Bidding on a business or property can be extremely competitive in any setting. According to Dan Lok, King of Closing, a structured strategy can help bidders succeed when the stakes are high. Regardless of the reason, closing on a deal is an art form that can be learned.
Competitive Marketplaces
There are several reasons for competition when referencing a business. Winning a business can mean finding the best product and service deals for revenue. It can also refer to winning the customers themselves.
When bidding for a business project, scaling the competition is key. By knowing what you’re up against, the process can begin. Although it may feel like competition while bidding is a disadvantage, it can present an opportunity to set yourself apart.
Understanding Competitive Bidding
Competitive business bidding is used by both companies and government agencies. This type of business requires services or products on a large-scale basis. To win these bids, a Request for Proposal is sent within a specific time period.
Competitive bidding is also used during the sale of a company. This occurs when an investment banker solicits letters from those who are interested in buying. Many times, the information sent must include an individual’s history, capability and time frame for executing the project.
Businesses evaluate bids depending on the unique information provided. Once reviewing the Request for Proposal, face to face interviews may be conducted. During this process, the business will meet with an individual to see who is the most qualified for their specific business and how they may accomplish this. Regardless of the outcome, all bidders are usually informed of whether they have won the bid or not.
Competitive bidding can also be used during Initial Public Offerings. When a business sells its first issue of stock to the public, underwriters are often invited to submit sealed bids. After assessing the bids, a company can then choose the best price and contract that benefits both parties. Many underwriters use a negotiated bidding practice, but competitive bidding can still occur.
Even though competition for a business bid can feel time-consuming, there are some benefits to potential buyers and sellers. Competitive bidding can help buyers procure the best contract terms for their specific proposals. Conversely, the seller can execute the kinds of proposals they are already familiar with at a negotiated rate.
5 Ways To Beat The Competition In A Business Bid
Before setting a concrete negotiation and bidding plan, Dan Lok emphasizes the importance of preparation. Once all the information is gathered, you can assess whether the business is worth bidding on.
Be Picky
If this is your first bid, there will be others. Depending on the business, it may not be the right fit for you and your own set of skills. Ask the right questions. Before accepting a bid, make sure to ask what is required. If the business is already interested in a specific bidder, the answers to these questions may be elusive.
Research
Research is your friend. Researching business opportunities and techniques has served Dan Lok well when closing on specific deals. By preparing a bid, assessing the other bidders is just as important as the business itself. This is especially beneficial for creating proposals in the future.
Be the Best
Providing value should be a top priority. By submitting a summary of qualifications, you can explain why you’re the best person to win that particular business bid. This should be specific, but not overly-detailed. Describe how you will complete the process and the sequence of events. Providing proof of insurance can also prove helpful.
Meet Deadlines
Deadlines are imperative in the business world. Arriving late for a bid deadline allows competition a leg up. On time should mean exactly the time that is set, not twenty or even ten minutes later. Not only will this move the bidding process along, but it shows the necessary respect and courtesy expected.
Avoid the Low Bid
Simply being the lowest bidder will not guarantee a contract. By bidding at an accurate number, the bid can present an accurate turnaround for a reasonable price. Negotiations are not necessarily over if you win the bidding process. Most likely, you can still discuss negotiations until the final stage has been reached.
How To Win
Bidding includes providing information, interviewing, and negotiating. For this process to become completely successful, both parties must come to an agreement that benefits them both. Winning is not just about slaying the competition. It’s also about how to provide what is necessary to come across as appealing as possible.
Making the first offer is usually recommended when bidding. Although many people are reluctant to do this because they do not have an idea if their proposal is too high or low, it can be beneficial. A price that is closest to your target price will ultimately set the stage for future bidding negotiations.
Like all bidding strategies, knowing when to walk away is critical. Both the target price and the unacceptable price should be understood before bidding begins. Although negotiating can be an emotional practice, these numbers should stay firm. By knowing what you need, want, and what is acceptable, the bidding process can become a lot easier.