How to Estimate Electrical Work for Different Types of Jobs
March 20, 2023 11 min read
Table of Contents
Bidding on electrical jobs is the foundation of a successful electrical contracting business. Your electrical bids must be accurate and consistent to be competitive. It’s a fine balance to create a bid that’s high enough to cover your costs and business overhead and turn a profit, while also low enough to be competitive and win the job.
What’s the Best Way to Estimate Electrical Work?
Consistent processes will ensure that you can create electrical estimates that help you to win jobs. We’ve summarized the basic processes for creating a winning electrical estimate for two different types of construction projects below.
Read our electrical estimating guide for a breakdown of three top pricing strategies.
Estimating versus Guesstimating
Even the most experienced electricians may have trouble creating a completely accurate electrical estimate by guesstimating. At best, you could win the job, but take home a slimmer profit. Or you might lose the job to a competitor. At worst, you might end up working for no gain and eating your profit.
There’s more up front work to create standard estimating processes, but the reward is more accurate bids and better results for your business. Getting prepared for the job pays off in the end.
- Choose the right jobs for your business. Bid on jobs that are within your expertise. And, although it may seem obvious, it’s helpful to know that sometimes more work isn’t always better for your business.
- Be sure you have a clear understanding of the scope of the project. It’s nearly impossible to create an accurate estimate for plans that are incomplete.
- Create a materials list and a labor hours estimate. Calculate how much the job will cost you to complete.
- Make a realistic budget that includes your business costs. The budget should always include overhead, such as shop rental, insurance, and salaries for your office staff.
- Don’t forget to add a percentage for your profit on every job you bid.
How to Create an Electrical Estimate in 7 Easy Steps
No matter if you are creating a bid for a residential job or a commercial job, bidding on electrical jobs should follow the same basic seven steps.
- Review the job specs thoroughly. Specifications are usually contained in the request for proposal (RFP).
- Analyze the project drawings, making sure you keep a close eye on the other systems in the building, including plumbing, HVAC, and any instances when height or elevation may affect your work.
- Complete a materials takeoff so you can create a comprehensive list of all electrical materials you need for the job and the quantities.
- Calculate labor costs, or the number of hours your electricians will need to complete the job.
- Add the overhead costs, which are the costs to run your business. These should be built into every estimate. Overhead includes direct job expenses such as permits, temporary power, backhoe rentals, as well as tools, ladders, scaffolding and any safety equipment or vehicles. Overhead also includes any subcontracts such as for fire alarm installation, concrete cut and patch, security, or trenching.
- Include profit margin, which is the amount you make after covering all job costs. Add your markup using the markup strategy that’s most appropriate for your job. Read our article on 5 Electrical Markup Strategies for Successful Electrical Estimators for more information.
7. Create a detailed, easy to read estimate for your customer.
How to Estimate Residential Electrical Work
For residential electrical work, you may be providing your estimate to either the homeowner, in the case of a bid for rewiring, or to a General Contractor for new builds.
In many cases, estimating electrical work for new builds is easier than rewiring an existing home. That’s because rewiring requires additional labor to open walls and remove older wiring and fixtures before replacing them with new wiring.
Pre Bid Planning and Review
Make sure you consider the following in your review:
- Size of the home,
- Type of work the customer needs,
- Ease of access. Does the work involve cutting through walls or removing old wiring?
If it’s possible to schedule a site visit, you can also note any high traffic areas in the residence, places where there might be bad wiring, or any area that will require extra time and manpower.
Review the Drawings
For new builds the General Contractor should provide drawings, blueprints, and any graphics. If you will be submitting your bid to the homeowner, ask for blueprints, if at all possible, because it’s critical to understand the other systems in the residence, such as HVAC, plumbing, and overall layout.
Build a list of electrical materials using the blueprints so you can get material costs broken down for your bid and clearly list the materials in your estimate. E.g. the number of switches, outlets, circuit breakers and other electrical conduits needed to complete the work.
Calculate Labor Costs
Use Bureau of Labor Statistics data to identify the hourly rate of electricians and calculate the hourly costs for your electricians who will complete the job.
How to Estimate Commercial Electrical Work
Commercial electrical jobs can be more complex than residential work because most commercial projects will require a larger number of components. If you are bidding on a rewiring job, the age of the structure, and other unknown factors can make the estimate more complex.
A commercial electrical estimate should be based on electrical plans that show outlets, electrical equipment, light fixtures, and power panels.
Review the Electrical Plans
Plans should specify the power requirements of the equipment as well as the estimated wire sizes. At this stage, you can note whether you will need to bring in a specialty contractor for items like a fire alarm or elevator. You can also consider any advantage provided by building symmetry, such as if there are several floors with similar wiring configuration like an office high rise. The estimated cost of a single floor can be duplicated for ease of estimating.
Estimate Cost of Materials
Complete a material takeoff from the plans. With larger and more complex jobs it’s best to use electrical estimating software along with electrical plan takeoff software so you can mark off each item as you take it off from the plans.
Calculate Hourly Labor Cost
You can further the advantage of using electrical estimating software by using the built in labor unit manual that comes with many electrical estimating programs. Otherwise, you may have to rely on experience to understand how to correctly assign labor for a task like installation of a duplex receptacle.
Be sure to include a Budget Cushion to cover unforeseen costs like additional labor for any areas that require overtime to stay on schedule, or any changes for Occupational Safety and Health Administration rules or fines.
Finally, every bid should be accompanied by a Scope Letter, which tells the owner the items that are included in your bid, a description of the work proposed, and a list of exclusions and other conditions.
Use an Electrical Estimating Proposal Template to lay out your estimate for the Homeowner or General Contractor. Your bid must include the following information:
- Customer name and address
- List of Electrical Materials and Costs
- Labor Hours and Costs
- Estimate total
- Description of work
- Your business name and contact information
Add Overhead and Profit
A general rule is that overhead should be between 13 to 20% of your total sales cost. The markup for profit is generally within the range of average prices for electrical work in your area which you can check using this home pricing guide.
Before you submit your bid
- Double check your proposal and make sure it includes all the information above.
- Don’t forget to include permits and fees and other direct job expenses.
- For labor intensive items, do make sure you have allocated sufficient labor for the job.
Estimating electrical work requires some up front planning and effort, which can pay off in consistency and good processes. This is true whether you’re creating estimates for residential or commercial jobs. Once you have done the work to calculate your business costs, you’ll have a number you can plug in for your overhead. It’s also helpful to invest in electrical estimating software, which can help you to create thorough materials lists, assign labor hours easily, and calculate profit and margin so you can build a healthy and sustainable electrical contracting business.
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