Bidding question's

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JJWalecka

Senior Member
Location
New England
I just recently started my own Electrical Contracting Business. I work mostly nights and weekends. I have heard some contractors bid by the square foot around $3.00 a square foot. Another method is bidding $40.00 a receptacle. That includes circuit breaker, receptacle, wire and labor. $100.00 a recessed can including circuit breaker, recessed can, wire and labor.
I was hopping to get some feed back from established contractors as to there bidding practices. I am new to bidding since all of my career has been Commercial applications for my employers.
I don't want to bid too high but I would like to make money. I have very low overhead since it is "Moonlighting".
Any information would be appreciated. Thank you for your time and effort.

Justin W.
 
Re: Bidding question's

This is not a personal attack but I have been meaning to start a thread about guys in your situation. Bottom line, you guys are killing us. Granted we all have to start somewhere, I know I did but what I see happening right now in my general area is a sort of influx of new "businesses". The main culprit is the slowdown in large commercial work which leads to layoffs in both merit and union shops. There seems to be alot of guys popping up working for short money bidding the "Real contractors" out of work. At the same time some of them are collecting unemployment so the side job money is gravy. It is killing alot of guys that have worked their businesses to get to a point of success. What it also does is devalue our worth. There might be five guys bidding a house and three are legit contractors coming in at twenty grand and two at 13K. Now in the eyes of the builders the 20K guys are overpriced and don't get the work. All those years of building a business gone to hell just like that.
 
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I have ran into some of what Scott is talking about. I have been seeing alot of "low ball" bids comming in latley. I bid a retail store remodel where 6 of us came in around 60k, one at 120k and then the low baller at 40k. I understand that a one man shop can not lose money on a job (he might only make 10 bucks an hour if he bid it wrong) but it is disheartning to see this kind of stuff. I guess we all have to start somewhere, it also dosn't help that there are alot of laid off guys doing side jobs (1200 on the book here). I have started to just not bid the small jobs and am sticking to the big ones, I know I have a bette shot at those.
 
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Well thats not much differant than our wages in Florida being cut because of south of border workers.Hurts when it happens to you.
 
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I have to totally agree with electricmanscott's statement. I too am losing jobs to the new guys bidding low and cutting my throat with pricing that I can't offer my customer with the overhead I incur running a legitimate business. I just lost a house where I was outbid by $8000...other guy hasn't any of the overhead I have :mad:

When bidding keep in mind that your hurting everyone of us by bidding low...

shorcircuit2
 
Re: Bidding question's

I agree, have respect for your trade and do not devalue the trade you've worked so hard for.
 
Re: Bidding question's

I'm in the same boat as you Justin

Well Maybe if everyone would get together and share what they charge, and everyone charge the same, or around the same for the same type of work, like we're professionals. Lawyers and accounts charge the same as each other, why not us, and why not share your knowledge instead of whining.
When I was working for a contractor pricing was this BIG SECRET and god forbid any of the pee-ons see what the boss was billing out. Well if no on is willing to share their knowledge on pricing to new guy then how in the &*() are we to get it right. I'm in business to make money, not just to work for myself and I'm certainly not doing it to low ball every bid.

[ April 03, 2005, 10:38 PM: Message edited by: ken987 ]
 
Re: Bidding question's

I noticed that no one has actually answered Justin's question.

I'm also a one-man shop, but I don't bid jobs based on dollars per item installed or dollars per square foot. I do residential remodeling work on mostly old (pre-WWII) houses, and every job is different. It would be too hard to have a standard fixed price since every job has different variables in terms of how difficult a given task might be. What I do is figure my material prices from the take-off, then come up with my best guess as to how much time the job will take, multiply that by an hourly rate, and come up with a final number. It's not exact by any means, but one GC I'm currently working for on a kitchen remodel / service upgrade told me my bid of just under $6000 for the job was within a couple hundred of another bid he got from an EC he's worked with before, so I know my numbers are in the right ballpark.

As for some of the other comments, I hardly think that being a one-man shop makes an EC less legitimate than a larger operation. Yes, my overhead is probably much lower than that of a larger shop, which makes it easier for me to compete on smaller jobs, but along with that lower overhead comes lower ability to take large jobs. I can handle jobs in a single-family dwelling, but I can't bid on a big commercial job because I'm just a one-man shop. If you think it's somehow unfair that you can't compete with me because of my lower overhead, the solution is simple: lower your own overhead. If your overhead is too high, it's not because of me.

I agree that it's not right that we should have to compete with illegal aliens, but that all depends on how strict the electrical laws are where you work. The federal government clearly is not serious about immigration enforcement when there are millions and millions of illegal aliens who have been living and working here for years. So it boils down to state/local law on electrical licensing, and whether such laws are enforced. Where I live, ECs and electricians need state licenses, and the rules are strict regarding unlicensed people doing electrical work.

