How to Estimate Electrical Work? Step-by-Step Guide

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Do you struggle to find better ways of creating estimates for electrical jobs? If yes, then you've landed in the right place. We'll show you how to bid on electrical jobs and accelerate your business.

The electrical contracting business is highly dynamic and competitive. You have to generate a fresh quote for each new project and follow a standard bidding process in the hopes that the client will pick your firm. Let’s not forget that there would be several electrical contractors bidding on the same electrical work. So, not only do you have to be quick with your estimate, but you also have to make sure you aren’t losing out on profits either.

The goal is to charge the potential client exactly the right price for your electrical contracting service. Ideally, it should be a price that is competitively low to win against other electrical contractors but high enough to cover the entire project’s expenses, from labor and materials costs to indirect expenses and your profit too.

This process of determining the total expense of the electrical project is known as electrical estimating. It helps you establish the range of services required for electrical work and gives the clients an insightful view of the project’s expenses.

When you are starting an electrical contracting business, one wrong move could cost you the job. It is crucial to get your estimates right for every project, whether it’s with a new client or an existing one.

And how do you generate estimate? It starts by devising a standard guide for estimating all your electrical jobs. To give you a head start, we’ve explained all you need to know about how to estimate electrical work easily and effectively.

How to Create a Perfect Bid for an Electrical Job?

The key to creating the perfect electrical bid starts with an accurate estimate. And you can only achieve this with a detailed estimating system. Your final price should satisfy the client and still keep your business afloat. You definitely shouldn’t bankrupt yourself trying to bid lower than your competition.

This means there are certain crucial factors you’d have to consider when calculating the cost of an electrical wiring job, be it residential or commercial.

The steps below together make up a tried-and-true electrical estimating strategy on how to bid on electrical jobs:

    1. Choose the appropriate projects.

    2. Examine the requirements.

    3. Review the designs.

    4. List the supplies that are required.

    5. Determine labor costs.

    6. Create the estimate.

    7. Factor in your profits and operating costs.

    8. Craft a proposal.

    9. Verify each item twice.

1. Choose the appropriate projects

This isn’t a step in the estimation process, generally speaking. However, electrical contractors should be picky when selecting projects to bid on.

As an electrical contractor, you should never say “yes” to every job or client that comes your way. You may have to pass on many jobs, but if you wish to grow your electrical business, first understand your niche or area of expertise. Know whether you’re best at industrial electrical projects, commercial projects, residential electrical jobs, or a mix of the three.

how to bid electrical jobs: select the right projects for electric estimate

Each of these job types has a unique set of requirements that experienced or expert electrical contractors can fulfill, depending on the difficulty level. Thus, the first step to bidding on the right electrical job is to identify the scope of your specialties.

Figuring out your niche helps you focus on bidding for projects you can deliver beyond your client’s expectations. It also prevents you from bidding on work in which you have limited experience. A lack of experience may increase your chances of making mistakes, which can ultimately cause you reputational damage and financial loss.

Therefore, it is wise to stick to the projects you can handle. And as you gain experience, you can gradually expand your horizons.

2. Examine the requirements

Where does the project stand in terms of its present electrical situation? Are there any abnormalities or oversights? What do customers expect from the new electrical work if you win the bid? You have to analyze the project specifications carefully and deduce the answers to these questions.

Unless you get the specifications right, you cannot know what type of work you’re expected to provide. And without that clarity, your estimates would suffer. You would end up underquoting or overestimating and eventually losing the bid in both cases.

The only way to avoid such a scenario is to cautiously examine what is required of you and compare it with the current electrical state of the project. Get your doubts cleared and include alternatives or suggestions if you feel the need to do so. Be sure to obtain approval in writing for these edits to avoid future disputes. The clearer you are about the specifications, the more precise your estimates will be.

3. Review the designs

As an electrical contractor, you may receive drawings, graphics, and blueprints along with the RFPs for a project. All these give you an in-depth idea of the electrical requirements of that job. Make sure you study these visuals closely to get a clear sense of the work.

how to bid electrical jobs: analyze the drawings for electronic estimate

However, if the blueprints are not provided, ensure that you ask for architectural images of the site to understand all the technical details, including working elevations and heights. Apart from that, do not forget to note the premise’s current plumbing and HVAC system wiring.

What if the blueprints are unavoidably unavailable? In that case, arrange a walk-through or site visit to assess the scope of work. These technical factors affect material costs and labor costs, as well as equipment requirements. Failing to consider even one of these aspects can make your material estimates inaccurate, rendering your entire process and efforts ineffective.

Pro Tip

Look out for any disparities between the labeled specs and drawings, note them down, and bring them to the client’s attention.

4. List the supplies that are required

The accuracy of your estimate depends on how precisely you can determine the materials needed to finish the job, along with their quantity. This task of listing down the materials is known as “material takeoff.” Material takeoff, which acts as a type of electrical material price reference, is a significant component of the cost estimation procedure for many construction projects.

The line item of your list should include every material you would use for the electrical project, from circuit breakers, light fixtures, and receptacles to the number of electrical outlets, panels, and switches. A detailed breakdown of the necessary materials simplifies project execution and helps you make a near-accurate estimation of the total material cost.

5. Determine labor costs

Once you’re clear on the scope of work as well as the material takeoff, it’s now time to assess the project’s labor requirements. How many workers would you need on-field and off-field? How much would you pay each of them? What would be the pay rate? Finding answers to these questions is central to calculating the total expected labor cost of your electrical contracting job.

how to bid electrical jobs: calculate labor costs for electrical estimate

While some electricians prefer hourly wages, some workers charge an upfront fee for the entire project. Make a list of the hourly and upfront compensation, and add up both numbers. Ideally, you should have a list of electricians you typically call for large projects. If you don’t, ask around for the usual hiring price and use that to make your estimate.

