In the video above, the reporter discusses significant mistakes made by contractors in the bidding process, shedding light on crucial aspects that can profoundly impact the success and profitability of construction or business ventures. It all begins with a story about a potential customer unsure about making profits from their bids, introducing us to the common errors that contractors often make while using a contractor bidding app.
The main problem highlighted is the huge mistake of overlooking overhead costs. The video stresses the importance of not just relying on a markup when doing contracting bidding but also considering all business costs, like rent, office expenses, and payroll.
This mistake is further explained through a simple example, showing how ignoring overhead costs can lead to negative cash flow and hurt the overall profitability of a project.
As the video unfolds, it provides practical tips for avoiding these mistakes, suggesting a systematic approach to calculate overhead percentages and encouraging contractors to include these costs carefully in their bids when using a bidding app. The video emphasizes the significance of maintaining positive cash flow and advises against bidding on projects solely for revenue if it compromises profitability. In conclusion, the video serves as a helpful guide for contractors, encouraging them to be mindful of their finances while bidding on contractor jobs.
