It is a common question in the building service contractor (BSC) market.
What is the answer to successful bidding?
First, know how to bid.
The keys being to stay in the price ball park, ensure a profit and sell benefits.
During my 25 years experience in the industry, I have helped hundreds of companies win new accounts.
Bidding is really quite easy once you have established methods/metrics.
Here are some helpful tips.
Gather Metrics And Information
You will need to gather metrics and information regarding the building and the prospect in order to bid properly on a potential account.
Here is a list of some information you will need:
- Square footage (in order to calculate labor)
- Number of fixtures in the restrooms (in order to calculate labor)
- Density (how packed a room is with furniture/people — this also affects labor)
- Services expected (affects labor)
- Age of facility (affects labor)
- Expectations of client (affects labor)
- Who will pay for client consumable supplies
- Day porter options (affects labor)
- Cleaning times (day/night and how much access you have to the building)
- The challenges the client is facing with their current service
- The client’s goals and vision of where they want to be.
If you know your expenses, you can be sure to make a profit off the account.
The biggest expense and the hardest one to calculate is labor.
A production rate is the rate at which a person can perform a given task/set of tasks.
You may have your own, which is best, because they are proven rates based upon how you work.
If not, there are industry rates you can use like ISSA’s 540 Cleaning Times.
Beware — these may need a little modifying to fit your company.
Gather the necessary metrics, apply the rates and calculate time.
For example, in team cleaning, a light-duty specialist who performs trash and dusting duties usually has a production rate of 13,000 square feet per hour.
If I had a 25,000-square-foot building, I would take the 25,000 square feet, divide it by the 13,000 square feet per hour rate, and would get 1.92 hours; the time it takes that person to clean that 25,000-square-foot building doing those services.
Then you calculate the labor expense by taking the time and multiplying it by the employee hourly rate, applying labor burden expenses like unemployment insurance and matching payroll taxes.
Doing this for all services will get you your labor expense.
Other expenses might include possible health insurance — with the new government mandates, I would need five hours to tell you all of the requirements — equipment, supplies, liability insurance, bond, training, background checks, badges, uniforms, communication/inspection devices, etc.
After you calculate all of your expenses, it is time to calculate price.
This can be calculated many ways, the end result being you achieve a reasonable profit off the account.
Some ways to get you to a competitive price is cost per square foot (e.g., $.065 per square foot), a percent used for profit (e.g., 4-7 percent profit after all expenses), a dollar amount for profit (usually for smaller accounts — don’t go below your minimum) and cost per labor hour (e.g., $12 per hour, which covers all expenses and profit).
Present To Close
Now you are ready for a compelling proposal.
Here are some quick tips to help you close the sale:
- Make sure you have gathered all information and answered all questions prior to the presentation.
- Reframe previous conversations and what your prospect’s goals are (e.g., clean facility to attract customers).
- Transition in terms of benefit. Focus on the benefit that you’re offering to them.
- Talk about how you will deliver them the benefit, for example, through trained employees and quality control software.
- Show them the scope of work.
- Establish mutual expectations, what you will do and what you expect of them.
- Give them pricing options depending on levels of service.
- Overcome any objections.
- Close the sale.
- Always schedule a follow up appointment.
Here is an example of how to close the sale, a possile conversation between you and the prospect:
- “Before we move forward, what questions do you have about the proposal?”
- Summarize the benefits. “Bob, last time we spoke you mentioned that you wanted a clean facility in order to attract more customers. Bob, that is exactly what we do.”
- “Based upon that, my recommendation is…" Let them know which pricing option you recommend as they move forward.
- “All we need to get started is…" Let them know what needs to happen for them to move forward.
- “What time would be best for you to…" Give them some time options for them to do the things necessary to move forward.
Should you use bidding software?
Gathering metrics and information, and calculating expenses and profit, can be done many different ways:
- Paper and calculator
All methods work, but the closer you get to software, the easier it is to gather information faster, use stored procedures/methods of calculation, and ensure fewer mistakes, making sure you have a competitive price that makes you money.
Speaking about software, John Garrett of Facilities Management Advisors LLC, reports that it “allows more efficient and productive performance at all levels of management.”
Software is not only more accurate in its calculations, but it can also go much farther in presenting your business as one that is progressive in its techniques.
Potential clients will be far more impressed by a specialized program than by a paper and pencil approach.
When looking at software for bidding, consider the following features:
- Specific to your industry
There are many software packages out there, so be sure to do your research first.
Using bidding software will increase your productivity, set you apart from the competition and increase your revenue.
All of this while providing pain relief both during the bidding process and after you win the account.
Following these principles, you may agree with Shawn Jones of Dale Rogers Training Center Inc., who notes that this approach makes it “much easier to maintain clear expectations and goals.”
Imagine the results you’ll achieve, and then go realize them.
Michael Jenkins has over 30 years experience in the cleaning industry and has operated a successful cleaning company across multiple states. Michael has helped over 100 people start and succeed with their own cleaning business. He also continually works to develop a software program called CleanTelligent that helps BSCs and CRPs increase revenue, retention and productivity. CleanTelligent helps companies with communication, inspections, scheduling, workloading, estimating, proposals, trend tracking and much more.