How to Estimate Electrical Work Accurately: Step-by-Step Guide

1. Bid on the right electrical jobs

The first and most important part of running a successful electrical business is bidding on the jobs you know you can deliver.

It’s crucial to be aware of your skills and understand what types of jobs are right for you—including jobs you’ve done before—and which ones might be too much to handle.

Whether you’re new to the electrical industry, or a seasoned veteran, there are always types of work that fit service providers more than others. Having prior experience with these types of jobs will help you provide a more accurate estimate, and complete the electrical work successfully.

2. Review electrical job specifications 

If you’re bidding on commercial or construction electrical jobs, you’ll often receive a request for proposal (RFP) that details the specifications of the job.

Review this document carefully to make sure your electrical pricing accurately reflects the specific requirements in the RFP. If anything is unclear, ask questions to get clarification before continuing on to the next step.

3. Analyze drawings

Carefully analyze any pictures, architectural and construction drawings, or blueprints provided to understand the electrical requirements for the job.

Look for anything that may increase the project’s difficulty or affect the materials or equipment you’ll need to get the job done.

You’ll want to pay close attention to a building’s:

• Plumbing 
• HVAC 
• Elevations

If the electrical service is for a house and the homeowner can’t provide the blueprints or drawings, request a walk-through to get a full picture of the project’s requirements.

4. Perform a material takeoff

An electrical or material takeoff is a comprehensive list of the inventory you’ll need for the job.

To perform an electrical takeoff, work off the existing blueprints to create a list of all the materials and quantities needed for the specific project.

Depending on the project, your material takeoff sheet will include:

• Light fixtures
• Conduit
• Electrical wiring
• Switches
• Switchboards
• Circuit breakers
• Emergency or backup systems
• Electrical outlets and switches
• Energy efficiency upgrades

Then use this list to calculate prices for each material and your total materials and electrical costs. 

Keep this document handy, as you’ll include the required materials and pricing in your estimate.

5. Calculate your labor costs

Now that you fully understand the requirements of the job, you can figure out how many electricians you’ll need and how long the job will take to complete.

Use this formula to calculate your labor cost:

Total labor cost = Hourly labor rate x number of labor hours

Electricians who work on residential or commercial electrical jobs typically charge per hour. If you’re bidding on a new construction project, you may choose to charge a flat fee upfront.

However you decide to charge, make sure you include a little extra time in case your electrical contractor runs into complications on the job.

6. Add in your overhead costs

Your overhead costs are the operational expenses you pay to keep your business running smoothly, like:

• Business equipment (like tablets, computers, or cell phones)
• Work vehicles, fuel, and maintenance
• Office rent
• Electrical advertising and marketing
• Electrical business management software
• Taxes and business insurance
• Electrical tools (like voltage testers, wire cutters, and screwdrivers)

To figure out your hourly overhead rate, use this formula:

Total monthly overhead costs ÷ Number of billable hours per month

For example, if your overhead costs for the month are $4,000 and your business produces 500 billable hours every month, your overhead costs would be $8.00 per hour. 

To calculate your overhead costs for an electrical job, use the following formula:

Hourly overhead costs x Number of hours the job will take to complete

READ MORE:A guide to pricing strategies for service businesses

7. Decide your profit margin and add a markup 

Your profit margin is how much money you make once you’ve covered all the costs for a job—like materials and labor.

Your markup is the amount you take home after applying your profit margin.

If your ideal profit margin is 15%, use this formula to determine your markup:

(Hourly rate + material cost + overhead costs) x 0.15 = your markup

Then add your markup to the cost estimate to get the total price for the electrical work.

You can also use Jobber’s electrical estimating calculator to calculate the total cost for your electrical job.

FREE TOOL: Try our free profit margin calculator

8. Create your electrical estimate

Here’s an example of an electrical estimate you can send to your client: