Adam Howard
- Mar 22, 2022
- 5 min read

Is Electrical Estimating Software Right For You?

Updated: Apr 1, 2022

Estimating any sized job can be daunting, stressful, and time-consuming. There are many factors to consider when looking at blueprints and specifications. Reducing the number of mistakes and errors in the Estimating process is vital to a successful estimate. Let's explore what makes a successful estimate and if electrical estimating software is right for you.

The Detailed Estimating Method

All businesses exist for one reason, to make money. It is up to the estimator to make sure they make a profit on every job for which they submit a bid. Providing excellent service and evaluating the degree of risk in each job is vital to the success of an electrical contracting business.

The best way to estimate a job is to be as detailed as possible. In Mike Holt's Illustrated Guide to Electrical Estimating, he details the following steps for estimating jobs:

Step 1: Understanding the Scope of the Bid

To understand the work to be completed, make a note of all the items in the drawings and specifications that affect the cost of the job. If the project to be estimated is a remodel, a site visit is mandatory. You need to walk the construction area and take copious notes regarding existing conditions.

Step 2: The Take-Off

A "take-off" determines how much of each material is needed to complete the job. To do this correctly, the estimator must mentally visualize the installation drawn out on the blueprints and count/measure the symbols. A systematic/repetitive system will help reduce errors and save time. Once you have a proven method, stay with it. Consistency is important.

Step 3: Determining the Bill-of-Material

Using the information obtained from your take-off, you will create the bill-of-material. This step can be very time-consuming and is prone to errors if done by hand. An electrical estimating software can complete this automatically for you to help keep mistakes to a minimum. You can also use the ill of materials to ferret out anomalies. Look for quantity numbers that don't look appropriate for the work.

Step 4: Pricing and Labor

After completing your bill-of-material list, you will need to send it to your suppliers for pricing. During this step, it is crucial for you to look up the labor units for each item to capture the amount of time it would take your crew to complete the installation. Most electrical estimating software will compile this list, saving you time. Reviewing the labor required for the project will also give you insight into crew size issues and timelines for various tasks.

Step 5: Extending and Totaling

Soon after receiving your bill of materials, your vendors will send you a pricing list. With this list, you can determine the total material cost and labor. It is crucial to limit errors in your calculations, and it can be done automatically with electrical estimating software.

Step 6: Estimate Summary

After determining the total cost for materials and labor hours, it is time to adjust the totals to reflect the job conditions. Add the price of miscellaneous material and small tools, sales tax, subcontractor expenses, direct job costs, man lifts, forklifts, and site storage.

Step 7: Overhead and Profit

Determining the correct values for overhead, profit, and other final costs is a step where many contractors fail. It is crucial to include these values, especially for projects that require more oversight than others. If you consistently bid with too much profit and overhead, your bids won't get accepted, leading to less work for your company. You will have plenty of work if you are consistently bidding with too low profit and overhead, but this work might lose your company money.

Step 8: Bid Analysis

When you complete your bid, double-check your work to ensure you didn't make any estimating errors. An excellent electrical estimating software can prove helpful by providing a complete recap of your project. A cost per square foot analysis or reviewing labor and material by task codes can provide valuable insight. Having this detail will help verify that your price is valid and accurate.

Step 9: Proposal

After verifying your price, it is time to submit a written proposal that explicitly states what your bid price does and does not include (inclusions, exclusions & qualifications). Providing price breakouts for certain undefined estimate items can add clarity. You want to reduce the availability of misunderstandings between you and your customer.

Proposal

Manual Estimating Errors Lead to Unsuccessful Electrical Contractors

As you can tell, there is plenty of room for mistakes in the estimating process. Too many mistakes lead many electrical contracting companies to go out of business. Even though manually estimating can work for small projects, this method can be very time-consuming, is prone to many errors, and is very inefficient for electrical contractors that regularly bid on jobs. Finding ways to increase the efficiency and accuracy of the estimating process is vital to the continued success of your business.

There is much pressure to complete an estimate quickly. However, working too fast can increase errors with the multitude of calculations and last-minute changes to the bid. Finding a way to complete an estimate efficiently and accurately will help save you and your company time.

Reducing the amount of time spent on each bid will help reduce the total overhead cost. For example, let's assume you send out two bids per week, and you win one job out of every two bids you submit (50%). Additionally, you spend an average of 6 hours at $30 per hour to complete each bid. To win one job, you would be paying $360 per week on the bidding process. Finding a way to reduce the amount of time spent on each bid would decrease the overhead cost per bid and save your company time and money.

Solution 1: Estimating Service

Some inexperienced electrical contractors decide to use Estimating Service agencies to reduce risk with unfamiliar job types. Using an agency also allows electrical contractors to avoid investing in their computer estimating programs. While this is an effective short-term option, the long-term benefits of learning to estimate appropriately will lead to a more integrated approach since you will be able to tailor the estimate to the specifics of your company that an agency might not know.

Solution 2: Electrical Estimating Software

Electrical Estimating Software is a computer-assisted method of estimating. It is similar to manual estimating, but a computer performs mathematical calculations and generates reports. Project management can also use the information produced to benefit. Electrical estimating software should be a consideration for all estimators and contractors looking to become more efficient and accurate in their estimating methods.

For example, electrical estimating software helps reduce errors with pricing material and the application of labor hours. After putting in the pricing received from your vendors, the software will automatically provide you with the totals and a summary report, effectively eliminating errors you might make when calculating totals and transposing information.

Recap Summary

Furthermore, electrical estimating software will help your bids become distinct, legible, and professional in appearance. The software will take care of the tedious and time-consuming process of manually structuring your totals, summaries, and proposals. Automating this process will help keep estimates from becoming backlogged. There will be less of a chance to make a mistake while rushing the estimating process with less pressure.

Electrical estimating software allows you to produce up to four times as many estimates in the same amount of time required to produce them manually. Using electrical estimating software will save you and your company time, money, and stress.