Marketing and Selling for Commercial Work
I always get the follow up calls. "Your numbers looks good", "you seem competitive" - stuff like this boosts my confidence in thinking I may be expanding quickly, but two weeks later Iím leaving phone messages, sending emails and getting treated like a leper. I have good references in the companies Iím attempting to get involved in but itís been happening time and time again since I got into the commercial world.
Is it just that long of a process? Do I have to wait longer to get a response? If so how long would it take for someone to get back to me with some solid information? Is it possible that my bids just arenít cutting it? Even though I receive follow ups, or am I not meeting some hidden expectation? Am i expected to write up a detailed scope sheet for an entire hotel? Hopefully you all can help me out.
Project managers put a lot on the line whenever they award a bid. Most, although some will, don't go for the low bid. All will try and beat you down on the back side.
The point is that if they are faceless to you, then you certainly are faceless to them. Good luck. I personally know of one project manager who will send out RFQs no less than ten times before seriously considering a new contractor. His thought process is that if the guy is persistent enough to continue giving bids after six months, then he will most likely be around to finish the job he is awarded.
From contributor J:
I agree with contributor W. Years ago I would walk into a job trailer and introduce myself. Confidence and trust will get you on a bidder list, go to your local agc plan room and look for jobs you know you can do, get informed about the job and go get it!
From contributor E:
The commercial market has a lot of differences with the residential market. Your payment is going to be way out. Forget the deposit that will not happen - 60 days sometimes but more likely 90 or 120, if you do a school you are looking at maybe a year before you get your last 10%. One problem with the commercial market now is that all the residential guys are trying to get into that market, making it even more competitive.
I do agree with some of the other posters, you need to be patient and keep submitting bids. Most of my experience is that the low bidder is the one who gets the job. We would all like to think that the contractor selected us because we are good don't kid yourself.
Another thing about this market is that you have to be very "lean" in your manufacturing, if a person is still putting their boxes together with biscuits and glue youíre not going to be very successful.
From contributor J:
Oh and you are about to learn a word called "value engineering"!
From contributor E:
That's about right. It means it's your second attempt to get the job, now how much can you cut off your price?
From contributor W:
Contributor E is correct about having a production mindset. The commercial word doesn't give a care about craftsmanship. They want it to look good of course, but they are willing to accept "issues" as long as the project stays on schedule and under budget.
From contributor R:
We do almost entirely commercial work, both public and private. I track our win rate very carefully and it stands at about 26% over the last 8 years, year in and year out.
However, if we were to track only the public work that appears on the Construction Reporter or Dodge, our win rate would be about 5%. We continue to bid this work because it's usually easy to do, and we often get jobs 6 months or a year later when the low guy doesn't show up.
Once the project is bid there are a number of different things that happen. On public jobs, weeks may elapse before the job is awarded to the general contractor because of laws requiring the bids to be presented to a city, county or state governing body. If the low general bid is still over budget, there are laws, rules and procedures for negotiating, rebidding etc. that can cause delays. Once it's awarded to the general it may take weeks to get contracts processed for the finish trades because they are concentrating on getting the structural trades started. Some unscrupulous generals will shop your bid around - in private work there is nothing to prevent this, in public work most states and federal work have subcontractor listing laws to prevent this- but these are the guys you don't want to be working for anyway.
In my experience, good general contractors are looking for good subs and if you put yourself in front of them professionally and perform well, you will be given consideration over and over again.
From contributor K:
Last year I cold called the maintenance department of two of our local hospitals and a bunch of doctorís offices. I got my foot in several of these doors by doing maintenance laminate work. I would rather eat broken glass than do laminate but it was cash flow. As it turned out, most of these operations were having a hard time finding someone to handle the small stuff. These little jobs led to several larger and very profitable projects that included remodeling a doctorís lounge and the complete cabinet package for a suite of doctors offices. Like the others said, be prepared for slow payment.
From contributor O:
The tough part in commercial is the initial contacts. Once you have performed well, you will get many opportunities to "bid". I have submitted numerous bids to some contractors and never contracted with them. They still invite bids, but seem to have their "go to" guys. For others, I have become the "go to" guy and have done many jobs with them.
The "faceless" people in the whole food chain make commercial a challenge to communicate. Shop drawings to a faceless architect who may be so anal that you don't think you will ever get them approved. PM's who only communicate via e-mail (to cover their tail) and who care very little about your "issues". Site supers with attitudes (to cover their tail) who insist that you install your "goods" even before windows and ceiling grid are complete.
Then there is your new role as the "banker". If you are new to commercial, consider seeking quick turn jobs. This will protect you from such things as a 50% run-up in fuel or 25% in fasteners and 8% in laminate. This will also give you a chance to review your bidding process and pricing in a very short period before bidding ground up jobs that are 12 to 15 months out.
The smaller, quicker jobs will also allow you to get to know the GCís better before you get on the hook for a school with a scum bag. Contributor E is right that you better be very lean, especially if you are the "low bid". I would also suggest that you have access to a very good (if you can find one) installer and are prepared to pay through the nose for him.
From contributor K:
I think contributor W's right. I do far more residential than commercial but I don't think I've ever gotten a commercial job that I didn't first go to the contractor for a face-to-face.
There have been some lively discussions on this forum about dress. I think it's important to look professional too for those kinds of meetings. Granted I don't wear my funeral suit but I do wear khakis and a polo shirt with our logo on it. I even shave!
From contributor S:
Your clothing might or probably won't make any difference in getting a commercial job. But it won't make any difference when you try to get paid by a GC. They won't even recognize you.
From contributor L:
We only do commercial work so for what it's worth: We have become the "go to guys" for a few GC's that we feel reasonably comfortable with. There are many GC's that we will not bid to for all the reasons previously listed on this forum. It took a long time to establish these relationships and to get burned a few times by those on our "no way Jose" list. In their defense poor performing subs have burned the GCís too. So if a good sub is "competitive" in price VS a bottom amount unknown, most good GC's will take the safe way out.
We have a bidding success rate about = to contributor R's including the poor rate on government work. We have learned how to "work the system" when it comes to government work done directly for rather than thru a GC. Halliburton we're not but it helps to know the system. One thing that comes up often in commercial work is poorly written spec's or specís without full details at the time of bidding. Simple things like picking a laminate can be delayed until the last minute. This can make meeting the schedule difficult especially if you lack capacity. For those new to commercial: play it safe, keep to the smaller local jobs for a while, remember the slow pay so it doesnít kill your business, talk to other subs about the ethics and practices of any GC you consider bidding to.
From contributor I:
Call and get an appointment with the project manager, estimator, owner or just talk to the secretary - she knows everything that is going and who calls the shots as it's different in every office. Black or gray pants, white shirt, polished shoes, use your wifeís car and meet these people face to face. Look like a business man. The same ones who won't meet you face to face probably won't pay you either. Look for work other than cabinets. Plactic parts, signage , there are a lot of other things to use that CNC for.
From contributor E:
Contributor L brought up a good point. We also do only commercial and have for almost 20 years. When I used to install, I would go and talk to the other subs on the jobs to find out their company name and how they feel about the GC. Sometimes those names and number really help when you don't get returned phone calls regarding payment. What is interesting is the GCís are always there when they need you but when you start calling for payment all you get is voicemail.
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