Increase Profits by Identifying Hidden Costs when Estimating Electrical Projects Part 1

When estimating electrical projects it is vitally important that you recognize and account for hidden costs on projects. It is part of the “Crossing your “T’s” and dotting your “I’s”.

This writing helps identify hidden costs in electrical projects and explains ideas how to cover those costs.


Examples of hidden costs to be aware of

  1. Mobilization expense

  2. Expendable tools expense

  3. Truck & tool expense

  4. Delivery charges for rental equipment

  5. Fuel cost

  6. Labor and fuel cost for testing generators

  7. Drinking water

  8. Storage expense

  9. Contingency expense (Expenses that cannot be predicted with certainty)

Mobilization (to mobilize) in construction means to move equipment on (mobilize) and off (de-mobilize) a job. Mobilization may require labor hours for someone moving job boxes, ladders, man lifts, and equipment to the job site.

Small jobs may not need mobilization expenses added, however it is a good idea to include truck & tool expense on small jobs to cover that expense.


When you add truck & tool expense (dollars) to all estimates of small jobs, it can add up to thousands of dollars a year and helps cover expenses.


See Truck & tool expense below


On larger projects mobilization may be ongoing as a a project progresses.

Example: when working in a multi-story building, job boxes must be moved from floor to floor as the job progresses. Labor is required for that task.

As an electrical estimator, mobilization expense would be included in your estimate by adding dollars, labor hours or both to cover the expense.


Expendable tools expense


Expendable tools are tools that wear out like hole-saws, drill bits, saw blades, etc. It is important to add dollars for this expense.

Note: Some estimators add expense for expendable tools to the contingency cost instead of adding a line item for them. See contingency expense below.

If you decide to input expendable tool dollars as a separate line item expense calculate the expense and add it to your estimate.


Truck & tool expense

When personnel drive company trucks to a project, it costs money. Often times tools are also used from the truck.

Adding dollars to your estimate for truck & tool expense helps recoup your costs.

Determine a dollar amount to charge per-day-per-truck.

It varies greatly how much people charge for truck & tool. I have seen daily charges from $35.00 to $75.00 a day or more.


Calculate how many days each truck is to be on the project. Add total dollars to add to your estimate.


TO BE CONTINUED


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