Top 7 Strategies to Maximize Profit on Electrical Jobs
June 16, 2021 4 min read
A winning electrical bid is only the start of your successful job. Now that you have the job, there are at least seven ways to make sure you make the most of your opportunities for a good profit.
1. Repurpose your Electrical Materials Price List
Use the materials list you created in your estimate to ensure that you get the best prices on your materials for the job. You won’t need to retype the long list of materials you’ll need to proceed with the work – just sort the list by phases of the job and send it out to your supplier or to multiple vendors. When they respond with their prices, you’ll have a ready-made working budget.
2. Compare One or More Suppliers with Price Comparison Reports
If you’re using our electrical estimating software, Electrical Bid Manager, you can export your materials list to NetPricer to get guaranteed same day materials prices from your local suppliers.
Alternately, you can ask your local distributor to send you their periodic price updates electronically. Simply download the materials price list to your estimating program, calculate your best prices and add your mark up.
Another way to compare pricing from multiple suppliers is to generate a custom price file using two or more preferred suppliers so that you can view a line by line price comparison to ensure you get the best value.
3. Focus on Big Ticket Items with an Item Cost Report
Easily sort your materials or labor from most expensive to least expensive with an item cost report so you always know where the majority of your materials and labor costs are allocated. With your itemized list, you’ll be able to see which materials you should shop for the best prices on because they will have the largest impact on your overall costs.
An item cost report will also help you understand which items to focus on in the field: by paying close attention to the big ticket items, you’ll be able to have the greatest impact on controlling your overall costs.
4. Focus on Productivity by Budgeting Labour Hours for Each Phase
Managing labor productivity will help you to maintain your profit margins on electrical bids.
Use your electrical estimating software to calculate the total estimated number of labor hours for each phase of your project, and then track your estimates against actual labor in your job costing system.
You can also use your estimated labor to inform the number of electricians you assign to each phase of your project, and to set goals for productivity and scheduling.
5. Review Electrical Job Contract with the Project Owner
With higher commodities driving up the costs of electrical materials, it’s more important than ever to set a time qualification for your electrical bid. Every estimate should specify the length of time your bid is good for, and those time limits should match the price hold guarantees set by your suppliers.
It’s also crucial to find out whether you can re-negotiate a new bid price for projects that have been put on hold.
6. Manage Electrical Change Orders
Establish a markup rate for any change orders. This could be a selling price, or it could be the same rate as your service orders. It may be helpful to refer to the National Electrical Contractors Association (NECA) labor manual for standard acceptable rates for labor on change orders as well as materials.
Use your electrical estimating software to create a report showing labor and materials totals for your change orders so that you can get a quick approval.
7. Document Changes in the Field
Ensure your field electricians get written approval or an email sign off for all changes made in the field so that your work is approved, and the costs can be passed along to the GC.
For a review of how to complete a winning bid, please read our Complete Guide to Electrical Estimating.
Watch our video to see more details about how Electrical Bid Manager can help you manage your jobs more profitably from start to finish.