Estimating

Status
Not open for further replies.
Why do members in this forum ask other members what they should charge to do a job? I can understand asking a question like "How long does it take you to do this"? That's more of a mechanical question whereas someone might not be familial with a certain installation.

An electrical contractor, or anyone trying to be one, needs to find out the following factors on their own:

1) What material am I going to need and what will it cost ME?
2) What am I going to have to pay for manpower? What is MY man hour cost?
3) What is MY burden?
4) What is MY overhead?
5) What does it cost ME to do business?
5) What are MY indirect costs?
6) What profit percentage do I need to make?

Look at all of the "I"s, "Me"'s and "My"'s. I don't see a lot of "You" or "Yours" in there.

All of these questions need to be answered by the person who is trying to come up with a price. Not everyone will come up with the same answers.

Rather than asking someone else "How much should I charge?" ask them "How do I determine how much I should charge". Don't let someone you don't know be in charge of your pricing. Learn how to price jobs based on YOUR actual costs and I can promise you a long and prosperous future in this industry.

There are a lot of members asking the question of "How much should I charge". If I am looking at this wrong, please set me straight.
 

celtic

Senior Member
Location
NJ
IllinoisContractor said:
I can promise you a long and prosperous future
liveLong-420-1_tn.png


You might want to think about changing your avatar there, Spock :D
(Sorry, I just got that mental image when I read that line...had to get it off my chest)


IllinoisContractor said:
Rather than asking someone else "How much should I charge?" ask them "How do I determine how much I should charge". Don't let someone you don't know be in charge of your pricing. Learn how to price jobs based on YOUR actual costs and I can promise you a long and prosperous future in this industry.

There are a lot of members asking the question of "How much should I charge". If I am looking at this wrong, please set me straight.
A lot of guys - myself included - ask "How much $ for x task?"
I never gave your question (How do I determine how much I should charge) much thought previously.

After discovering: [Business Owner's Cost Calculator]
(Link is 404 as of this writing)
...a year or two ago, my thinking changed radically.

BUT...

I still like to play the "How much should I charge" / Just for fun...(bid) game. Although I haven't had to play on the "home field" lately and all "away games" seem to have been canceled.

My "Just for Fun...(Bid)" posts were actually pretty good ~ not MY posts/replies, but rather the input from the forum as a collective....
Borg-Intro.jpg
 

ceb

Senior Member
Location
raeford,nc
You are correct in the I,ME,MY case but their are alot of folks that have not grasp the FULL pricing game. My self included. They, IMO are just looking for feed back from others. Those that give a $ amount for a job or item, most of the time let that person know that location and market will be different from one place to the other and they should not use their pricing. On this forum it has been made clear by many that they would not use sq. ft. pricing on new construction, but I do. I have kept records of what I have done,I know what my help can do and I know real close what material it will take to do it code min. but I also know what to charge per item for all add on's. I make $$. This forum is a great place to learn not only about contracting but almost any thing to do with electrical,but learning takes time, a long time, I know because I am still doing it.
 

satcom

Senior Member
IllinoisContractor said:
Why do members in this forum ask other members what they should charge to do a job? I can understand asking a question like "How long does it take you to do this"? That's more of a mechanical question whereas someone might not be familial with a certain installation.

An electrical contractor, or anyone trying to be one, needs to find out the following factors on their own:

1) What material am I going to need and what will it cost ME?
2) What am I going to have to pay for manpower? What is MY man hour cost?
3) What is MY burden?
4) What is MY overhead?
5) What does it cost ME to do business?
5) What are MY indirect costs?
6) What profit percentage do I need to make?

Look at all of the "I"s, "Me"'s and "My"'s. I don't see a lot of "You" or "Yours" in there.

All of these questions need to be answered by the person who is trying to come up with a price. Not everyone will come up with the same answers.

Rather than asking someone else "How much should I charge?" ask them "How do I determine how much I should charge". Don't let someone you don't know be in charge of your pricing. Learn how to price jobs based on YOUR actual costs and I can promise you a long and prosperous future in this industry.

There are a lot of members asking the question of "How much should I charge". If I am looking at this wrong, please set me straight.

I would like to frame this and save it for every question on "HOW MUCH SHOULD I CHARGE"
 

electricmanscott

Senior Member
Location
Boston, MA
IllinoisContractor said:
There are a lot of members asking the question of "How much should I charge". If I am looking at this wrong, please set me straight.