Determine the total number of hours you think the project will take and multiply it by the sum of the wages. Don’t forget to keep a window open for accidental damage and overtime hours. That way, you would get a precise cost of labor, which would boost the credibility of your electrical estimate.

6. Create the estimate

Now that you have all the essentials figured out—the project scope, labor hours, and material needs with their respective costs—it’s time to put them together in an estimate. You could use your previous estimate template or create one from scratch. Whichever way you choose, make sure it’s precise, itemized, and easy to understand.

how to bid electrical jobs: create the estimate for electrical work

Besides an electrical work pricing guide or template, you can also use electrical estimating software to create a cost estimate for any electrical work. These systems come with a range of estimating templates that are sleek, professional, and error-free. They also automate typical manual processes, so you can complete estimates in half the time and with less stress.

Reading an electrical price guide book can also help you estimate costs accurately without spending an extra penny.

7. Factor in your profits and operating costs

At the end of the day, you are running a business. And you have to make a profit to survive. Therefore, your estimates must include your profit margins as well as overhead costs.

Once you’re done summarizing the overall job cost, add your profit markup for each section. However, make sure the markup is in line with the standard rates in your local area. Remember to factor business overhead expenses like insurance and transportation costs into the estimate.

The general overhead percentage tends to range between 12% and 20% of your business’s sales costs. It may vary based on the size and scale of your operations. So, give it careful thought before adding the final numbers to the estimate.

8. Craft a proposal

More often than not, electrical estimates make up a small part of the larger proposal that you submit for the bidding process. Thus, once you have the final cost price of the electrical work ready, build a professional proposal.

It should detail every component your estimate includes and those it excludes as well. You should also outline the terms and conditions for the successful completion of the project. Keep the language simple and similar to the project specification document. Doing all this saves both parties from future conflicts, builds trust, and helps you start on the right note.

9. Verify each item twice

Before you hit the send button to submit the final estimate to your prospective client, review your proposal thoroughly. Ensure there are no mistakes, from material and labor costs to the final project quote.

Recalculate the numbers. Double-check client details, including their name and address. Correct any mistakes you come across, and ask a trusted person to proofread the document for you. When you’re done, hand over the final proposal and keep a copy for your records.

Now the hard part is over, and the wait begins. If you’re lucky, your potential client will pick your proposal from the myriad of bids littering their inbox. But don’t fret; you can’t go wrong with this detailed guide. All you have to do is follow the steps above to nail those bids and spike your business’s bottom line.

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Frequently Asked Questions
  1. How do you calculate electrical work?

    For the purpose of calculating the cost of electrical work, all you have to do is multiply the hourly labor rate by the estimated number of working hours required to finish the electrical work. Make sure to include any additional supplies needed for the project in the final cost estimate.

    You should focus your hourly rate for electrical work on the following factors:

    • The extent of labor work required.
    • The necessary supplies.
    • Any additional expenses related to the work.

    When figuring out how to estimate electrical work and estimating costs, it’s critical to consider the job’s magnitude and difficulty in mind.

  2. How to bid on commercial electrical jobs?

    • Selecting the appropriate project is the first step when preparing an electrical work bid.
    • Reviewing the tender documentation, making a conceptual design, asking suppliers for quotations, and estimating labor, overhead, and profit margin are the next steps.
    • In the final step, the proposal is created, reviewed, and sent to the project contractor.

  3. How to stand out with electrical work estimates?

    You may employ accounting experts to assist you in developing accurate and professional estimates, or you can use professional estimating or invoicing software, like InvoiceOwl.

    The software provides estimation templates for electrical businesses and has special functionalities for estimating, invoicing, real-time tracking, and payments. A customized estimate template for electrical businesses will save you time, guarantee uniformity across all estimates, help in job management, and reduce mistakes.

    So, if you want to stand out with a professional electrical work estimate, InvoiceOwl is the best solution for you.

  4. How detailed should an electrical estimate be?

    As a general rule, you have to be as specific and detailed as you can with your estimates for residential electrical services.

    What clients like seeing when receiving an electrical estimate are as follows:

    • Name and address of the client.
    • A summary of the work
    • Your business’s name and contact information.
    • A thorough analysis of the work.
    • The overall cost.

    For your client’s benefit, if you are creating an estimate for a construction project or any other complex project, the analysis of the task should include labor, supplies, and any additional costs or minor expenses.
    Ensure you indicate whether taxes are included in the final pricing or not.


Creating an electrical estimate is a difficult process. You have to make sure there are no loopholes or unreasonable prices that could cost you the project. In this blog, we’ve explored a simple checklist of steps to implement when estimating the total project cost of a job.

Feel free to adapt these steps to suit the standard operations of your business. These steps would help structure your estimating operations and speed up the entire bidding process.

But an electrical estimating software can truly streamline and speed up your estimating process. If you’re spending a lot more time drafting an estimate, InvoiceOwl can help you generate quick estimates with easily customizable predesigned templates.

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Author Bio
Jeel Patel
Jeel Patel

Jeel Patel is the founder of InvoiceOwl, a top-rated estimating and invoicing software that simplifies the invoicing and estimating processes for contractor businesses. Jeel holds a degree in Business Administration and Management from the University of Toronto, which has provided him with a strong foundation in business principles and practices. With understanding of the challenges faced by contractors, he conducted extensive research and developed a tool to streamline the invoicing and estimating processes for contractors. Read More

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