How to Analyze Electrical Bids Like a Pro
August 31, 2021 7 min read
Electrical contractors are always looking for strategies to boost their bidding power. Here are five ways to improve your bids so you can win more jobs.
1. Start Tracking Your Bid Results
You can’t improve your electrical estimating process if you don’t have a solid understanding of your bidding results. The first step to knowing how your estimates are performing is to track some key metrics using a simple spreadsheet. Your bid log should include the following information, although you can add more items to track for specific types of work:
- Winning bid amount,
- High bid and low bid on the job,
- Your bid amount,
- Your % markup,
- Cost of the job,
- Your $ markup,
- Amount in dollars and percentage you were over/under on the bid.
With a sample of at least 20 or 30 bids in your Bid Log Spreadsheet, you’ll be able to spot some patterns. For example, negative totals in the low bid column would indicate you were consistently under the low bid, and you may need to raise your estimates.
For more detailed bid analysis you can also track the size and type of jobs you have bid. What kind of jobs are you bidding successfully? Residential, commercial, industrial? What size of jobs are you winning? Some electrical contractors add a difficulty scale to their tracking spreadsheet to see whether they are bidding on too many difficult jobs, or too few.
A thorough bid analysis should also include the following steps:
- Always request bid results so that you can see the difference between your bid and the winning bid in dollar and percentage amounts.
- Review the size of the jobs that you have been bidding to understand how to maximize your gross profit. For example, does it make more sense to bid on a single $100K job, or ten $10K jobs if the profit will be the same?
- Assess the difficulty of the jobs you are bidding to gain insight into the actual costs of the job. What resources and overhead are required for the jobs you are bidding?
2. Evaluate What Worked (and What Didn’t)
Logging key data about your bids will help give you an overview of how you’re working. This data gives you the power to zero in on the parts of your electrical bids that have been successful so you can repeat them. Tracking the results of your bids will also expose the places where you are less successful, and which need to be tweaked for better results in the future.
3. Use Estimating Results for your Workforce Planning
Getting labor and materials costs right are a big part of creating a winning electrical bid and preserving your profit. If you use electrical estimating software to create your bids, you can use the labor total report to compare your estimated labor with your actual labor.
Track the number of hours worked for each phase of the job against the number of hours in your estimate. This information will provide you with an more detailed assessment of how well you’re assessing labor for each phase of the job.
And if you like, you can use your estimated labor to motivate your workforce to work more efficiently. Let your crew know how much time you have budgeted in your Labor Phase Spreadsheet for each phase of the project, so they know what to work toward. You could even offer an incentive like a gift certificate for work completed within a particular standard, such as 10% under your labor budget. It will be worth your while and help you to keep the job under budget.
Job costing programs track estimated labor and materials costs versus the actual. For example, a job cost tracking software like JOBPOWER can track whether you are consistently over budget on your lighting hours. When you discover a consistent result, it may be time to adjust the system you’re utilizing to make your estimates. For example, raise all your labor units on lighting by 10% to account for deficiencies.
4. Improve Your Bidding Proficiency with Training
Classes can help you gain a better understanding of your electrical estimating software including best practices and tips and tricks to make you a more accurate, more efficient estimator.
Once you have been through a few training classes, continue to use your software as much as possible so that you’re always using all of the processes that will make you into a more accurate estimator.
There’s a benefit to using your electrical estimating software for every job you bid, even the smaller ones. Smaller jobs are simpler to track. And no matter how big the job is, your proficiency will improve with practice. You can even re-estimate jobs which you have already bid or completed for insight into how to do a better estimate.
5. Use Estimating Software for Improved Accuracy and Speed
Electrical estimating software can help you reduce errors and complete more bids more quickly so you can compete for more jobs. The more you use your estimating software, the more closely you will be able to track the accuracy and success of your estimates.
- Useful for all sizes and types of jobs.
- More accurate than manual estimates.
- Cuts your estimating time by as much as 50%.
Making a review of your successful bids as well as those jobs you don’t get can help you learn how to bid better and win more jobs. Watch our detailed video for more information on how to submit a competitive bid after you’ve completed the takeoff.
Resources in this Blog