Estimating for customers, revisited

[ivsenroute]

I spent quite a bit of time searching this forum for this subject but still did not see everything that I am looking for, hence m post.

Now that I am back to doing electrical work I am trying to figure out a good way to bid jobs. I have looked at the ?sliding scale? for materials when you do T&M but I am looking at bidding jobs or giving prices to potential customers.

Here is an example of what I do. I want to know if anyone else uses a similar method.

First, I get together a material list then mark it up as I see fit depending on what it is. I have no particular ?percentage?.

Next I estimate how much time the job will take me. This is a one man operation but occasionally I get my step-son to help me (he does very neat, great work)

I always overestimate time and also add time needed for picking up materials.

Here is an example, my personal hourly rate will vary higher or lower.

Customer wants a 20 amp circuit with 3 GFCI protected outlets in the basement. The 3 outlets will be mounted on the concrete foundation with ?? PVC.
(yes, this is a small job example but I did not want to explain all work)

Materials= $60. (conduit, boxes, gfci, receptacles, CBr, wire, etc.)
Labor will take me about 2.5 hours but I charge a minimum of 4 hours.

I charge $100. for materials and $275. for labor, for a total of $375. which I think is low for the job. Keep in mind, this is part of a bigger job (an extra).

If I estimate a job may take me 40 hours I actually hope to finish it in 30-32 hours. I always overestimate my time just incase things happen to delay which they always seem to do.

Thoughts?

 

[ivsenroute]

To add to this.

Services are not figured this way since we can make much better money for this type of work.

Commercial work is at a higher hourly rate.

Residential hourly rates vary depending on what county I am in since some counties have higher prices than others.

Since I dont get all of the bids I put out I can only assume that I am not too low.

 

[bradleyelectric]

Since I dont get all of the bids I put out I can only assume that I am not too low.

Someone that gets some of the jobs that you don't may be selling on value other than price. Just remember that when you sell on lowest price there is always someone dumb enough to sell for cheaper.

 

[Sparky555]

I used to figure prices similarly. As I understand a price breakdown more I use the following:

Materials at cost
Sales Tax
Material Markup
Direct Cost of Labor with Vehicle Cost per Billable Hour
Overhead per Billable Hour
Profit

I used to overestimate & round up, but now I understand a little more about the nature of business finances. In the end making money is good & losing money is bad. It helps me to know exactly at what dollar I'm making or losing money.

Dave

 

[celtic]

Next I estimate how much time the job will take me.

How is this performed?

Does it include time for:
travel while picking up supplies;
travel to job site;
permits and inspections;
bookkeeping & recordkeeping
etc?

Labor will take me about 2.5 hours but I charge a minimum of 4 hours.

How did you arrive at 2.5 hrs?

I ran some quick numbers....assuming:
40 ft run of 3/4" PVC, w/3 duplex devices in plastic boxes, on a GFI CB.
My numbers are at:
Time = 4.5 hrs (Job labor ONLY *)
Material = 119.96 (NO Tax or markup added)


[*Pay NO attention to the labor cost of $136.88...I used the default rate and not an actual rate] )

 

[ivsenroute]

So after looking at yours with your default rate, I think I did OK.

Materials did only cost me no more than $60. so for a half days work I am comfortable with that.

The only thing missing is a profit markup.

This rate will vary according to what part of the country you live in.

 

[celtic]

So after looking at yours with your default rate, I think I did OK.

Not exactly...

How did you arrive at 2.5 hrs?

I ran some quick numbers....assuming:
40 ft run of 3/4" PVC, w/3 duplex devices in plastic boxes, on a GFI CB.
My numbers are at:
Time = 4.5 hrs (Job labor ONLY *)
Material = 119.96 (NO Tax or markup added)


[*Pay NO attention to the labor cost of $136.88...I used the default rate and not an actual rate] )

I arrived at 4.5 man hours - the rate is entirely irrelevant. In the program used, the rate is ridiculously low at about $30/hr.

Materials did only cost me no more than $60

Let's compare apples to apples here....how much PVC was required?

This question still remains:
How did you arrive at 2.5 hrs?

 

[ivsenroute]

1 10' length of 3/4" conduit yielded 3 40" pieces which is all that I needed to stub down the concrete wall.
Straps are cheap.
I used metal boxes with metal covers.
12/2 wire approximately 60'.
1 GFCI and 2 duplex receptacles. (line load setup)
1 20amp Homeline CB (less than $4.)

I charged $100 for materials when I did the estimate (client does not know material costs because my bid was 1 price)

I think my labor charge could have been more. The job only took me about 2.5 hours but I charged 4 for my estimate.

What would your actual charge have been?

 

[celtic]

1 20amp Homeline CB (less than $4.)

???
For a HOM120GFI

[EDIT: I thought we talking about GFI CB... -$20 for difference from CB to device]

What would your actual charge have been?

My actual charge would have been closer to $500....but I'm in NJ and everything costs more here [adding also for the mandatory parking ticket ]

 

[ivsenroute]

Yeah, everything is more expensive in NJ. No, I opted for the $9.07 GFCI rather than a GFCI CB.

 

[celtic]

Yeah, everything is more expensive in NJ. No, I opted for the $9.07 GFCI rather than a GFCI CB.

LOL
I just happened to put a CB in the numbers rather a device ~ oops.

 

[Mule]

A couple of comments from another relatively new contractor...

1) If you live in a smaller town be carefull about changing your hourly rate around. Customers talk....
Suggest altering your billable hrs instead of rate to achive same goals

2) In my town, or I guess any town there is only so many other EC's that Im competing with, and only so much work to go around. So I price the job according to how much I want that job at let things fall where it may.
Here's my theory....If I loose a yucky job to a competitor because I purposely overpriced it, I migrate toward the better jobs. Then If my competitor is busy doing all the jobs I didnt want, I clean up ALL the service calls, or better jobs because he's tied up....:smile: So right now I'm pricing commercial cheaper than resi, because I want to migrate in that direction. I'm 50 and I dont like crawling around these ratty ole houses.