How to Estimate an Electrical Job? A Comprehensive Guide

What are Different Estimating Methods?

When it comes to the estimating process, there are three methods –

1. Unit Cost Estimating

Electrical contractors break down the project into units of work to price the work individually.

2. Assemblies Estimating

In this method, you need to consider the estimated cost of all the assembled products, no matter how small they are.

3. Square Foot Estimating

This method is usually useful for residential sites and works on a per square foot concept. Here, professionals need to consider the total square footage of the space while estimating the cost.

Why Are Estimates So Valuable?

Estimates are important for many jobs regardless of their nature. Generating and sharing a perfect estimate is a first impression on the client. Moreover, it conveys the following details:

• Information about the project scope
• Covers all crucial points instead of unnecessary tasks
• Estimates present a clear picture of the work scope, material needed, and expected cost
• A well-prepared estimate helps resolve disputes and offers legal protection
• A proper estimate always enhances trust between contractors and clients. Thus, it is helpful to establish a healthy relationship between both parties and boost business growth

How to Estimate an Electrical Job? Read the True Guide

Choose the Right Electrical Jobs

You might have heard, always saying Yes is dangerous. The same applies to electrical jobs. You must bid and take that electrical job for which you have full confidence, experience and knowledge.

This is an honest commitment that you must make to every client. In case if you bid on a job for which you are not qualified, it will be dangerous for you and your clients.

So, before bidding on the electrical job, have a proper understanding of the work and clients’ requirements to avoid future trouble.

Review Specification & Confirm

Have you made a mindset to bid on the commercial electrical job? Wait, it’s crucial to review the request for proposal RFP that you received. This document will outline the project specifications. If you find yourself confused at any point, feel free to ask the authorized person or relevant party for clarification.

There are some factors that you need to take into account when reviewing the bid and specification. Here are those:

Be sure that you complete the job within the expected time period of the client. If the client needs to complete the job in one day and you take four days, it will be a total loss of the job.

Job duration is another factor in estimating electrical projects. You must have a clear and open discussion with your client regarding job duration. This is because a long job duration is more prone to flexibility.

Furthermore, you must pay attention to the supply of electrical materials. In many cases, builders and developers supply the electrical materials. In this case, you must be careful and have clear points about who will supply the material and which party will handle the material costs.

Recheck the BluePrint

Once you bid, you will get a drawing or blueprint of the electrical project. This is a kind of visual presentation of the site where the project will take place. Usually, these drawings are shared by the site owner but still, if you didn’t get them, don’t hesitate to conduct a site survey.

However, you may encounter some challenges in your work. Some of them are as follows –

• Plumbing fixtures
• Home layout
• HVAC wiring

List Out Materials & Equipments

This is a material takeoff process. Once you get the blueprint of the site, the next step is to list out the materials and equipment you will need for the electrical project. Some of the common things you will need are as follows:

• Electrical wiring
• Switchboards
• Switches
• Conduit
• Circuit breakers
• Energy efficiency upgrades
• Electrical switches and outlets
• Backup and emergency systems

The major purpose of material takeoff is to identify the material costs when you are estimating electrical work.

When you start the takeoff process, it’s crucial to know the current prices. Therefore, whenever you list out the equipment, you must share it with your supplier to ensure you are charging the current price. If any price is outdated, urge suppliers to update the same. Many electrician contractors make a wrong estimate due to a lack of current price status.

Calculate Your Labor Costs

Labor costs are one of the most important factors when it comes to estimating an electrical job. For this reason, you must have a clear understanding and calculate labor costs using the below formula:

Hourly Labor Rate x Number of labor hours = Total Labor Cost

The hourly rate is identified by determining the number of people completing the job and then adding up each of their hourly pay rates.

The average pay for an electrician is $23 to $27 per hour when you pay on an hourly basis.

This is an hourly rate method but you can also consider a piece rate system. In this method, the contractor will pay based on the electrician’s work output. This is a common concept in construction work.

Add In Your Overhead Costs

Calculating overhead costs is another important factor when you sketch out electrical work estimates. These overhead costs are some operational expenses, essential for the business operation.

