1. Do not bid on all projects -- qualify bids by type of project, type of client, name of architect, or reference.

Many remodelers choose the projects they will bid on based on the type of project, the architect or interior designer involved, or the other contractors bidding. If a remodeler has a "sweet spot" -- jobs that their company performs efficiently and profitably -- they may chose to bid on only those jobs.

Chuck Dunnigan, of Dunnwell Construction, in San Diego, often receives leads from an interior designer. "Referrals from this designer are quality leads," Dunnigan says. "If he sends me something, I'll bid on it." The remodeler says that jobs referred by interior designers and architects are often larger, so homeowners are less likely to call him directly for his design/build services.

Bid requests that do not come from an architect or designer, Dunnigan treats as a cold lead or first sales call. "I approach clients who have specifications just like the ones who do not," he says.

He likes to spend time with these prospects to find out their priorities. "I have more success when I meet with clients," he says. "Besides the logistics of what is drawn, there are other things: If the homeowners already have plans, they look at the bid as more of a commodity. They believe that every contractor is bidding the same thing. I steer the conversation to the high level of management that we provide and our detailed schedule. I try to steer them away from the bottom line attitude toward a value approach, as we do with design/build clients. It helps me to decide how much time I will spend on it," Dunnigan says.

If the interior designer is involved, the remodeler asks them for background information about the client. "I often ask the designer for feedback about the client's lifestyle. If I have a good grasp of that, I might not ask to meet the client before I put together the bid," he says. This is because he relies on the interior designer to present his bid and company to the client, including the added value they will receive by hiring Dunnwell Construction.

Dunnigan says that asking clients about their budget and past remodeling experience reveals a lot. He also asks who else they have approached for a bid. "If it is a large company, I know I do not have the same high overhead and marketing budget. I know I can be competitive on price and can deliver the same service and use the same suppliers."

Bill Keilty of Keilty Construction, in Boise, Idaho, prefers to find out the names of the other remodelers bidding on the project. "Right now, with the slump in new housing, builders are infiltrating the remodeling industry. If the client or architect lists four names and the other three are not professionals, then we will bow out of the bidding. They do not have the same operation we do and they might be happy getting just wages, which we cannot do," Keilty says. The only exception is for past clients or referrals. "We do not want to stop the chain of referrals," he says.

2. Ask clients for a specification list before you bid, so you can create a more accurate bid.

Keilty says that the plans he receives for a bid proposal are not detailed enough to create an equal playing field. "The clients have a picture of what they are getting; the architect might be envisioning something else; and we remodelers are thinking something else again," he says. He asks clients for a specification list that includes cabinetry, flooring, surfacing, plumbing fixtures, etc. "We have bid without a spec sheet, but we try to narrow it down so we don't waste time. Especially when bidding against new-construction guys who are now doing remodeling work. They usually put in allowances, but the allowances can make a big difference in the final bid number."

Like Keilty, Robert Kraft of Kraft Custom Construction, in Salem, Ore., is also more willing to bid on projects that have a full scope of work. He explains to homeowners that jobs bid without detailed specifications set up a challenging relationship between the homeowner and whichever contractor they choose: "I tell the homeowner, 'If there is a gray area when I put my bid together, I might not put down what is right for you because if it costs more, I'm sure to lose the bid.' But that results in lots of change orders. It sets up an adversarial relationship from the start."

3. For more accurate bidding, ask major subcontractors to review the scope of work and submit an estimate.

Depending on the scope of the project, Leland Finley might call in a subcontractor to review the project before he bids it. "Especially if they want to modify or upgrade existing electrical or plumbing," says the owner of U Break-I Fix, in Riverside, Mo.

"You have to make a site visit to accurately bid," Keilty says, explaining why he takes a few hours to invite trade contractors to a bid party to review the scope of work and offer estimates. "I would not bid a major project without a bid party."

For Keilty, the bid party is especially helpful for HVAC systems. "Is the existing system adequate for the remodel or addition? We have that diagnosed at the bid party. What portion of the house has to be modified to accept the addition? The best plans in the world will not show that. We figure out which walls will have to be opened up, which, in turn, has bearing on drywall and painting. Our numbers will seemingly be higher than someone else who does not use the bid party process," he says.

Keilty Construction does not charge for bid parties, which take a few hours. "That time is donated," Keilty says. "But people should pay for what they get -- not just an average cost per square foot. Our bid is more realistic because we're looking at the entire scope of work."

4. Before you submit your bid, educate the client about how your bid may differ or important questions they should ask the other bidders.

"Education needs to happen before you give them a number," Finley says, adding that homeowners have been influenced by TV programs that show projects completed in one week. "The exploratory process is where the bid starts," he says. "The client has a problem or need. They want something done but are not sure what that is." He says that remodelers should take this opportunity to educate.