I think you are looking at this somewhat wrong. All of your points are valid. However I believe knowing what others are charging is just as imporatant as knowing what you should charge.

Knowing your own costs does not guarantee success. If your costs are higher than everybody else than your pricing will follow suit. This gives you a disadvantage.

Checking on other contractors pricing is essential to find out what the market conditions are. If you are not somewhat in line this is how you will find out and you may be able to adjust your costs to some degree if your pricing is high or increase your profit if you pricing is low.
 
Celtic: It sounds like you agree that it is important to be able to determine your own costs. May the force be with you.

Feedback on your pricing is important. It doesn't change your actual costs but it does allow you to see if your costs and/or profits are too high. If you are estimating jobs by determining your costs and then adding overhead / profit and your pricing is higher than your competition, then you need to find out why your costs are higher.

Material: Shop around. Make sure you're getting the best material prices.

Labor: Labor is your biggest cost. There are many ways to reduce your labor costs:
*Labor rates are generally constant in a geographical area so look at using apprentices if possible.
*Look at your layouts - How can you do it faster?
*Look at your installation techniques - Utilize cordless drills for reaming, setting screws, splicing, rings, trimming, etc.
*I'm not going to say anything about your manpower's speed or abilities. When you estimate a job and determine how many hours the job will take, you have to meet or beat that labor budget. If you can't then you need to either revise your labor units or revise your crew.

Indirect labor: You can't eliminate indirect labor but you can try to reduce it. Keep it as efficient as possible.

Burden: Keep on top of your burden costs. Keep your insurance agents on their toes.

Overhead: A lot of money can be spent on unnecessary overhead. Keep your business running lean and efficient.

Profits: After you have tightened up all of your costs then you need to adjust your profit to be competitive.

The above items are just a small sampling of what it takes to be competitive and still make money. It all comes down to knowing and managing your costs. It's not that difficult. You just need a quality estimating program that allows you to identify and enter all of your costs for estimating a job. It's a tool to be used just like any other tool that you use on the job.

Controlling your costs comes down to one statement: If you can identify it, you can manage it. If you don't identify your costs how can you manage them?

A good estimating program will allow you to see what your actual costs are. It will tell you how many hours you need to complete the job in. This is a labor business we're in. The most important thing we need to do is to determine how many hours a job should take and then make sure that it gets done in those hours. Determine your labor budget and then hit it.

I use an estimating program that does all of these things, as well as generate my proposals, and I can't image what I would do without it. You can find it here.
 
Last edited:

satcom

Senior Member
electricmanscott said:
I think you are looking at this somewhat wrong. All of your points are valid. However I believe knowing what others are charging is just as imporatant as knowing what you should charge.

Knowing your own costs does not guarantee success. If your costs are higher than everybody else than your pricing will follow suit. This gives you a disadvantage.

Checking on other contractors pricing is essential to find out what the market conditions are. If you are not somewhat in line this is how you will find out and you may be able to adjust your costs to some degree if your pricing is high or increase your profit if you pricing is low.

I don't think you will get any argument about looking at market conditions, something you need to stay on top of.

You may want to be careful of who you are looking at, when looking at the others, pay rates may be way out of line, the other guy may pay below market wages, have min. insurance coverages, his trucks and equipment may be from another age, is he in debt, and trying to buy his way out. Or are you trying to price against an underground operator. You will need to know a lot more about his business, then just he's another EC, before you compare pricing.

The disadvantage, is only there if you just present a bid, and make no attempt to sell the customer, electricians are good at what they do, and selling is not usually something they either like or want to do, that is the real disadvantage.
 
Last edited:

celtic

Senior Member
Location
NJ
IllinoisContractor said:
Celtic: It sounds like you agree that it is important to be able to determine your own costs. May the force be with you.
May the scharwtz be with you.
spaceballs.jpg


IllinoisContractor said:
I use an estimating program that does all of these things, as well as generate my proposals, and I can't image what I would do without it. You can find it here.

I use a program that creates invoices, estimates, etc...integrates with Quickbooks...costs about $750 less than TurboBid...
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
One of the things that will make you ill once you realize it, is that there is an extremely wide variation in pricing from one supplier to another, between virtually identical products from different manufacturers, and even from the same supplier to different buyers.

It has gotten so convoluted that there may be a dozen different prices the same supplier might charge to different buyers for the same item.

