A reader to Roofing Contractor wrote me and noted that my articles regularly focus on residential sales and appropriately requested that I offer some insights into commercial sales. Only a few days later, I was conducting a seminar at which one attendee expressed frustration about his wasted time in the plan room of general contractors, which resulted too frequently in lost bids. My advice: Get past the plan room.
It is not a fact that price is the primary criterion in the selection of subcontractors, but is instead a belief that you must correct if you want to excel in commercial sales. The fact is that general contractors are primarily risk managers. Clauses in contracts hold GCs liable for delays, safety, warranties to work and more. If you want to really win more work with GCs, focus on minimizing risk and work within the reality of the bidding process.
The bids provided by subcontractors are not final prices by which the GC works. Instead the general project bid is part of the process by which the GC competes with other GCs in the market to earn the work. Thus the bids from subcontractors to GCs are not always the ones used when the GC selects subcontractors.
After the GC has been awarded the contract, subcontractors are selected based on the price, past experiences working with the GC and the credibility that the subcontractor brings to the table. Solid general contracting firms recognize that the bid price looks great on paper, but can be deceiving. The subcontractors that get selected are usually the ones with whom the GC has a proven track record of competence. A smart GC recognizes that the price paid to a roofing contractor is only part of the total cost of doing business. Delays, callbacks and other problems can dramatically run up hidden costs that destroy profitability on the project. To get past plan rooms, try these tactics:
1. Get to know estimators and project managers on a professional level. When they are not under pressure, estimators and project managers are more than willing to sit down and discuss their business challenges and your work capabilities. Schedule brief appointments to let them know about your company and your track record of success. It will help you get recognized when they select subcontractors.
2. When possible, walk your bids into the hands of estimators. It never hurts to deliver your bid in person. You may often be in a position to advise the general contractor on the aspects of the roofing project which raise red flags. This is the time when you can create powerful credibility that differentiates you from competitors and gets your bids noticed.
3. Bid early in the process. Last-minute bids are rife with errors. More importantly, you won’t be able to deliver your bids to GC personnel as the deadline for their general proposal is due.
4. Don’t panic when your price is not the lowest. Focus on the overall cost of doing business and recognize that your ability to get the job done on time is in itself a huge bonus to the contractor. If you have done a good job of building a solid business relationship, you will often get a second look at the project. More importantly, you’ll learn that you might not have to have the lowest price if you can ensure that the GC will gain the most profit by working with you.
The fact is that general contracting creates significant risks. The liability to get the job done right and on time is significant, especially when some construction contracts call for penalties worth thousands of dollars per day. Time is money. So take time to invest in relationships and remember to get past the plan room.