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

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Are you an electrical contractor? – Are you an electrical contractor struggling to find better ways of creating estimates for electrical jobs? Do you need an in-depth guide to the perfect electrical work estimate? In this blog, we will take you through the electrical estimating process in detail and show you how to bid electrical jobs so you can secure more 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’d be several electrical contractors bidding on the same electrical work. So, not only do you have to be quick with your estimate, you 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 enough to cover the entire project 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 works and gives the clients an insightful view of the project’s expenses.

Since one wrong move could cost you the job, it is crucial to get your estimates right or every project, whether it’s with a new client or an existing one.

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

How to Bid on Electrical Jobs

The key to creating the perfect electrical bid starts with an accurate estimate. And you can only achieve this with a detailed estimating process. Your final price should satisfy the client and still keep your business afloat too. 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. We will look at those factors below.

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 off many jobs but if you wish to grow your electrical business, first understand your niche or 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 for 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 for work in which you have limited experience. A lack of experience may increase your chances of making mistakes and 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 move into new horizons.

2. Review the specifications

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. Analyze the drawings

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 scope 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, turning 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. Identify the necessary materials

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.

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. Calculate labor costs

Once you’re clear on the scope of work, as well as 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 with the sum of the wages. Don’t forget to keep a window 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.

7. Include your profit and overhead cost

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% to 20% of your business’s sales cost. It may vary based on the size and scale of your operations. So, give it careful thought before adding final numbers to the estimate.

8. Develop 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 too. 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. Double-check everything

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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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 and is the main curator & writer of the content found on this site. With ideals of quality, commitment, and perseverance, he believes in creating lasting business relationships with the clients.


Navi Mumbai (Reliance Corporate Park)