"Interview your client before presenting the bid to find out what they are looking for. This way, you can tailor your presentation," Dunnigan says. He lets customers know that other contractors might sell on price, but that he is selling value. He also gives them a cost range based on historical data, which, he says, keeps him from wasting his time. "If we have parameters on the project but don't know specifics, the cost will change based on the specifics. I tell them to prepare themselves for budget A to budget B," Dunnigan says.

Kraft suggests questions that the homeowners can ask the other contractors. "I tell them to find out more about the contractor and their way of doing business," he says. "Does he provide a selection process? This is the real determining factor on how the job will go. I tell the client: 'I develop a finish schedule with all your selections and give it to you at the beginning of the job. You will know, for example, that you need to choose 15 light fixtures by a certain date. Is that valuable compared with someone calling to say, 'The electrician will be here tomorrow. Have you picked out light fixtures?'"

Kraft also suggests that clients talk to his references and ask them tough questions such as, "What happened when something did not go right?"

5. Present your bids in person.

Finley presents his proposals in person. "It gives new customers an opportunity to ask questions and gives me an opportunity to explain the bid," he says.

Dunnigan says that mailed or e-mailed proposals are not taken seriously. "I always present the bid at an appointment and make the proposal to everyone involved," he says. "I give them the best presentation I can with most details and hope that will push me over." He also focuses on the profile of the buyer that he developed during the first meeting. "That way, I'm not rambling on about details that are insignificant to them, and I'm not leaving anything out."

If a designer is involved, Dunnigan asks to have that person present, especially if they have worked together in the past. "If he is recommending me, it's good to have him there as advocate," Dunnigan says. During the conversation, he and the designer might refer to issues they solved together in the past. "That conversation may lead to the client having more confidence and bonding with you," he says.

Keilty's staff asks clients how they would like to receive the proposal. "I dislike the used-car salesman technique where I hand it to them and sit there while they read it," Keilty says. He prefers to e-mail, mail, or fax the proposal to the homeowners and to then set up a meeting. "They usually need a few days to get over the shock of the cost and to come up with ideas or questions," he says.

Dunnigan's five-page bid document is divided into sections. "We use a template of language in each subsection that helps clients understand what is and what is not included," he says. Along with the proposal, he gives clients a packet of information about his company, including brochures and guidelines on choosing a contractor.

Kraft provides a thorough 23-page proposal. "I can't sell them on cost because I can't make decisions now on some of the details. So instead, I wow them with thoroughness," he says.

6. Do not lower your margin to win the bid.

"Never allow yourself to be driven by the client's budget or their disclosed budget or other people's bids. If it does not work out with your markup, it won't work. Don't get caught up in 'winning.' Don't get emotionally involved. Let someone else lose money," Dunnigan says.

Keilty agrees. "I will not modify my numbers even if I see someone else's numbers. We have hard bids from all our subs. We won't take a job just to stay busy," he says.

7. Track actual versus estimated costs on all jobs so you can update your estimating software to make sure that your bids are accurate.

Keilty says that remodelers must track their numbers. "The key is knowing your numbers. Then you will bid it correctly," he says. "If you are willing to do things on square footage average, you might be fine, but I prefer to be accurate."

Keilty Construction staff also analyze actual cost versus proposed cost through the duration of the project, including callbacks after the end of the job. "We are getting hard bids from subs, so in-house labor is the one we have to track," Keilty says. The office asks the lead carpenters for input on the labor. For example, in the winter, the rate is higher because the crew is less efficient and works shorter hours. "In summer we can work six to seven efficient hours; winter might only be four to five."

8. If all else fails, avoid bidding, and cultivate relationships that lead to negotiated contracts.

If you're remodeling right, Kraft says, then every client is a client for life. "When you leave, there should be no reason for them to ever call another contractor," he says.

Kraft spends time educating clients about value so they will understand that what they are buying from him is not a bid or item but a service. "I try to put it in perspective by explaining that they would not hire a doctor, attorney, or accountant based on price," he explains, telling clients that remodeling is an investment in what is likely their biggest asset, their home. Part of his job is to change their perception of the industry.

Kraft says that it's also important to choose clients who will be worth your investment and energy. "When people call me, I'm also interviewing them to see if they are a good fit," he says. It also helps to build a team -- trades, suppliers, architects -- that understands the service you want to deliver and your culture.

Mike Gervais, of Prime Construction, in Burlington, Vt., says that he didn't stop bidding until he changed his own mindset about remodeling. "We have a service that is worth money. We value or own time and effort."

Gervais spends time to elevate the level of service that his company provides. He takes continuing education, is involved in the local home builder's association, teaches seminars for homeowners at banks, and lobbies the state legislature to create a licensing program and pass more stringent workers' compensation laws.