usually lose on price. .
That tells me theres something wrong with our numbers.

Bidding to get the job and bidding for profit are not mutually exclusive - if you want to stay in business.
Bidding the job at a price that wins the bid loses money is unsustainable.
 

Cletis

Senior Member
Location
OH
around here guys are doing per openings for $40-$50. It's craziness. I'm around $80-$100 and get 3/10 jobs but I really don't care
 

James L

Senior Member
Location
Kansas Cty, Mo, USA
Occupation
Electrician
National average closing rate is 20%, or 1 out of 5. Someone leading a sales seminar once said "the best way to get your closing rate to 100% is to do all your work for free"

You can make money on volume, margin, or both.

McDonald's might make 50 cents on a hamburger, but they sell a half billion of them a year - volume
Mom 'n Pop diner might make $2.00 on a hamburger, but only sell 100 a day - margin


I have one simple principle when it comes to bidding, and that is to extract as many funds as possible.

How many funds can you extract? That's going to depend on many factors. Who are you working for? What type of work? Who are you bidding against? Many more, too.

If you're trying to do new residential work for low ball builders, competing against a guy working out of the back of a beat up pickup truck....hang it up and ask that guy in the pickup for a job. You'll make more money than he does

If you're doing commercial service work for reputable companies, they're expecting to pay $100-150 per hour.


You've got to know who you are, who your potential customers are, and who your competition is. You also have to know the variables of supply and demand.
 

kwired

Electron manager
Location
NE Nebraska
National average closing rate is 20%, or 1 out of 5. Someone leading a sales seminar once said "the best way to get your closing rate to 100% is to do all your work for free"

You can make money on volume, margin, or both.

McDonald's might make 50 cents on a hamburger, but they sell a half billion of them a year - volume
Mom 'n Pop diner might make $2.00 on a hamburger, but only sell 100 a day - margin


I have one simple principle when it comes to bidding, and that is to extract as many funds as possible.

How many funds can you extract? That's going to depend on many factors. Who are you working for? What type of work? Who are you bidding against? Many more, too.

If you're trying to do new residential work for low ball builders, competing against a guy working out of the back of a beat up pickup truck....hang it up and ask that guy in the pickup for a job. You'll make more money than he does

If you're doing commercial service work for reputable companies, they're expecting to pay $100-150 per hour.


You've got to know who you are, who your potential customers are, and who your competition is. You also have to know the variables of supply and demand.
That last sentence also applies to McDonalds you mentioned earlier. They are not going to open a franchise in a location that will not sell enough volume on a regular basis to be profitable. A little town of only 100 people isn't too likely to see McDonalds opening anytime soon unless there is some other factor involved that will help assure a large volume of customers will be there pretty regularly. The mom and pop diner in that same town has more to offer then MD, and does customize their offerings to the wants and needs of the village much more so then MD would. Those customized wants or needs may include things like, party rooms, catering, a bar or lounge, MD is MD and their offerings doesn't vary much at all from location to location.
 

iceworm

Curmudgeon still using printed IEEE Color Books
Location
North of the 65 parallel
Occupation
EE (Field - as little design as possible)
... The mom and pop diner in that same town has more to offer then MD, and does customize their offerings to the wants and needs of the village much more so then MD would. Those customized wants or needs may include things like, party rooms, catering, a bar or lounge, MD is MD and their offerings doesn't vary much at all from location to location.

Interesting note that has nothing to do with the thread:

The Dairy Queen in Kotzebue serves steak dinners. At least it did 20 years ago (last time I was there) Accordng to the manager (owner?) they are the fartherest north DQ and the only one in the US that sells steak dinners.

ice
 

kwired

Electron manager
Location
NE Nebraska
Interesting note that has nothing to do with the thread:

The Dairy Queen in Kotzebue serves steak dinners. At least it did 20 years ago (last time I was there) Accordng to the manager (owner?) they are the fartherest north DQ and the only one in the US that sells steak dinners.

ice
Many franchises will not let their franchisee's do things like that, but there can be exceptions or conditions that do allow for it.

We had a local Subway that when it first opened had a pulled pork sandwich that was very popular, but featured the pulled pork that was produced by a local meat processing company. They didn't have it for just too long and we never seen it or anything like it again until recent years when they had pulled pork offered everywhere. I once asked the local manager about this pulled pork they had when they first opened and she said when Subway found about it they made them stop selling it, they have to sell what the franchise says they can sell.
 

electricalist

Senior Member
Location
dallas tx
This "technique" will guaranty loss of customers...

Very true for both.
We have one customer who ask that we include in our bid money for unforseen issue. They then set asside an allocated fund that gets used for change orders. The amount left over becomes a " we did it under budget to the custome.r "
Others feel like they got jacked when the lights or emergency stuff doesnt pass co or fire marshall inspection. Because nobody told them and we both know why it was never in the plans to begin with.
My favorite. Because they trust us says just let me know the problem areas in enough time to explain it up the chain and let them risk it or pay for it.
 

Ravenvalor

Senior Member
How much does something cost? Answer: What the customer is willing to pay for it.

IMHO

Unfortunately when the government steps in and creates regulations the cost increases. Housing Banking and Medicine are 80% regulated while Technology is 20% regulated. This is because governments have not figured out a way to regulate Technology (in some areas of it). Whenever someone blames the free market on our Banking, Housing and Medicine woes I always laugh and say "You voted for the politicians to make those anything but free markets."

If you want an edge on your competition you need to design a tool or technique that will save you money on your job.
 

LEO2854

Esteemed Member
Location
Ma
Thanks for the replies.
Basically Im just an employee. My boss asked that we help him see what he may not see.
Its a small co. and we just try to be code compliant, keep up with the changing methods and material and basically do a good job. Kwire im laughing . Please instal this crappy fixture if you dont mind, since you re hear. Then they call cause it quit working. Jeez.
I do what I can to learn the better ways but honestly we usually lose on price. .
That tells me theres something wrong with our numbers.

Losing on price is not the real issue, it is how the job is sold, pricing work is a huge learning curve after mastering the mechanics of the electrical trade, selling the work is another huge learning curve.

Which quote will sell the job?


"Wire Building" $207,956.03

Or a long detailed description of the work that your firm will be doing, and all of the safety protocols Your Electricians will follow, along with following the 2014 National Electrical Code. "We employ professional licensed Electricians with many years of expertize in the electrical trade so you will be at ease with a top of the line professionally installed electrical system. etc,etc,etc...

The grand total for this project is $407,956.03:D
 

GerryB

Senior Member
Losing on price is not the real issue, it is how the job is sold, pricing work is a huge learning curve after mastering the mechanics of the electrical trade, selling the work is another huge learning curve.

Which quote will sell the job?


"Wire Building" $207,956.03

Or a long detailed description of the work that your firm will be doing, and all of the safety protocols Your Electricians will follow, along with following the 2014 National Electrical Code. "We employ professional licensed Electricians with many years of expertize in the electrical trade so you will be at ease with a top of the line professionally installed electrical system. etc,etc,etc...

The grand total for this project is $407,956.03:D

This was an interesting post. A small contractor, (3 guys plus him) told me "You make more money in the office then out in the field" Another even smaller contractor told me "There's two types of jobs. One of them takes a half a day and the other one takes all day:D"
 
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