Electrical Estimating Apprenticeship – Profit is not a dirty word! (Day 2)

Day 2 of the electrical estimating apprenticeship focused on three things. First, profit is not a dirty word! Second, relationships are important, and finally always ask for a full set of drawings!

Profit doesn’t happen by accident!

In terms of profit, it really is the goal of any “for profit” business. Profit doesn’t happen by accident though. A good estimate will ensure that all costs are covered. Effective project management will assure a profit is made when the job is finished. There are several variables that will determine if a profit is made; material costs and labor costs. Material costs include commodity material costs and quoted (packaged) material cost. Your estimate should include material pricing that is within 3 to 5% of your “buy” price.

Vendor relations are important for quoted (packaged) items!

How to ensure that you get the “right” price for your lighting, switchgear or fire alarm package on bid day? That’s right….relationships. It is imperative that when you send your counts and specs over to your vendor that you include the right bill of material. It’s no secret that the “first counts in” are the ones that the vendors quote, but that isn’t to say that you should sacrifice accuracy for speed in getting the counts out. How do you get that “whisper number” on bid day? Cultivate relationships with your suppliers and be sure to “spread the work around” among the vendors you use.

Labor is the most variable part of a project’s costs.

Labor efficiency relies on the human factor, making labor one of the most variable project costs. An average person works 40 hours per week, during daylight hours. Any variance to the “average” can and will result in labor inefficiencies. When you bid your project, be sure to account for things that can effect labor performance. Labor can be effected by labor schedule, weather, building height, project size and so much more.

It is the project manager’s responsibility, along with the help of the job superintendent and foreman, to ensure the labor goals are met. Generally, when you are 90% complete with a project, you should have approximately 20 to 25% of your labor hours left to complete the project. I know that sounds like a lot, but the electricians are generally the last craftsmen off the project, and a lot of work is required once other trades complete their work.

Relationships, Relationships, Relationships!

Never underestimate the power of a good relationship with the general contractors you work with (or want to work with) and your vendors. Cultivating relationships is important. It is certainly much easier to conduct business with someone with whom you have a good relationship, and it may open doors to private projects that never “hit the street” so to speak. How do you build relationships? A good way is to join business networking groups, or even civic groups such as the Rotary Club or social clubs such as the Elks. It will vary from place to place.

Have you ever noticed how happy people are when you bring them something that they don’t expect? A box of donuts may not get you a job right away, but it may help you get in the door of a contractor that won’t take your phone call. Sometimes the little things make a big difference. Be creative!

Access to a full set of drawings is critical in the estimating process.

At the risk of this blog getting too long winded, I have to mention that when you start a project, make sure you have a full set of plans. Although you will be bidding on primarily the electrical drawings, you typically are responsible for anything shown on any of the drawings. For example, some projects will have electrical, lighting design, and interior design drawings, all showing lighting fixtures. These drawings may not be coordinated so you may have to count off three different drawings for the same area!

Read the drawing index.

A quick review of the drawing index will be the roadmap to the drawings you should really review. Yes, you are responsible for anything electrical that is shown on the drawing, regardless of whether it is shown on an architectural or mechanical drawing. Make it a habit to review all the drawings, using the index as your guide. Remember, it is the estimator’s role to determine the true cost of a project. Sometimes it’s a puzzle and you never know where you’ll find the missing piece.

Stay tuned for this week’s thoughts on the electrical estimating apprenticeship!