Problem Aware

Are You Making These 5 Costly Mistakes When Bidding on Jobs?

By England Hart, The Second Opinion Blog • June 9, 2026

You walk the site. You take the measurements. You write the estimate. The homeowner signs the contract.

You won the job. You should be celebrating.

But three weeks later, the job is finished, and your bank account is empty. You worked your tail off, your crews executed perfectly, but the math didn't work out.

You didn't lose money in the field. You lost it in the bid.

Bidding is the most dangerous part of running a contracting business. If your estimates are built on bad data, every job you win pushes you closer to bankruptcy.

Here are the five most costly bidding mistakes contractors make, and how to fix them.

1. Ignoring Your True Labor Burden

You pay your guys $25 an hour, so you bid the job at $25 an hour for labor.

This is financial suicide.

Your employees cost you far more than their base wage. When you factor in employer taxes, workers' compensation, liability insurance, and non-billable drive time, that $25-an-hour employee actually costs you closer to $35 or $40 an hour.

If you do not know your exact labor burden, you are subsidizing your clients' projects out of your own pocket.

2. Forgetting to Allocate Overhead

Your business has fixed costs: truck payments, office rent, software, insurance, and your own salary.

These costs exist whether you win the job or not. Therefore, every single job you bid *must* carry a percentage of that overhead. If you only bid for direct materials and direct labor, you might break even on the job, but the business as a whole is losing money.

This is why so many contractors look profitable on paper but are actually broke.

3. Guessing at Material Costs

You have been doing this for ten years. You know exactly what a sheet of drywall costs.

Except, you don't. Supply chain issues and inflation mean material costs fluctuate wildly. If you are using prices from memory instead of calling the supply house for current quotes, your margins will evaporate the moment you hit the checkout counter.

4. Failing to Charge for "The Unknown"

Every renovation project has a surprise hiding behind the drywall. If you do not build a contingency buffer into your bid, you will eat the cost of those surprises.

Professional contractors do not hope for the best; they price for the worst.

5. Bidding Without Historical Data

This is the biggest mistake of all.

You cannot write accurate bids if you do not know how your past jobs actually performed. If your bookkeeping is a mess, or if you rely on the shoebox method, you have no historical data to base your estimates on.

You need precise job costing. You need to know that the last three times you did a bathroom remodel, it took 15% longer than you estimated.

The Data-Driven Bid

You cannot out-work a bad bid.

If you want to stop working for free, you have to get your back office in order. As we outline in our Complete Guide to Performance Bookkeeping, you need a partner who can calculate your exact labor burden, track your overhead, and give you the real-time job costing data you need to bid with confidence.

Stop guessing. Start knowing.