Accurate estimates are the first step in creating the perfect electrical bids. These bids are usually complex and require careful evaluation with a detailed estimation system. Your final bid price should satisfy your client’s needs and keep your business afloat. Your lower bids should not bankrupt you while trying to bid lower than your competitors. It means you need to consider certain factors while calculating the cost of electrical projects, whether residential or commercial.
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Here are the steps that you need to follow while making an electrical estimating strategy:
1. Choose the appropriate projects: The first step that can lead you toward success is picking suitable projects in electrical contracting. Being an electrical contractor, you should not say yes to every kind of jobs or clients that come your way.
Instead, you should pass on the projects that may not be relevant to you. The first thing is to find your niche or area of expertise. Find out what you are best at, such as commercial projects, industrial electrical projects, residential jobs, or even a mix of all three.
Based on the level of complexity, each of these types of jobs comes with specific requirements that experienced or expert electrical contractors can meet. As a result, the initial step in bidding for the right electrical project involves defining the boundaries of your expertise.
It helps you identify your specialized area and enables you to concentrate on bidding for projects where you can meet and exceed your client’s expectations. Additionally, it safeguards against venturing into projects where you lack substantial experience. Undertaking work outside your experience can elevate the risk of errors, potentially damaging your reputation and causing financial setbacks.
2. Find out the requirements: You need to understand the current electrical situation of the project and any issues that might be present to make a successful bid. It is crucial to know what customers expect if you win the bid. You should carefully review the project specifications to get this information.
You will know what work is required if you know the correct specifications. It may result in bidding too low or too high, which could result in losing the bid.
Take a closer look at what is needed and compare it with the project’s current status to avoid these issues. The more clarity you have on the project, your estimates will be more accurate. If you need questions or changes, you need to discuss and get approval for any alternatives to avoid future disagreements.
3. Review the designs: Being an electrical contractor, you may receive drawings, blueprints, and RFPs of the project. These documents will give you a good picture of the electrical requirements of the job. You need to study the visuals to understand the work well.
But if you don’t get the blueprints, then you need to ensure that you ask for architectural images of the site to find out the details. These images will help you get an overview of the technical details, such as elevations and existing plumbing and HVAC system wiring.
If you don’t get images, you should get a walk-through or visit the site to assess the scope of work. These technical details can influence the material and labor costs, and overlooking them can lead to inaccurate estimates.
4. Create a list of supplies: The accuracy of your estimates depends on how accurately you can determine the materials needed to do the final job with the right quantity. The task of listing the material is known as a material takeoff. It is a crucial part of the construction job, including electrical work.
Your list should include everything you will use for the electrical project, such as circuit breakers, light fixtures, outlets, panels, and switches. By breaking down all the needed materials, you make the project more manageable and get a pretty good idea of how much it will cost. It helps you plan your budget more accurately.
5. Determine labor costs: You can assess the labor requirement of the project after you have clarity on the scope of work and material takeoff. You need to find out the answers of the following questions such as
- How many workers do you need on the field and off the field?
- How much you would pay them?
- What would be the pay rate?
The answers to these questions will help you calculate the total labor cost of the electrical contracting job.
Electricians may charge for their services in different ways. Some prefer hourly wages, while others set a fixed fee for the entire project. To create a reliable estimate, list hourly rates and upfront project fees charged by electricians. You should already have a list of electricians you typically hire for larger projects. If not, inquire about the typical rates in your area and use this information for your estimate.
Next, calculate the total hours you anticipate the project will require. Multiply this by the combined cost of labor based on the rates you’ve collected. Remember to account for potential unexpected expenses and overtime hours. This approach will give you an accurate labor cost estimate, enhancing the credibility of your overall electrical estimate.
Once you have gathered all the details, it is time to compile a comprehensive estimate. Making a bid teaches us the value of careful planning and extra effort. You can use electrical estimation software to create cost and error-free estimates. Moreover, it helps to simplify the manual processes involved in the estimation. And you can complete the estimates in significantly less time and reduce stress.