Along these lines, it's also wrong, not to mention completely hypocritical, for union guys on the book to be doing side jobs. If they want to work independently, they should quit the union and go through all the hoops to become ECs.

There's no way ECs could all get together and agree on pricing. That would be illegal. Suppose every EC in a given area agreed with each other to only bill on an hourly basis, and the billing rate was $500. Do you think the consumer-protection authorities would stand for that?

Even though I'm just a one-man shop, I'm just as legitimate as any other EC who is operating legally. I have the proper licenses, insurance, bonding, etc., and I pull permits for my jobs as required by state law. I did not become an EC to low-ball my way into poverty.
 
Re: Bidding question's

Well thats not much differant than our wages in Florida being cut because of south of border workers.Hurts when it happens to you.
:roll: Different subject completely.
I noticed that no one has actually answered Justin's question.
You didn't either.
I hardly think that being a one-man shop makes an EC less legitimate than a larger operation
I don't think so either.(I am one) It's the weekend warriors, moonlighters and the "new" guys I am talking about.
Along these lines, it's also wrong, not to mention completely hypocritical, for union guys on the book to be doing side jobs. If they want to work independently, they should quit the union and go through all the hoops to become ECs.
Absolutely. Talk about having your cake and eating it too. :roll:
Well Maybe if everyone would get together and share what they charge, and everyone charge the same
It's not that easy. I suspect alot of you guys out there don't know what it costs to run your business. If you figured that out most would be pretty close to the same rates anyway.
 
Re: Bidding question's

I have tried to start this thread before (IE: Business 101 and commercial contractor).
I agree with Scott that this is a large problem in our industry and the best way to cure it is through education.
In your particular work area speak to other EC's and find out what their rate is.
Stay competitive and carry all insurances and licences required for your state or county.
Either you are an EC or not.
You cannot be one moonlighting or part timing.
Set your rates and above all respect other EC contractors.
Bill
 
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I've had this problem with a guy that I used to work with lately. I keep having to pull his knives out of my back. We worked together for different companies before we went into business. I spoke to him a few years ago when I first went in business (he went in business before me) and he told me to give a price and if someone told him that someone else could do it for so much tell them that they need to have that person do the job than. I was told by someone recently that I had priced a gutted house for, that someone was higher than me but said they would match my price. The homeowner wanted me to cut my price by $400 basically. After a little prodding, the HO showed me the guys Bid and it was him! I had passed on bidding to someone else (a commercial establishment) because I heard that he was doing work for them. This morning I was to pick up a deposit check on a tenant job in a strip center that I had a signed ok'd proposal for, and the owner desides he wants to hack most of the work out of the job and basically just put in enough lights to get U&O and tells me after I update my price that he will get back to me tomorrow. He wants the job done starting Wends. I noticed this other same contractors van at the other end of the strip center and I went down and talked to him and found out he did the house (said the guy eliminated some of the stuff in the house, funny the guy didn't offer me to update my bid and my original bid was less than his) and he told me I was awful late starting on the other store (just met the store owner last Wends. and was never asked for a bid till than). I asked him how he does his pricing and he pointed to his head and said it was all up there. I started talking about doing prices based on estimating programs and he reinterated some of the stuff I said, but said that you need to call you labor rate the same as service labor rate and stuff along those lines. Sorry for the rant. how to bid this stuff is right in estimating software. Hanging a 2x4 layin is worth and hour, a recp. or switch is an hour, cable is so much cable in an hour, pipe is so much in an hour, depends on size of pipe, so much wire in an hour, this stuff is based on industry historical averages. you add up your total hours and find out how much an average electrician makes in your area add labor costs such as labor taxes& benefits(usually ballpark 27% of wage), multiply then together, that is labor, Basic material cost scale off how much pipe, wire, boxes, fittings, send fixture amounts to supply house and get quote, same for service equipment, add taxes to all materials if you are in MD or other places it applies, add material and labor together, add overhead (approx 10%) add profit, give quote and hope for the best. I know houses are different, I just use a flat per outlet price. You need to find out how much people are charging in your area now per outlet. A recessed, a surface light, tele outlet, S3, S4, outside flood are all worth different amounts.

[ April 04, 2005, 11:47 AM: Message edited by: bradleyelectric ]
 
Re: Bidding question's

Same thing in my area here in Wis. A lot of "no name" trucks are popping up with so called ECs. They are not legit since they are working part time and on weekends. They have NO overhead. The truck is the family vehicle. Insurance is paid by their 40hr employer. All they have is a license to do the work. Funny thing is, their "work" catches up. I have had several homeowners call for "repairs" after these "ECs" did their "jobs."
 
