Knowing how to price electrical jobs accurately can help you win more work, earn more profit, and grow your business.
But there are a lot of elements to consider, like materials, labor, and overhead, to make sure your pricing strategy is profitable.
To help you improve your quoting process, we’ll walk you through how to quote electrical work the right way.
Here’s how to estimate electrical work:
1. 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 quote accurately reflects the specific requirements in the RFP.
If anything is unclear, ask questions to get clarification before continuing on to the next step.
2. 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:
If the electrical job 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.
3. Perform a material takeoff
A material takeoff is a comprehensive list of the inventory you’ll need for the job.
To perform a 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
- Electrical wiring
Then use this list to calculate prices for each material and your total materials cost.
Keep this document handy, as you’ll include the required materials and pricing in your estimate.
4. 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:
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.
Average hourly rate for an electrician
On average, electricians earn an hourly rate of $23.00 in the U.S. But your hourly wage and annual salary will depend on where you work, how much experience you have, and the electrical license you hold.
For example, journeyman electricians earn (on average) $58,180 annually, and master electricians earn an average of $69,385 annually.
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5. 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 ÷ # 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 # of hours the job will take to complete
6. 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.
FREE TOOL: Try our free profit margin calculator
7. Create your electrical estimate
Here’s an example of an electrical estimate you can send to your client:
Your electrical estimate should include:
- Your business’s name, logo, and contact information
- Your client’s name and contact information
- An estimate number
- A breakdown of the electrical services or electrical installation you’ll be providing (e.g., replace an electrical panel or install an electrical outlet), and the cost estimate to complete the job
- The electrical materials you’ll need (e.g., wiring, electrical panels) and each material’s cost
- How long the estimate is valid for
- The total cost for the electrical project including taxes
Some electrical estimating methods, like paper and pen or Google Sheets, can be time-consuming to manually complete.
With an estimate template, creating an electrical estimate should only take a few minutes. This way, you can quickly send professional-looking estimates that impress new clients and win more jobs.
Get your free electrical estimate template
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Win more jobs with professional electrical estimating software
Knowing how to charge electrical jobs and creating professional-looking estimates can help you win more work and grow your business.
Once you send your estimate, use electrical quoting software like Jobber to create and track quotes, schedule jobs, and convert quotes into invoices.
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