PRESIDENT’S LETTER Martin Howard Last month we talked about best practices for estimating. This month, let’s look at procedures that can help us reduce estimating costs, making us more focused and profitable. As we all know, our trade is often price-driven when that’s all the homeowner or a general contrac- tor wants to consider. Rather than joining the rush to the bottom by competing on price alone, look at your company and evaluate its strengths in your marketplace. Now let’s take a closer look at one of the common practic- es of companies that are high- performing “Best in Class” con- tractors and take the challenge of joining them: evaluating bid opportunities. Keep in mind the 80/20 rule: most of your profit is probably coming from a smaller segment of all your projects. Begin looking at projects and evaluating their compatibility with your strengths. Let’s face it, some types of projects are a breeze and some are a struggle from day one. All that’s needed is to begin to move away from those that seem to always be a challenge. The three largest components of this filtering process are easy to follow. • Determine what market seg- ments hit your sweet spot. Is it new residential or remodel? Is it custom homes or tract homes? If you’re in the commercial area, is retail up-fit and restaurant your best fit or office and institutional? • Determine your best geographic range and project size. If your team is not designed for a contin- uous flow of out-of-town work, then you should keep them close to home most of the time or suf- fer the consequences of high turnover and low margins. I’ve seen the advertising pitch, “No Job Too Small or Too Big” many times. If you can make the same profit margin on a $2,000 and a $1,000,000 job, you are a unique company. Yet you should still ask yourself the question, “Where in this range do I most often make the most margin?” That’s the range where you should focus your efforts. • Determine your best customers. Simply identify which customers Best Practices – Evaluating bid opportunities 18 TileLetter | April 2018