What is Electrical Estimating?

Over 81,045 electrical estimators are employed in the United States, and these estimators play a crucial role in determining the costs associated with electrical work.

It is a fairly common goal among contractors to achieve a high return on every project in electrical estimating. However, electrical estimating is a complex and tedious process, as any sort of inaccurate estimates leads to unhappy clients, budget issues, and lost profits.

That is why a proven electrical estimation approach is valuable for construction companies.

What is Electrical estimating?

Electrical estimating is the process of calculating the total costs associated with the electrical components and systems for a construction project. It includes estimating costs for:

• Materials

• Labor

• Overhead Costs

• Permits & Fees

• Profit Margin

And any other expenses required to complete the electrical work.

The goal of electrical estimating is to provide an accurate projection of the total budget required to cover all electrical aspects of a construction project before it begins.

The final step is a detailed list of what the electrical work will cost. Getting it right is important as this helps plan your budget.

If you bid too low, you lose money, and on the other hand, if you bid too high, you miss out on good deals. This list becomes your map to keep everything on track during construction.

Electrical Estimating Methods

The estimates you generate will become the basis of how your projects will progress. There are various methods used in electrical estimating to calculate the cost associated with electrical projects. Here are the methods:

1. Unit Cost Method:

This method assigns a fixed dollar amount to each type of fixture or installation point. The total estimate is calculated by multiplying the quantity of each unit by its assigned cost. It's simple but can be inaccurate.



Estimating in this way is typically easy, but manual calculations are prone to inaccuracy. It does not take into account differences in labor.

2. Assembly Estimating:

With the assembly estimating technique, electrical components are bundled into pre-defined assemblies or systems, each with an associated cost.

Electrical estimators frequently use this method to incorporate both labor unit costs and material costs. Rather than considering each hardware or fixture as a single entity, the necessary materials are viewed as having multiple components.

Assembly estimating is more precise and useful than unit price estimating, as unit price estimating provides a flat rate per unit of measurement.

3. Labor-Unit Method:

The labor unit method assigns a value, measured in units, to the human labor needed to install each piece of hardware.

The labor unit method may be more accurate than the per-point method because it allows for a more reasonable calculation of labor conditions. However, there are still common pitfalls. For instance, people may forget to include 'labor burden' costs, which are costs associated with the workforce that are not directly related to their work, such as sick leave, holiday pay, insurance, or taxes.

When using the labor unit method, it is important to distinguish between different working conditions to avoid inaccurate estimates.

4. Design and construct:

The electrical estimator who uses this design and construct method needs to have extensive knowledge of design methodology.

In the design and construction method, the electrical contractor is responsible for both designing and implementing the project. The customer provides a design brief outlining their parameters, and the electrical contractor completes a more detailed design before proceeding with the electrical construction.

It can be a complex estimation method as you may have to work within the client's budget and provide an accurate forecast.

5. Guesstimate:

Making assumptions without proper analysis can lead to highly inaccurate results that fail to account for the complexities of the job.

But on the other hand, highly experienced individuals might be able to make the guesses with some accuracy, especially when someone who has been doing this for years. So, if you have less experience, avoid going with this approach.

6. Electrical Estimating Software:

Electrical estimating software can be the most effective approach for getting highly accurate cost estimates for both small and major construction projects.

Compared to manual estimating techniques, the software can get accurate electrical estimates. This software takes input of all variables and specifics of the project, such as materials required, labor types and hours, site factors, and electrical, to generate the meticulous cost estimate.

The software ensures that even tremendously complex projects with thousands of components and labor hours are methodically accounted for in the estimate. It consistently delivers speed, precision, and reliability that manual techniques cannot match.

How do you do electrical estimation the right way?

Creating accurate electrical estimates is one of the most important and critical skills in the construction industry. As electrical costs vary based on materials, labor, permits, and other factors, developing precise electrical estimates requires time-tested methods. Here is how you can you it right way.

1. Choosing the Right Projects:

One of the most crucial starting points in creating an accurate electrical estimate is selecting the right type of project to bid on in the first place. Estimators should avoid bidding on electrical work that involves services or building types where they have limited hands-on experience.

Without a solid background in a specific field of electrical contracting, estimators will lack the historical data and cost benchmarks needed to produce a precise quote. For example, an electrical firm experienced mainly in residential and light commercial work would struggle to properly estimate costs for a large industrial job.

Taking on electrical projects in unfamiliar territory also means a steep learning curve during execution if the bid wins, further eating into profitability. Essentially, a bid is only as good as the experience and expertise behind it. Specialization pays off through rock-solid estimates grounded in experience.

2. Study the drawings:

It is important to thoroughly review all the relevant drawings and documents to accurately estimate costs and labor for the project. Examine the full architectural drawings to have a comprehensive understanding of the overall scope of work.

Check for anything that may add complexity to the project or impact the necessary materials and equipment.

Pay attention to a building's:

• Plumbing

• HVAC

• Elevations

Pay attention to dimensions, layouts, and working heights as they may impact material quantities, equipment needs, and labor requirements across all trades.

Develop a clear list of questions and issues that require clarification before creating a final estimate. Thinking holistically about the documents can help uncover disconnects between drawings or specifications that could result in change orders or delays if not addressed early.

3. Confirm the specifications:

It is crucial to review the specifications in the request for proposal when participating in the bidding process. Commonly, RFPs use complex language, which can be difficult to understand. However, analyzing the specifications of the RFP can truly make the difference between moving to the next round or instant disqualification.

Study the current electrical circuitry, including circuits and subpanels, of the house that you will be working on, as it will help you to ensure the success of your RFP. However, if you see anything unusual or a possible mistake, be sure to point it out in your proposal.

Also, ensure that you comply with the building codes and state and local regulations while working on a project. Check for legal issues, such as contract disputes, that may arise later.

4. Perform a material takeoff:

Performing a material takeoff is essentially taking inventory of all the materials needed for a construction project. Think of it like making a detailed shopping list based on blueprints and specifications. The material takeoff sheet may include the following:

• Electrical wiring

• Switches

• Switchboards

• Light fixtures

• Conduit

This list helps you estimate the project cost accurately and improve your project planning. It also helps to find out potential challenges and mitigate risks.

5. Calculate your labor costs:

Once you have identified the full requirements of the job, you can find out how many electricians you need and how long it will take to complete the project.

Identify the hourly rate of your electricians using Bureau of Labor Statistics data and calculate their hourly costs for completing the job.

Here is the formula to calculate the labor cost. It gives you the total estimated labor cost for the electrical work.

Hourly labor rate x number of labor hours

Electricians typically charge by the hour for residential or commercial electrical work.

6. Add Overhead and Profit:

Only charging for labor and materials will result in a loss of money. Calculating labor and material costs is not enough to make a profit from a job. It is important to factor in overhead costs, such as transportation and the cost of electrical equipment and tools, to ensure that all expenses are covered.

A general rule is that overhead should be between 13 to 20% of your total sales cost.

Add a markup for profit based on the average prices for electrical work in your area and the desired profit margin for each job to estimate the final cost.

7. Create your electrical estimate:

After you have considered all the elements, you need to create a proposal that clearly shows what is included in the bid. Generally, electrical contractors provide lump sum bids to provide a fixed fee that covers everything in the bid.

It is important to clarify any inclusions or exclusions to avoid confusion once the project is awarded.

It is important that you double-check all the information before you present the final bid.

Conclusion:

It is true that estimation requires a lot of work, planning, and effort. The estimation could go up significantly if you don't have things in place.

Knowing how to create a professional-looking estimate will help you win more jobs. It is where electrical estimation software is an easier way to get your work done accurately and quickly.