Getting into tendering and larger projects

What changes with bigger work

• Longer payment cycles and progress claims
• Retentions held back until the end of the job
• Formal contracts with real penalties
• More paperwork: safety, insurance, programs and reporting
• More cash needed to carry the job

A business that’s comfortable on residential jobs can find its cash flow under real pressure on a project three times the size.

The cash flow question

Larger projects usually mean paying for more labour and materials before you’re paid. If retentions are held and claims are slow, a profitable project can still leave you short of cash for months. Before you tender, know how much cash the job will need and where it’s coming from. (See tradie cash flow.)

Know your rights

Each state has security of payment laws that give you rights to be paid for work done, with set timeframes for claims. Understand how they work in your state before you sign a bigger contract.

This is general information only. Get contracts reviewed by a construction lawyer before you sign.

What to have in place first

1. Healthy margins on the work you already do
2. Accurate job costing you trust
3. Enough cash or finance to carry the project
4. Insurance and licences at the right level
5. Systems and people to run more than one job at a time

Pick the right tenders

Not every tender is worth chasing. Pricing a tender takes real time, and winning the wrong one can be worse than losing. Focus on work that suits your experience, your team and your cash position.

Stepping up to larger projects is where experience counts. We help builders get the business ready first, then go after the right work.

General information only, not financial, tax or legal advice. Speak to your accountant or adviser about your own situation.