How to Confidently Bid on Larger Construction Projects

If you aim to take your construction company to the next level by bidding on larger projects, confidence is key. But this confidence can't merely be faked—it needs to be underpinned by strategic planning, thorough understanding, and meticulous preparation. In this blog post, we break down the eight critical components you need to address to bid on larger projects and scale your company effectively.

Know Your Current Condition

Evaluating the State of Your Business

Understanding your current condition is the cornerstone of scaling up. This involves a raw and often uncomfortable self-assessment of where your business stands today. You may think everything is going smoothly, but without external perspectives or a deep internal audit, you may miss out on areas that need improvement. Cash flow is a fundamental aspect to monitor: if you're facing issues now, they will only exacerbate with larger projects. You need to truly understand what's working and what's not working TODAY so you can remove any obstacles and create more flow in within your company as you grow.

Importance of Team Dynamics

People are another pivotal factor. Poor retention, ineffective communication, and lackluster performance often stem from inadequate compensation packages OR a toxic company culture. Take the time to dissect the dynamics within your team and understand why issues are arising. A happy, cohesive team is vital for scaling successfully.

Structuring Your Company

Role Clarity and Communication

Without a robust structure, growing your company can lead to chaos. Every employee must understand their role and responsibilities, and inter-departmental communication should be clear and efficient. Ensure your organizational structure can handle the increased complexity that comes with larger projects. I usually find many owners haven't been in a salaried position or it's been many years which results in them not fully understanding the roles they need to hire. That's OK, we don't have to have all the answers. However its important to get the outside help you need to assist you in this topic. You must fully understand who your next hires should be. You must have the right people in the right positions or else your projects will suffer.

Adopting the Growth Mindset

Shifting Mental Models

The mindset of both the owner and employees has to evolve as the company grows. Delegation becomes crucial, and you'll need leaders who can handle larger responsibilities. It's vital to scale up the skills of your workforce and adapt your management style to cope with larger, more complex projects. A business owner or PM or Super or Estimator in a $3 MM per year company is a much different person in a $30 MM per year company. Training in leadership and training at the required skills needed to grow as a person and professional is mandatory if you want to take your company to the next level.

Creating a Roadmap

Strategic Planning

With an honest assessment of your current condition, the next step is to develop a comprehensive plan to get from point A to point B. Getting a full understanding of your strengths and weaknesses and knowing what opportunities lie ahead and HOW your going to seize those opportunities will give you much more clarity on this exciting journey. This roadmap should outline the small, incremental steps needed to achieve your larger goals. This doesn't mean leaping from $5 million single projects to $25 million ones, but rather a phased approach that steadily increases project size and complexity.

More about strategic planning can be found here.

Taking Small Steps

Gradual Scaling

Taking incremental steps is crucial. Jumping directly into massive bids can be risky and counterproductive. Instead, begin slightly increasing the project sizes you bid on, allowing your team to adjust and grow their capabilities slowly.

Subcontracting Solutions

Mitigating Risk with Subcontractors

Subcontracting can be a viable strategy to manage risk, but due diligence is essential. The relationship with your subcontractors should be solid, and their financial stability should be verified. Poor performance from subcontractors can severely impact your project's success, so vetting and maintaining healthy relationships with them is imperative.  The lowest price isn't always the answer but unfortunately lower numbers get you more work. Choose your subcontractors wisely. YOU must fully understand their scope and ask the right questions before bidding to increase your confidence. Also, ask if they are bondable!

Financial Preparedness

Cost Management and Risk Assessment

Larger projects often introduce new scopes of work and complexities. Ensure you account for all potential costs, including overhead and borrowing costs. Profitability should not be compromised for volume. Accurate cost estimation and financial preparedness are key to ensuring the project's success.

More about identifying risk can be found here.

Leadership and Accountability

Appointment and Oversight

Placing the right people in charge is non-negotiable. As mentioned above and very important to mention again, the project manager running a $10 million project is not the same as managing a $25 million project. Owners must be aware of their limitations and compensate by hiring knowledgeable leaders who can manage these larger endeavors. Tapping into young talent early and having an open conversation about their future is very important. You'll want to fully understand what training, mentoring, and resources your current and future leaders will need to be successful.

More about hiring and developing great employees can be found here.

Tracking and Continuous Improvement

Data-Driven Decisions

Tracking all metrics meticulously ensures that you understand which strategies are working and which aren't. This helps in refining processes and avoiding the repetition of past mistakes. Regularly reviewing this data fosters continuous improvement, ensuring that each new project is an improvement over the last.  Having real-time data helps you make informed decisions quickly saving you many lost months of productive work and will keep your cash flow and profits in check.

The Path to Sustainable Growth

Achieving substantial growth in the construction industry requires more than just ambition. With a clear understanding of your current condition, a solid structural framework, strategic planning, gradual scaling, and stringent financial oversight, you can bid confidently on larger projects. Remember, success is not just about expanding your business but doing so sustainably and profitably.

By applying these principles discussed by Jerry Aliberti on Pro-Accel, you'll be well on your way to scaling your construction company to new heights.

To schedule a Free Consultation with Jerry, you can email jerry@pro-accel.com or click on the blue button below and schedule directly!