If you buy any significant amount of product, you have some leverage with your supply house. You should use it. The counter guys are not your friend in this endeavor. They have no control over prices. Meet and talk with your outside salesman on a regular basis. Make sure he knows you are price sensitive. They are extremely good at pretending you kicked them in a sensitive place by asking for better pricing, but it is just a salesman trick. Many products have a LOT of latitude for better pricing. Some things do not. You need to learn the difference. If you can buy something at Big Orange for $10 and your supply house wants $20 for it, that is money out of your pocket. In most cases, you can cut a deal with the outside salesman for better pricing if you work at it, and you do enough business to make it worth his while.

Supply houses work very hard at getting you used to the idea of buying from the friendly counterman. They even have coffee and donuts to encourage you not to think about the prices you are paying. Think about it this way - is it worth paying double for something to get a free cup of coffee and a friendly chat?
 
Last edited:

celtic

Senior Member
Location
NJ
IllinoisContractor said:
Then it would be free. The guy at TurboBid told me that they always offer a 50% discount.
At $33 it might as well be free ;)
I also have the HD Worksite CD which was FREE :)
hdwscdjz6.jpg
...prices can be updated for FREE daily AND also by geographic location.
I'm still trying to find someplace that can host the 500MB file for free.

The TurboBid website states:
[FONT=Arial,Helvetica,sans-serif][FONT=Arial,Helvetica,sans-serif][FONT=Arial,Helvetica,sans-serif]*[/FONT]Introductory Special - Purchase the TurboBid Residential Electrical Estimating Software Program for only $795[/FONT][/FONT]
[FONT=Arial,Helvetica,sans-serif][FONT=Arial,Helvetica,sans-serif]
[/FONT]
[/FONT]http://www.turbobid.net/id89.html

"The guy" at TurboBid ought to have their website revamped...$800 vs $400 is ..well ....a 50% difference LOL.
 
Celtic: Do you think you could say something about my material supplier's prices? Or better yet, how about my corner liquor store. Their prices are way too high.
 

jaylectricity

Senior Member
Location
Massachusetts
Occupation
licensed journeyman electrician
I know I'm a little late on this one.
Illinois, I'll agree with part of your statements. It IS hard to quote prices to each other over the internet.
I will also agree with some others who choose to discuss the monetary value of the tasks at hand.
The thing to remember is that you will be getting answers from people from all around the country.

So my real answer is:
No. You shouldn't post a question on this bulletin to figure out what your exact estimation is. ----------- BUT...
You SHOULD feel free to post a question to get answers from your fellow tradesmen and read ALL of the answers. Just make sure you pay attention to the fact that everyone lives in different areas and you should find some way to average out your answers. That way you can get a sense of the price you are looking for.


Of course their may be some propogandists that don't have your interests in mind, but you will have to learn how to identify them as well. If YOU'RE (I don't mean you Ill, I'm just generalizing) one of those propogandists, I know there isn't much we can do about it, but you should really learn to share the truth so we can all be better at what we do.
 
You're absolutly right Jaylectricity.

It's all about learning how to do things for yourself. Remember the parable: Give a man a fish......... Teach him how to fish...........

There is absolutly nothing wrong in validating a price as long as you try to come up with your own price first. If your price seems out of whack, try to find out where your estimating has a flaw and then adjust it. Those of us that use a cost basis for estimating will forever be making minor adjustments.

Remember: If you can measure it, you can manage it.
 

celtic

Senior Member
Location
NJ
IllinoisContractor said:
Celtic: Do you think you could say something about my material supplier's prices? Or better yet, how about my corner liquor store. Their prices are way too high.
How about a 2-for-1 sale?
Goto your material suppier and load up on wood, cinder blocks, bags of morter, etc....then goto the liquor store and bring it all inside....goto work sealing the building from the INSIDE. :grin:
 

jaylectricity

Senior Member
Location
Massachusetts
Occupation
licensed journeyman electrician
celtic said:
How about a 2-for-1 sale?
Goto your material suppier and load up on wood, cinder blocks, bags of morter, etc....then goto the liquor store and bring it all inside....goto work sealing the building from the INSIDE. :grin:

Come on, now you're just being ridiculous. You need to bring some food with you.
 

celtic

Senior Member
Location
NJ
jaylectricity said:
Come on, now you're just being ridiculous. You need to bring some food with you.

I overheard two guys heading off to the bar one day for lunch...

Guy#1: Let's goto the bar
Guy #2: Ok, but lemme grab a sandwich on the way
Guy #1: There's a sammich in every can

:D
 
Status
Not open for further replies.
Top