Accurate Estimating for Electrical Contractors
June 14, 2023 12 min read
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Accurate estimating is critical for electrical contractors because it’s the foundation of a successful business. Creating a bid that accounts for the project costs as accurately as possible means you’ll be able to assess an appropriate profit margin and include your business overhead costs. An accurate bid means you know you can be competitive while ensuring you earn the profit that will keep your business thriving. Accurate bidding will help support your growing electrical contracting business so you can create well planned and realistic project budgets.
Using electrical estimating software makes the bidding process faster, more consistent, and more accurate so that you can win more profitable jobs than you would if you use spreadsheets or guesstimating.
Our blog will show you how accurate electrical bids are the foundation of a healthy electrical contracting business, as well as how to use software to make your bidding process faster and more consistent.
Why Accurate Electrical Estimating is Essential for Growing Your Business
Inaccurate bids can hurt your business. If you don’t account for all the costs of an electrical job, you could face multiple risks including product cost overruns, the potential for rework, and a dissatisfied client.
Inaccurate bids can include an incomplete materials list or miscalculation of labor hours. Without an accurate electrical estimate, you can never be certain of earning your profit or even covering overhead costs such as office lease, salaried employees, and insurance.
Don’t underestimate the importance of accurate electrical estimating.
How to Create Accurate Estimates
Using Software for Precise Quantity Takeoff
Every electrical estimate involves a quantity takeoff or materials takeoff to count and convert project specifications into a materials list that can be priced. Without a detailed list of the exact materials needed to complete a project, it’s nearly impossible to create an accurate estimate.
While some experienced estimators get very fast using tools like a ruler, a pencil, and a calculator, electrical takeoff software makes takeoff faster and more accurate by automating material quantity calculations and using digital takeoff tools for a more precise count.
Digital takeoff tools can also help you track quantities by floor or by project stage. Software allows you to build your bid more quickly and track takeoff, so you don’t miss a section.
TIP: Get more accurate estimates by using takeoff software to help automate processes.
Integration with Industry Standard Cost Databases
Using electrical estimating software also provides an easier more accurate way to create materials lists and get up to the minute pricing for the wiring, electrical boxes, breakers, and other materials you’ll use on the job.
For more on how to complete an electrical estimate, please read our in depth guide, How to Do an Electrical Bid Right.
Once you have completed your takeoff, many types of electrical estimating software allow you to submit your materials list to your preferred supplier for instant pricing or compare your local supplier’s prices to the national average.
Because electrical materials pricing (like wiring and conduit) can fluctuate from month to month, getting up to date pricing from your supplier can make a world of difference to your bottom line. Integrated pricing software can automate this process for you. For more ideas, watch our video on 5 Material Pricing Strategies for Electrical Contractors.
TIP: For the most accurate electrical estimate, look for electrical estimating software that includes regular updates for their pricing database.
Use Standardized Templates and Assemblies for Consistency
Electrical estimating software helps you make more accurate bids by allowing you to create pre-built assemblies so you can bid the electrical project the way you intend to complete the work. This means you won’t have to begin from scratch each time you create an electrical bid. Shortcuts like pre-built assemblies or customizable templates can help you bid on more jobs, while also ensuring that your estimating work will be accurate.
TIP: Look for software that includes pre-built assemblies for common tasks, as well as the ability to customize templates for the way you’re used to working.
Electrical Estimating Should Link Seamlessly with Accounting Systems
If you have been using spreadsheets to track your electrical bids you may have found it difficult to transfer information like materials lists, job budgets, and invoicing data between your production employees and your accounting employees.
Accurate estimates are the foundation of a growing electrical contracting business, and connecting your estimating and accounting processes will improve your efficiency and strengthen your financial position by allowing better information sharing. Integrating your accounting system with your estimating software will allow you to reduce manual data entry, minimize errors, and save time.
TIP: Look for electrical estimating software that integrates with your accounting system. A seamless integration between your accounting and service departments makes it much easier to track project budgets, POs, and invoices.
Collaboration and Communication for Team Alignment
An accurate electrical estimate can be the foundation for a solid project budget. Don't close your electrical estimating software after you’ve won the job. Instead, you can hand over your estimate to your project manager so that they have access to materials lists and prices, labor hours breakdowns that are useful for scheduling, and breakout data they can use to create a project plan by stage or floor or building.
For larger jobs you may wish to assign several estimators to divide, conquer, and create a faster, more accurate bid. If your software allows multiple estimators to work on the same job at the same time, you can take advantage of the ability to work together or add the perspective of a specialist when you’re creating the estimate.
TIP: Improve your productivity by using your completed electrical bid to manage your project. You’ll save time and money by starting with the data and lists you’ve already created in your electrical estimating software.
Scalability for Growing Project Sizes
If you’re interested in growing your business by bidding for larger projects, you’ll likely find that the advantages of electrical estimating software will help you scale up more accurately. With larger jobs, it’s easier and faster to make an accurate bid by using software to handle processes like breakouts, digital plan takeoff, and materials pricing in your electrical estimating software.
Another way to scale your business is improving your win ratio. To improve your bids won, you must achieve two goals: make your bids more accurate and increase your total number of bids. Estimating software helps you automate manual processes, which allows you to increase the total number of jobs you bid, while also helping you make more accurate estimates.
TIP: Find electrical estimating software that will handle bids on larger projects. Make sure your preferred software allows breakouts, the ability to customize assemblies, and instant price updates from your preferred supplier. In addition, estimating software that allows multiple estimators to work on a single bid is key to ensuring you can bring up your win ratio.
Training and Support for Effective Software Adoption
There’s no advantage to any electrical estimating software if your team can’t or won’t use it. Before you invest in a tool that’s meant to improve your ability to make more accurate bids, you want to ensure that it’s going to be used by your estimators. Your estimators are valued experts on the process. Make sure to include your estimators in the search for software that’s flexible, scalable, and easy to learn.
TIP: Make sure your electrical estimating software has a full range of support and training services. Is it easy to install, easy to learn? Are there additional training options?
The foundation of a profitable electrical estimating business is accurate estimates that will cover your material and labor costs as well as your business overhead and allow you to earn a profit on the job. It can be difficult to make accurate estimates using a spreadsheet or guesstimating, no matter how deep the electrician experience is on your team.
Using electrical estimating software helps you create more precise and reliable estimates by standardizing your processes, creating more accurate takeoff, materials pricing lists that are up to date, and precise labor hours calculations.