The Costly Bidding Mistake That Drained Profits — And How to Avoid It
Introduction — Why “Busy” Doesn’t Always Mean “Profitable”
In competitive industries like electrical and clean energy, companies often measure success by how many bids they win. Trucks are moving, crews are busy, projects are stacked. On the surface, everything looks great.
But winning jobs isn’t the same as making money. In fact, one of the most common traps growing companies fall into is underbidding — taking on projects that look good on paper but bleed cash once work begins.
The danger is subtle. Because jobs keep coming in, leadership assumes the company is healthy. But if projects consistently finish with slim or negative margins, the result is stress, burnout, and financial erosion that no amount of “busyness” can fix.
Why Companies Lose Money on “Won” Bids
Bidding mistakes don’t usually stem from incompetence. They come from blind spots in the estimating process and a mindset that values volume over profit.
Missed Compliance Costs
Every region has unique requirements — whether it’s non-standard poles, trenching standards, or utility-specific inspections. If these costs aren’t captured, a project that looked profitable in the estimate can swing into loss once work begins.
Underbidding to Stay Busy
When estimators feel pressured to “keep crews working,” they sometimes cut margins too thin. This short-term fix leads to long-term losses.
Lack of Margin Guardrails
Without a minimum profit threshold, bids are submitted without clarity on whether they meet financial goals. “Winning” becomes the objective, instead of building sustainable profitability.
Case Study — How One Bidding Mistake Cost $10K
A client of ours illustrated this problem perfectly. On paper, they looked successful: they were winning bids consistently and keeping the team busy. But financial results told a different story.
In one project, the estimator missed a location-specific compliance cost: the use of high-grade, non-standard poles. That oversight turned what should have been a profitable job into a $10,000 loss.
And it didn’t stop there. Similar mistakes repeated across projects. Average margins fell to just 8%, even as the company stayed “booked solid.” Crews were exhausted, leadership was frustrated, and the business was essentially spinning its wheels.
The Fix — Shifting From Volume to Profit
The turnaround came from rebuilding their approach to bidding:
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Job costing rebuilt to include all location-based variables and compliance requirements.
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Estimator training focused on slowing down, reviewing hidden costs, and walking away from bad bids.
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Profit-first pricing introduced a 20% margin target and a “no-go” filter for projects that didn’t meet the threshold.
The change wasn’t just technical — it was cultural. Leadership shifted from chasing “busyness” to prioritizing profitability.
The Results — A $420,000 Swing in Profitability
The impact of bidding smarter was dramatic:
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That $10,000 loss on a single job was flipped into a $25,000 profit on a comparable future project.
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Within two quarters, margins improved from 8% to 18%.
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Across the year, the company realized a $420,000 profit swing.
Fewer jobs, higher margins, healthier teams — and a far more sustainable business.
What Leaders Can Learn from This
This case highlights a simple but powerful lesson: profitability isn’t about how many bids you win. It’s about which bids you choose to pursue.
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Always capture compliance and regional requirements in job costing.
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Train estimators to protect margins, not just fill schedules.
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Set profit guardrails — and be willing to walk away from projects that don’t meet them.
The smartest companies aren’t the busiest. They’re the ones that bid strategically, say no when margins don’t make sense, and build a pipeline of projects that fuel sustainable growth.
Conclusion — Bid Smart, Not Cheap
Underbidding is one of the fastest ways to burn out teams and drain profitability. The good news? It’s avoidable. With the right systems, training, and profit-first mindset, companies can turn bidding from a liability into a competitive advantage.
For our client, this shift meant turning losses into gains, improving margins by 10 points, and unlocking $420,000 in profit.
The takeaway is clear: stop chasing every job. Start bidding strategically.
👉 Want to strengthen your bidding process? Download my 5-step Smart Bidding Checklist or book a quick 20-minute review.
