When I am getting to know people in an organization – I normally get around to asking this question- “Who do you think is the most important person in an organization?”. The answer varies from who you are talking to and what their job is within and organisation… .
- Management will answer – its a team event and everyone is important, sing some type of praise starts singing Kumbaya some high management motivation? But they probably think of themselves or the boss.
- PMs will think that they are the captain but will choose someone else to be politically correct.
- The supervisor will say – Site staff as if the product is not built properly you cant get return business and a reputation?
- Etc. Etc. I think you get the picture…
“The most import person – is the person who brings the business through the doors, maintains relationships and closes the deals. So the tender team, procurement, and the construction teams all maintain the reputation of the business – the salesperson gives everyone the opportunity to have a job. Now the boss maybe that salesperson role. So everyone else’s job within the team is to make the salesperson’s job easier. But if a business can get every employee to take on some type of sales responsibility as a united front – obviously that is the goal. Sales and network marketing is an ever-changing world – there is no recipe over the last decade that hasn’t had to adapt.
MARKETING & PIPELINE.
On all the TV shows the client is always struggling to find a good builder. Now that may be correct in some areas and mainly in the residential market however, in the commercial market, it is all out war. You are competing just to get on a tender list most the time, unless you are in a niche market – you have to go out and find the work.
Some tenders just drop into your lap, however, the vast majority (especially in a competitive market), just getting a tender to land at your desktop is an achievement within its self.
As mentioned the tender process doesn’t necessarily start with the Request For Tender (RFT). It actually starts with months or even years of project tracking of Development Applications at Council, specialist organizations such as BCI Australia, Cordell, etc. Trade & network functions, talking to architects, engineering and prospective clients. Letters of expressions to key organizations, countless meet, and greets, tendering on other projects which may not be not your key focus, just to establish legitimacy and a relationship with a client.
Lots of time and money and sometimes plain and simple luck take place. Hopefully, you have a good marketing team who has a pipeline of tenders, to keep the estimating departments ticking over.
THE EQUATION
TO KEEP THE DOORS OPEN?
There is a basic math equation that every General Manager / Owner or the like understand too well. The basic concept is – “how much work do we need to win to be able to keep the doors open and then make a profit?” This number is different in every business but that number is then directly related to the tender win/loss hit rate.
I will talk more about this in estimating record keeping but this is a classic example of why estimating record keeping is so important.
If you wish to read more about estimating records – Click Here
If you have a hit rate of 1 in 5 tenders and you need a turn over greater than $20M, the tender team then needs to bid on approximately $100M of work. Now if you traditionally tender on tenders in the ranging from $1m to $30M – that would equate to not 5 tenders, it may be as many as 30 tenders. So the sales and marketing need to be out there pounding the pavement.
Lots of things can frustrate the pipeline. Whilst looking for the work to tender on – a lot of prospective projects just don’t proceed or simply may be postponed. Sometimes a cost plan doesn’t proceed into an actual project, or there may be a redesign. Keeping a strong pipeline is fundamental to any business plan.
If you are working for a smaller company (normally in the tier 3 category) – the salesperson could be a number of key people including the head estimator. But as an estimator – you want to know the direction of your company. Take an interest in the pipeline. On the other side of the coin – There will be those down times normally around January and February.
But don’t get too disturbed about a small lack of work as there is always price lists and relationship with subbies you can develop. Estimating can be a hard gig however your job security is pretty good. If a company hasn’t got an estimator, the appearance is they have pretty much given up the game. So in these slower times get some good health/work routines going, get to the gym as much as you can. Because when the work starts coming down the pipeline is literally doesn’t rain – it pours.
If you wish to read more about
Tender Process – Click Here