Burden

[teco]

Hello,

Okay, Please bear with me, I've ask about these estimating systems before and still do not get this. I'm looking at estimating software packages and still have one main question none of the companies can answer to my satisfaction. Over the years I've learned I've needed to charge a certain labor rate per hour to cover my cost of employees, employee overhead, and so on. I do not want to start lots of comments on how one arrives at that number. Everyone has there own ideas and ways to arrive at the rate they need to charge. For me, experience has been my greatest teacher. What I want to ask is that in the end of a bid job, when I break it down, I know my business needs to get in the $75.00 to $80.00 per man hour range for me to make the profit my company needs on the labor portion when I do a manual bid. This also depends on the type of job for me and what type of electrician I need to send. All the estimating software systems examples that have been shown to me use a low labor rate per man hour. Something like 25 to 35 dollars per man hour rate. Then they have the burden percent they add to that, something around 10 dollars added to the man hour rate, or 30 percent rather than a dollar amount. This doesn't come close to covering what I need after paying a top man on an industrial job.
How the heck does anyone make money on that! I don't get it. The labor unit amounts must be doubled than what it takes to complete the task in these systems. Ive ask this and I'm told no all the time. Does anyone get this? Has anyone answered this for you? Please, any info will help. Thanks.

 

[jbelectric777]

When I was a contractor I tried all the high priced estimating software and the bottom line is 1) You are a very large contractor or 2) A very small contractor. That said, you have to make money or why do it at all. I ended up doing a lot of the work myself and staying small, I have worked for union shops that made as little as 4% on a $60,000.00 job (it was an old country buffet) Basically, the men working on the job made more, BUT they had millions of dollars worth of work so 4% of a few million isnt bad. If you want a darn close profit/loss estimate then figure all your material without a markup, then estimate the hours times what your paying per hour, get your costs down to the last wirenut, then add what you want your company to make after giving yourself a paycheck based on the length of the job, a percentage of insurance, wear and tear on the vehicles etc.... it worked for me, I never lost money even if I was stiffed here and there because I worked some of those bid hours.