# Fundamental Review : A brief beginner’s guide to electrical estimating

By | Dec 15, 2021

I have been writing this column for quite a while now, and recently realized I have never talked about the basics of electrical estimating. So, let’s get to it.

### Unit pricing

There are several ways to prepare an electrical estimate. Most of the smaller contractors I have spoken to use some form of unit pricing. While these methods work well for residential and small commercial estimates, they fall short when applied to larger commercial and industrial projects. This article will concentrate on methods I learned from beginner and advanced classes I have taken. The knowledge gained has served me well.

The unit pricing method consists of gathering all the costs for an electrical installation into a single number. For example, you may charge \$150 for a duplex receptacle. That price includes the material, labor and enough markup to cover all the other costs and profit. This method— good for residential— starts getting risky when applied to commercial bids and should never be applied to industrial work. The risks of using unit prices comes from the subjective areas of electrical estimating. For instance, the average length of a branch conduit can vary a lot between projects, which causes an inaccurate unit price. Keeping up with material prices can also be difficult, especially during times of hyperinflation for electrical materials.

### Line-item estimating

Another method is line-item estimating, which uses the pricing sheet, as pictured above. Each row on this sheet will be filled in with the information for one electrical component, with columns for description, material price, discount and labor unit. The totals will need to be calculated for the material and labor extensions. Then, each extension column will be totaled at the bottom of the price sheet.

After you have finished the price sheets, it is time to complete a recapitulation. This form adds the finishing touches to your estimate. After transferring your material dollars and labor hour totals to the form, add prices for quotations, subcontractors and rentals, as well as direct costs, such as a small tool allowance, permit costs and indirect costs, such as a project manager and supervision.

Labor hours need to be assigned to your electricians. For a 500-hour estimate, you might assign 250 hours to a foreman and 250 hours to a journeyman. Then add your rate (cost per hour) for each electrician and multiply the hours by the rate, arriving at the project’s total labor dollars. Please note that the labor rates used in this part of the recapitulation are without markups for overhead and profit.

If you’re not confident about your estimating skills, get additional training. The last thing you want is an inaccurate estimate.