Industry guru Dave Taylor offers tech support on technical and business topics, including iPhone, iPod, Microsoft Windows, Sony PSP, cellphones, online advertising, CSS, Web design, business, Unix, Linux, SEO, Mac OS X, and shell script programming.     


How do I know what to bid for client jobs?

I am starting up a cleaning business and I have everything except the bidding estimate down. I don't where to start or how to figure out how much I need to charge my client. Can you please help me? Thanks!


Dave's Answer:

Accurately bidding projects is a critical challenge for any customer oriented service company, and by coincidence, I'm in the midst of reading a book that talks about how to measure the cost of current projects and then use that data as a basis for accurately estimating future costs of similar projects / clients. (the book: All Your Money Won't Another Minute Buy, by Curt Finch).

To get started, you really need some initial data, so what I would do is find some potential clients who already have a cleaning service they use. Then go through their facility and measure their space. Estimate how much you would bid on the job, then ask them how much they pay. Most likely your bid will be low, probably too low. The question, then, is what aren't you considering when you measure and calculate costs? That's a key thing to figure out before you underbid a real job and lose your proverbial shirt on it.

If nothing else, it's always easier to lower your price after you get a job than to raise it. Customers rarely care that "it takes longer to vacuum than we thought" or "it's a nightmare to mop your granite stairsteps", but you'd produce goodwill if you came back after a few weeks (not one week!) and said "ah, appears we overestimated the time required by our team to clean your facility. We're gong to lower your rate 15% to reflect our growing efficiency as a cleaning agency."

Another idea: run an advert in the local business paper (or regular paper, depending on your desired clientele) and offer them a $5 Starbucks gift card for letting you bid on the cleaning job. Then make sure you call each of them afterwards and ask what the bids from other companies were too. A cheap way to collect competitive data. If you're paranoid you'll underbid, overbid each one deliberately, knowing that for your data collection period you won't land any jobs. You'll be able to calibrate your bidding against the winning bids and quickly zero in on the competitive market rate.

Also, remember that price isn't always the key deciding factor for a service company, even a cleaning service. You might highlight that you have bonded employees, for example, to give your clients a sense of security about their valuable data and equipment, or that you only use "green", environmentally friendly products for cleaning to protect the health and well-being of their workers.

Good luck, and do let us know how it turns out.


More Useful Business and Management Articles:
✔   How do I trademark my group's name?
Yo Dave! So I'm looking 2 trademark my group's name, and once its trademarked will I get a certain certificate of trademark to...
✔   Export LinkedIn Profile as a PDF Resume?
I've spent the last year or two updating and adding to my LinkedIn profile and it has a ton of information about me....
✔   How do I run a credit card transaction with PayPal Here?
I contacted PayPal and got their little blue triangle card reader for use with the "PayPal Here" application, so I can process credit...
✔   How do I search for a registered trademark?
I'm trying to come up with a new name for our software product, having been informed by a customer that a really big...
✔   I'm unemployed. What do I list on LinkedIn?
I wanna ask you about LinkedIn. What's the best practice to fill out the CURRENT POSITION Field when you are not working and...

Let's stay in touch!
Sign up for my weekly AskDaveTaylor Newsletter and you'll receive even more tech and gadget help right to your inbox, along with exclusive news and industry updates. It's good stuff. I promise!
    Enter your name: and your email addr:  




Categorized: Business and Management   (Article 7552, Written by )
Tagged: bidding, estimating, project management
Previous: How do I send my busted Sony PSP into Sony for service?
Next: Can I use nofollow links internally to channel PageRank?




Reader Comments To Date: 1

Ken said, on August 30, 2007 9:30 AM:

Also, be careful not to bid "too low", even if you feel it's the right amount to bid.

Many people and businesses feel that someone who bids "too low" can't be good enough. (My father-in-law found this out many years ago when he wanted to expand his business to the southern end of the county. He didn't get a single job. He found out later that his bids were considered "too low" [despite being the same as he had always done] and everyone thought he couldn't be any good if he was that "cheap".)

Starbucks coffee cup I do have a lot to say, and questions of my own for that matter, but first I'd like to say thank you, Dave, for all your helpful information by buying you a cup of coffee!

I do have a comment, now that you mention it!











I will never send you any unsolicited email. Ever.






Check This Out Too...

 
Look for Answers
Need Help? Ask Dave Taylor!


Follow Me on Pinterest

Find Me on Google+
ADT on G+
© 2002 - 2013 by Dave Taylor. All Rights Reserved.

Note: This web site is for the purpose of disseminating information for educational purposes, free of charge, for the benefit of all visitors. We take great care to provide quality information. However, we do not guarantee, and accept no legal liability whatsoever arising from or connected to, the accuracy, reliability, currency or completeness of any material contained on this web site or on any linked site. Further, please note that by submitting a question or comment you're agreeing to my terms of service, which are: you relinquish any subsequent rights of ownership to your material by submitting it on this site. My lawyer says "Thanks".
"Ask Dave Taylor®" is a registered trademark of Intuitive Systems, LLC.