Looking for a way to bid the next job without guessing? Steven Palmieri, a Tax CFO, starts from a plain rule. A price built from what the last jobs really cost is worth more than one built from memory, and far more than one built from a competitor's number.
A bid is a promise about the future, and the only evidence you have is the past. When each cost has landed on its job every month, you can look up what a similar job actually took. How many labor hours, how much material, what the subcontractors charged, how long the equipment sat. That is the base, and a competitor's number never tells you any of it.
Without it, the bid comes from memory, and memory is generous. It remembers the jobs that went well and forgets the week lost to a delivery.
A price has three layers. The first is direct cost, meaning the labor, materials, subs and equipment the job will consume. The second is a share of overhead, because the shop, the trucks, the insurance and the supervisor all have to be paid by someone. The third is the margin you choose to keep for the work and the risk.
Many bids fail at the second layer. Overhead is real, but it is not visible on any one invoice, so it gets skipped. We set a simple rule for it, apply the same rule every time, and show you what the bid would be without it so you see what skipping it costs.
A bigger job pulls cash out of the business before it pays any back. Materials are bought and payroll is run before the first draw arrives. A customer may then hold back a share, called retainage, until the end. So a profitable bid can still strain the business for months.
Say a machine shop quotes a $90,000 order that will cost $72,000 and leave $18,000. This is a made-up order with round numbers. If materials of $30,000 are due in the first two weeks and the first payment comes in 45 days, the owner needs that cash on hand, and the plan needs to show where it comes from. New work coming to the airports, including a hub being set up at Alliance by an electric air-taxi company, can mean bigger bids for the shops around them, and bigger bids mean bigger gaps.
Sometimes the bid works on paper and still should not be sent. If the margin falls below what your own history says you need, say so plainly. If the job demands cash you cannot carry, or a crew you cannot spare, say that too. If the customer's payment record is poor, the price needs to reflect it, or the job should wait. Saying no to a bad job leaves room for a good one.
We bring the numbers, and you set the price. You know the customer, the site, the risk and how much you want the work. We know what similar jobs cost you. Put together, those two pieces of knowledge make a better bid than either one alone. Before you commit to a larger crew for the work, read growing the crew without guessing.
Costs on the right job are the foundation, and the page on which jobs make money shows how that picture is built. A job that is already underway needs a different view, and work in progress and retainage explains it.
Price your next bid with us before you send it, on a free Second Look call. No paperwork and no payment.
You will be talking to the Steven Palmieri practice.