If you want to enjoy a stable and lucrative career as an electrical contractor, it’s important to optimize the way you handle estimating.
This could mean the difference between winning new clients and losing out to better-equipped competitors. Or worse still, you might earn the contract, but end up in the red because your original calculations were way off the mark.
To help you avoid making common mistakes, here are the most important steps to take when putting together an estimate.
Pick appropriate projects
Before you can make accurate estimates for electrical projects, you need to ensure that the jobs you are bidding on are actually suited to your skills, experience and resources.
Chasing major projects when you aren’t really ready to handle them is not wise, and you will probably be unable to assess expected costs in this instance. So stick with jobs that are within your wheelhouse, rather than overstretching early on.
Check the specs
All construction projects should have specifications that define things like the quality and quantity of the materials required, which of course will have to be taken into account in your estimates.
A well-constructed bid will showcase that you have looked into the specs and pitched appropriately. This will also prevent you being blindsided by material costs once the ball is rolling.
Obviously things can get quite complex when all of the variables are considered, but the good news is that modern bidding software for electrical work takes the sting out of the estimating process.
Examine the plans
Costs will vary wildly depending on the on-site factors as well as the specifics of the project itself. As such, the plans will be useful in giving you a clearer idea of everything from the likely labor expenses that will be incurred, to the kinds of equipment that will be needed to fulfill the original vision.
The plans drawn up by the architect are your best friend here, and if there are specific electrical drawings to follow then all the better.
Remember to refer back to the specs at this point, as you may find that the plans don't quite align with the requirements mentioned here. You can then raise questions and ideally get answers before settling on an estimate.
Put together an inventory
Even if the plans specify the number of items needed from an electrical standpoint, it is still worth double checking this yourself.
From fixtures and fittings to cabling, paneling and beyond, it is sensible to take stock of the quantities involved in an organized way. Creating a spreadsheet to track this will make your life easier.
Contact suppliers for quotes
With your inventory to hand, you can get in touch with suppliers to find out how much it will cost to tick off every item in the list.
The larger the order, the better the value at your end, so bear in mind that buying in bulk from a single supplier may enable you to conjure up a more competitive estimate for your client.
Calculate base level expenses
Once you have quotes for the materials, you need to factor in the labor costs for each item and multiply this by the number of items in a given category.
Obviously your labor costs expectations have to be influenced by your own knowledge and experience, as well as that of your team. If you have a lot of discrete tasks to take care of, but you are confident you can do it in a short timeframe, this is all well and good.
Just be realistic at this point, or else your estimate could give the client a false impression of a project’s potential deadline.
Another thing to add in at this point is the project-specific costs which don’t come under materials or labor. This might include the rental of a particular piece of equipment that you only require for a limited time, and is therefore uneconomical to buy outright.
It could also feature the expected costs of any subcontractors who you might need to bring onboard for a particularly large-scale project.
Even the smallest operations have overheads to consider when estimating electrical work, so it’s perfectly reasonable to include them in your pricing.
Running a business costs cash, whether that be for backend office admin, travel, leasing a premises or anything else. You should have a running total for all these expenses, and use a chosen percentage to bolt onto the jobs you bid for.
The same goes for profits, as you want to ensure that you are reliably earning more from a job than it costs to complete.
When bidding you have more flexibility with your profit percentages, so you might be willing to take a hit here if you think it will lead to more work in the future. But don’t sell yourself short or leave yourself out of pocket unnecessarily.
Put together a bid
Armed with the calculations you have made so far, you are ready to construct your bid for a project, in which your estimated price will sit front and center.
While you don’t need to break down your costs in this document, and should instead offer your estimate as a lump sum, it does help to explain what the client will be getting in return for their payment in plenty of detail.
Go over your bid with a fine toothed comb
Before you send off an estimate to a prospective client, proofread your bid and double check the figures you have included in it.
Making mistakes in your calculations is less likely if you use bidding software, as mentioned earlier. Even so, attention to detail at this point could save you a lot of pain further down the line.
If you are satisfied with your estimate, the only thing left to do is submit it and wait for a response from the client.
Whether you are successful in securing a project or not, you can always glean more use out of your estimates by checking them over before submitting your next pitch. Learning from past mistakes is the only way to grow your business.
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