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Estimation for Electricians Part 3: Plan the Products and Additions for the Estimate

Date: Oct 6, 2014

This is the third installment of Estimation for Electricians. How can you plan for the products and additions to your estimate?

This series is dedicated to helping you understand how to make profitable decisions for your electrical contracting business.

The cost of products (with a margin) should be just one element of your estimate. Consider labor rate, overhead and profit when estimating.

Once you’ve finished your counts for supplies, resources and equipment—the LED lamps you’ll need for a lighting system, for example—you can send the counts to your suppliers for their lead time and cost estimates. Don’t forget accessories like controls and sensors.

You’ll usually be provided the necessary information regarding devices and equipment, but always cross reference the given voltage, amperage and number of conductors with National Electric Manufacturers Association and National Electric Code information.

Pay close attention to whether the equipment will be used for an indoor, outdoor or hazardous application because, as you know, they’ll have different code requirements and costs.

You also need to plan for additions like the labor rate, overhead and profit in your estimate.

Labor Rate

After you’ve calculated your costs, take a hard look at labor.

For buildings more than four stories tall, labor escalation rates are 1–2 percent per floor, meaning items needing to be installed on the 10th floor will take longer and cost more to install than items installed on the first floor.

Overhead

Did you consider overhead earlier? You can add your overhead within your labor rate or you can include it as a separate line item.

Profit

In addition to how much the project will cost to finish, you need to make a profit on your work. According to Electrical Construction & Maintenance, many estimators only add 2–5 percent profit into the bid because the market is so competitive.

A good tip to ensure your estimate is accurate is that for an average job, your materials plus quotes should equal one-third of the total anticipated cost of the project, according to Electrical Construction & Maintenance.

This is the third installment of Estimation for Electricians. Stay tuned for one more article to help you make profitable decisions for your electrical contracting business.