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We have "HANDYMAN" ads all over the local papers around here advertising electrical work. Some of these guys operate out of old stationwagons with ladders hanging out the back. We have one that calls himself "goodenuf repairs", this guy does it all. I was just talking to a hvac guy the other day and a landscape/ septic excavator contractor and they're all complaining about the same thing. Unlicensed, uninsured no-nothings undercutting real contractors. I hate to wish ill to others but getting sued by a homeowner and not having any insurance or license will wake these fools up when they lose everything, or worse yet, end up in jail when something they do ends up taking a life. These guys are everywhere around here.
 
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Well it's very apparent that everyone here was NEVER new to the trade or contracting and magicaly had tons of money to buy big fancy trucks and have them elaborately lettered. Well I don't I'll be using my 88 chevy which I'll register commercial and letter according to state law and then after I have some money I'll by a better vechicle. I do this PART TIME as I have a family to take care of and quitting and just jumping in head first is not something I'll be doing. But like I said before I guess everyone writing here seems they were never new and had all the money in the world to work with.
 
Re: Bidding question's

Electricmanscott,

All I wanted was some feedback from established contractors about there bidding practices. I enjoy asking questions and learning from this Forum. I'm am not trying to low ball anyone. The reason I was asking was to make sure that my prices were in the "ballpark" so I wouldn't be stepping on toes. I am trying to provide for my family, just like everyone. I have the proper insurance. I'm preparing to take my Masters exam. I'm trying to start my Contracting business legit. As far as immigrants go, I think we should send them all back where they came from. More and more work is going over seas. I'm proud to be an American. Part of the American Dream is to establish yourself. I agree that there are workers out there working for $15.00-$20.00 an hour and just throwing up hack installations. I take great pride in my work. I try to do 100 percent everyday. I have a fifty to sixty hour a week job working for my employer on Commercial projects. The only time I have available is nights and weekends. I feel with all the hackers in the feild I have a lot to give with my Safe and Quality work. I am going to make it. It will take a lot of hard work and dedication but it will happen.

Justin W.
 
Re: Bidding question's

OK you have me confused :confused:
Your profile says your a journeyman and your telling us your taking the masters.
Can you pull permits with just your journeymans card ?Most states you cant.
As to bidding that takes years to learn to do it right.A lot depends on what others charge as to what you can get.I would never bid by square foot.Charge per item,single pole switch = $,receptacle on branch =$,200 amp service back up =$ and so on.
Otherwise you will win bids on 2,000 sq ft homes that have 100 cans and mis the house that has bare bones electric.
I learned from my partner so i had a break.
Figure out how many hours you will need and the material and overhead,permits,that should get you close and after you do it a while you will fine tune it
 
Re: Bidding question's

Jimwalker,

Thanks for the feed back. It is my understanding that Massachusetts is or already has stipulations about only Master Electricians pulling permits. It is also my understanding that some would be "Grandfathered" ,as Journeyman, for a certain period of time. I'm preparing for it regardless. Thank you once again.

Justin W.
 
Re: Bidding question's

I will tell you how I started estimating. First I bought Mike Holts estimating class with the video. I watched that and learned alot from it, then I read through his book. That there got me going along the path to estimating. I started reading some of the free magazines that are out there, each month there is usually an article on estimating. Here are the couple that I got (they are all free)
ECM
EC&M

Next step was to find an estimating program, this is not necessary but it makes things alot easier. I went to all the web sites and looked at all the programs, alot of them have a trial program so you can get a feel for them. I ended up with Vision's bid manager plus. I am happy with it, it has a few areas that I was not happy with but I fixed most of it.

There are some estimating classes you can take locally, check community colleges and other places. There are a couple here in Michigan that are taught by inspectors. I also found a man that teaches a class over the Internet, I didn't go with him but his class sounded really good. When you start looking at programs, ask the salesman if they know of any class on estimating, that is how I found the few that I did.

After you do all of this you do your first bid. It is very scary and you will lose sleep (I did) You will start to learn alot fast, the labor hours that came with my program are pretty good so I got lucky. After awhile you will find yourself bidding 250k+ jobs without even thinking twice.

Now all of this is just my opinion and my experience. I put alot of effort into learning this, asked alot of questions, and have years of experience being a GF so I knew alot of what goes on behind the scenes. Use this forum to ask questions, and there are a few others out there that are pretty good. Good Luck!
 
Re: Bidding question's

Companies with all the right stuff should never be competing with the companies with one truck and working out of their house.
There are simply different markets we target.
Large overhead usually leads to a market share of about 38%. The other 62% is there for the remainder of the equally qualified companies with lower overhead and just as much profit.

I do not understand why some of you are saying that the smaller companies are cutting down the industry when it appears that they are the smart ones to keep the overhead down, while enjoying the same 10% profit that the larger companies are making.

I think the real problem is that most big companies do not want their best techs going into business for themselves.
 
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