Ten Keys to Prospering in a Market Where Competitors Undercut Your Prices

1. Know your Bid/Win Ratio. This will vary but it is important to know and track.. If you are in a business where it takes 5 or 10 bids to win one, be glad you are not in a business like the drywall business where it often takes 30 or more bids to win one.
2. Stop guessing about cost. When you know your true cost, you know how low it is safe to go.
3. Focus on and measure (count) Quality. Lean about what "Quality in Construction" really means.
4. Work at reducing your cost. A $1,00.00 cost savings is equal to a $10,000.00 increase in sales (If you operate at a net profit of 10%).
5. Quit worrying about being the cheapest bid. Become the "Low Cost Producer". Study "Lean Construction".
6. Specialize and a find a niche. Specialist generally have less competition. They can ask and get premium fees. At the same time reduce cost.
7. Partner with larger contractors based on your true machine cost plus.
8. Track each of your competitors. They like you, have a limited number of machines, operators and supervisors. Let them fill up with below cost work.
9. Work at being the best, not the cheapest.. Remember, like you, every Caterpillar (and other brand) salesperson is faced with competitive pressures based on price only. You do not see CAT going out of business.
10. Know your real cost per Hour on each job, for your machines. (Do not even consider using other company's cost, prices or Historic Accounting records. Use Dynamic (changing) Life Cycle Owning and Operation Cost. This must include budgets for all heavy equipment repair and maintenance cost. For more help with any of these, contact me at www.DecisiveCost.com
    

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