Some overhead costs are as follows:

• Fuel expenses and vehicle maintenance
• Office lease
• Taxes and installments on business insurance
• Equipment like mobiles, tablets, and computer
• Electrical tools

You can determine the hourly overhead cost using the below formula –

Total overhead cost in a month / No. of billable hours in a month

Now to calculate the overhead costs for an electrical job, you can use the below formula –

No. of hours the job will take to complete x hourly overhead costs.

Knowing proper overhead costs is essential. It might be difficult to earn money for you in case you have no idea of your overhead costs.

Your Profit Margin and Add a Markup

The profit margin is the money that you make after covering all costs. Markup is the amount that you take after applying the profit margin.

Now, suppose your profit margin is 10%. Then use the below formula –

(Overhead cost + Hourly rate + Material cost) x .10

After that, add the markup to the cost estimate and get the total price for the electrical work. You can use the profit margin calculator.

Costing to the Estimate

Now let’s see how you can price your electrical estimate. There are two methods for it –

1. Multiplier method
2. Net profit margin

In the multiplier method, you need to multiply the desired net profit margin by the total estimated project cost.

For example, lets assume the following figure –

Estimated project cost – $200,000 and if you have net profit of 10% then costing will be as follow –

Total cost = cost x (1+ Profit Percentage)
= $200,000 x (1+0.10)
= $2,20,000

In the other method that is divisor method, you need to follow the below the formula –

Total cost = cost / (1 – Profit Percentage)
= $200,000/(1 – 0.10)
= $200,000/0.9
= $222,222

Create Your Electrical Estimate

You have covered everything, and now it’s time to create your estimate for electrical work. But wait! Are you thinking of using pen and paper? No, it’s the digital era and a time to create digital estimates.

First of all, you need to buy the best estimation software like Moon Invoice and explore its 66+ customized estimate templates. Choose your format from Word, Excel, PDF, Google Sheets, and Google Docs. The software offers a comprehensive solution to streamline your electrical estimating process, utilizing advanced features for smarter management. Professionals can easily convert estimates into invoices.

Details to Cover in Electrical Estimation –

• Business Details & Customer Details
• Estimation Details (Date & Number)
• Electrical job details along with a breakdown of the cost
• Applicable tax
• Terms and Conditions

How to Create an Electrical Estimate?

We have already mentioned that you need to choose high-performing estimate software. Once you are done with that, follow the below steps –

1. Download the free electrical estimate template
2. Add the estimated number and date
3. Now fill in your business name, corresponding address, and contact details
4. Similarly, fill in your customer name, corresponding address, and contact details
5. Include the details of the electrical job along with the cost
6. Include the tax and discount (if applicable)
7. Add the terms and conditions
8. Review the details once in the last

You can figure out accurate electrical estimates by utilizing an electrical work estimate calculator.

Tips to Follow When Sending an Estimate

• Keep the estimate format clean
• Choose the professional layout
• Include all the essential details correctly
• Research the current market and consider the latest price
• Breakdown the cost according to the service for better understanding
• Don’t forget to include the estimate number, as it helps to track an estimate
• Always send an estimate on time while avoiding delays
• Utilize professional estimate software
• Maintain a proper transparency for your client
• Offer service guarantee or warranty if possible
• Highlight the total cost

How Quote and Estimate are Different?

Quotes and estimates have different concepts. When a business professional issues a quote, it reflects the fixed cost of the work. Both business and client make an agreement on these prices. Hence, no modification is done during the project flow.

Estimates, on the other hand, present only the expected cost of the project. In this case, modifications to the price may take place during the project. Hence, estimates are more flexible than quotes.

In the case of an electrician project, generating an accurate electrical quote is a little bit difficult. Therefore, generating an estimate is a better option which offers flexibility.

Verdict

How to estimate an electrical job? We think we have given satisfactory words on this question to explain the answer.

Remember that estimating is not a guessing approach that needs proper research and a little bit of hard work. It doesn’t matter if you are creating an electrical estimate for a commercial or residential site. You must figure out a proper estimate after making some effort and planning.

Meanwhile don’t forget to invest in estimating software like Moon Invoice.

Frequently Asked Questions