Electrical estimators often use a range of methods to complete an estimate. These include the Per Point method, which assigns a number value to each fixture (power socket, switch, sensor) and multiplies them by an assigned cost.
To create a quality estimate, it is important that prices are kept up to date and accurately translated into estimates and invoices. This will help ensure that your profits remain intact.
Unit Prices
A basic flat-rate pricing template can help you create a price list for your electrical services that field and office staff can reference during estimate and invoice creation. However, the utility of this spreadsheet-based approach is limited. Estimators still need to transfer pricing information from the price sheet to estimates, work orders, and invoices, and they may make miscalculations along the way.
Another option for estimating unit prices in an electrician price guide is to use a computerized, cloud-based electrical estimating software. This method is far more efficient and accurate than the traditional estimating methods, reducing labor and data entry time and eliminating errors that result from manual labor and data transfer.
Using software to price your electrical estimates is a great way to improve efficiency and accuracy while reducing the risk of errors. This is especially true if you use a program that automatically imports your takeoff quantities in one click and then uses historical pricing data to price the rest of the project.
For example, Countfire’s electrical estimating software automatically populates your estimates with material and labor pricing from previous jobs when you build an estimate based on the type of work you’ve done before. This ensures that your estimated cost of materials and labor accurately reflects what it actually takes to do the job while also allowing you to make a profit.
Trade Prices
With the right estimating software, you can set up a price list template that’s ready for your electricians to use whenever they create an estimate. This will help them work faster, and ensure that they’re giving customers consistent prices.
It’s important that all the parts of an electrical estimate are correctly priced and labelled so your techs can understand what they’re quoting for. You may also need to include a detailed description of the job (e.g. whether it’s a new socket installation, rewiring a 60s semi, or fitting LED lights).
If your company uses a flat rate pricing model, you can use the calculator in YourTradebase to set up a template that contains all the services you offer. This can be accessed digitally by your field and office staff, and will appear automatically in estimates and invoices.
Without a digital flat-rate pricebook, most estimators create proposals by hand, adding up the individual cost of each part they’re installing (e.g. LED light fixtures, knob and tube wiring, circuit breakers) before calculating their markup and labour rates. This process is prone to error, and can leave technicians underbidding jobs or missing out on profit.
A templated estimate makes it easier for techs to write accurate quotes, and reduces the amount of time they spend calling the office to get approvals from their managers. It’s also worth putting together a standard set of terms and conditions that can be attached to all your estimates and quotes, so your customers know what they can expect from your business.
Target Prices
An electrical contractor’s target price list is a critical component of accurate estimates. It determines your profit margin and helps you build competitive bids that increase customer trust. To create your target price list, start with a quantity takeoff of the project’s scope of work and any additional requirements listed in the plans, specifications and addendums. Then, break each item down to its component parts. For example, a duplex receptacle might include a box, plaster ring, switch and cover. These components then get transferred to the pricing sheet.
Once you have the list of components, add in your labor units, which are the hourly rates you pay your electricians plus the cost of overhead like workers’ compensation and liability insurance. Next, calculate your markup percentage, which is the additional amount you want to make above the costs of materials and labor. This will help you ensure you have enough money to cover overhead, and still have a decent profit on each job.
Using an electronic estimating software solution makes this process much faster and more accurate. Countfire, for instance, uses smart views and keyboard shortcuts to quickly confirm kits you use frequently. This saves you valuable time that can be spent on other aspects of your estimate. In addition, Countfire automatically updates prices as wire and conduit supplies fluctuate. It also includes current installation costs for common electrical work, including circuit breaker, boxes, fixtures, light switches, outlets, loadcenters, raceway and duct.
Material List
When preparing estimates for submission to customers, it’s critical that your takeoff is accurate. Any errors at this stage will only be exacerbated when you start pricing the job and creating a bid for your customer. Using an electrical estimating software with an item cost database that automatically saves each price you assign will allow you to create estimates far faster and ensure your prices are consistent.
This will also save you time and help you avoid mistakes like forgetting to include a small tool allowance, permitting fees or overhead expenses. Reviewing the drawings and specifications is also important to determine the scope of work. This will allow you to make decisions about the type of work that is right for your business and avoid jobs that are outside your area of expertise.
Depending on your business and your needs, you can use a variety of estimating methods. If you are working with a design and construct client, for example, you may want to consider a pre-build method. This works by packaging individual components into assemblies and then calculating the total number of units by assigning an assembly price.
Another popular method is line item estimating. This is typically completed by a pricing sheet with columns for description, material price, discount and labor unit. This is often used in conjunction with a pricing service that tracks supplier prices nationwide.