cost estimating tips

The Professional Way of Cost Estimating Using Top 6 Electrical Estimation Techniques

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Estimating cost is one of the many critical steps in the overall life of any electrical project. Other crucial considerations include the application of a construction schedule software for well-organized scheduling processes. For electrical cost estimation, it would probably be an understatement to call it tricky since many factors are associated with it. Moreover, there are several and different electrical cost estimation techniques available for an application today. Questions like “Which technique works best?” “Is one better than the other technique?” “What exactly to choose among these techniques?” have been repeatedly.

To get started, a rundown of the best six electrical estimation methods will be outlined below. Read further the following details and decide which one will work best for you. Choose wisely.

1. Labor Unit Method

The very first distinction any electrical contractors should accept is that a particular labor unit isn’t absolute, hence, it is more define as a starting point or a benchmark. It is a major role to familiarize more the company’s present productivity. Studying job costing records can be done first and it also allows an estimator to know or be informed about the company’s current labor units in comparison with the settled benchmark.

A successful electrical contractor uses project management software and keeps precise records of job costs and will consistently make revisions. This particular concept permits the estimators to utilize any of the generally recognized labor units. This method is also proven to more accurately represent the work that is required to complete any given tasks apart from allowing estimators in identifying labor units. However, it should always be taken into consideration that issues might still arise if estimates cannot be accounted for unfavorable working conditions.

For basic units, there is a certain pro-data coverage included and it profoundly relates to labor functions as follows:

· Normal actual installation job

· Normal job installations for any related activities

· Normal installation layout

· Normal subsidiary material handling

2. Per-Point Method

Pricing per-point wherein all involved fixtures like a switch, fan, sensors, etc. are classified as a particular point with an essential dollar value. The already classified specific points will be then added and multiplied for every point wherein the total number of fixtures/ points are being multiplied and tallied by a certain amount, which results as the project price. This particular pricing method is commonly considered as an easy and quick technique; however, it can thwart danger as it doesn’t take other different requirements for every project into outmost consideration. For project management, the best construction management software like Pro Crew Schedule, is proven to be very beneficial in every phase of the project. All features are designed to meet all the needs of both contractors and subcontractors.

An easy example will be outlined: If the electrical contractor estimates a project with an overall total of 80 points and the exact dollar value being chosen is $100 per point, the project’s estimation will be $8,000. The per-point method is a quick way of estimating and it will give an absolute satisfaction for estimators in terms of analytical insights. Considering the list of requirements specifically for individual projects, issues might arise. For some, this method is believed to be too general, which can result in unexpected delays and money runs out abruptly. Project managers focus on numerous different matters, including methods and techniques used for cost-estimation, project scheduling management implementation, crew management, etc.

3. Assembly Estimating Method

This method has allowed contractors to create more sophisticated takeoffs because units that directly go into estimates are for the overall build of projects or an entire assembly. These assemblies have taken into account all the necessary labor and materials involved in executing the electrical plan. All involved materials and resources are best managed, well-organized, and tracked anytime using construction scheduling software. Contractors have to be essentially equipped with this technology to handle any construction-related projects further.

Furthermore, assembly estimating or pre-build is a merely simple way to create takeoffs. It also tends to manage the quotes, material costs and ordering procedures mainly because every assembly includes all the essential materials to accomplish a unit price. Some of the most important considerations for this method are outlined below:

· Tenderers are mandated to quote unit rates using assemblies or pre-builds in a schedule

· In order for a tenderer to create their original assessments, quantities should be included

· Quantities are also included in order for the tenderers to take calculated risks if early termination happens properly

· Similarly to the per-point method, this assembly or pre-build technique is commonly leaving you out of pocket

· Issues might occur that surely impact the costs of the work because of imprecise takeoffs

4. Design and Construct Method

In this method, hands-on involvement during the design process, together with the owner is necessary apart from implementing or executing the electrical project. A design and construct project approach requires the entire team to be more responsible in taking some crucial concepts developed from the client. Detailed designs should be complete before proceeding in the electrical construction. The best way to meticulously gather and save all collective information about the client’s interests, specifications and expectations to the project is through the use of a builders schedule software. This tool is capable of saving, keeping and tracking all inputted details where it can also be accessed anytime and anywhere. This is the very reason why contractors and subcontractors have greatly recommended this software tool.

To effectively construct or design the method, a comprehensive understanding of all aspects of the electrical project is what to be equipped with. It all includes materials, labor costs, equipment and lastly, the means and methods of design. Through this, it helps to provide visual aids for the process. Perhaps, the only drawback when it comes to this method is its unchanging complexity.

5. Guesstimating

This refers to be an expert’s game. This method isn’t recommended as the first or even as a second suggestion. However, you can choose it as a way of cost estimating only if you are a master or an expert on the thin slice. An electrical guesstimate is defined as a quantitative approximation and not directly based on any previously observed data. It is rather based on a guess or gut feeling. Usually, this method attracts a much higher level of uncertainty.

In the world of electrical business, guesstimating is known as a quantitative approximation. In more dynamic environments, particularly for electrical construction, the general scope commonly becomes the moving target. Hence, guesstimating the scope simply implies significant flexibility.

6. Budget

There is that one particular term and it says “electrical budget quotation”. It refers to a rough estimate of construction costs used to be prepared without any trace of detailed information in terms of both type and quality of materials. Generally speaking, to break down the budgetary quotation more effectively, providing a Design Brief is very crucial and a must-do. This Design Brief is intended for Electrical Supply requirements, communications, lighting, power, etc. It also shows associated costs and other involved assumptions.

Obtaining full funding solely for the project and providing an effective cost-control mechanism when it comes to the electrical construction process is definitely one crucial reason to fully complete the budget. The electrical contractors can able to reduce the exposure to cost overruns through precisely develop the “most real costs”.

Most Common Estimating Mistakes

 

During the takeoff process, estimating mistakes often created, while bidding mistakes are usually made in the submission and summarization of the bid. However, bidding and estimating are two different functions and estimators usually made mistakes if both of the features are being used simultaneously. The following list below has outlined some of the most common estimating mistakes:

Failure in highlighting items like these have been taken off

· Rushed takeoffs

· Reduced drawings

· Duplication of items

· Missing documents

· Failure to understand electrical construction

· Failure to count the materials early to suppliers

· Using square foot pricing

· Failure in setting materials and labor units the same

· Delegating the estimate’s part to another

· Disorganized charts and lists

· Incorrect material prices

· Omissions in the scope of work

· Imprecise scales utilized for takeoffs

· Last minute changes

· Incorrect labor column application

· Project duration isn’t clearly understood

· Failing in asking questions and using a checklist

Wise and practical estimators will definitely complete all takeoffs and continuously check it all, looking for any possible mistakes. Bidding the project will come next once the estimators are confident enough in the newly completed takeoffs. That’s how these essential matters are outlined and processed.

 Key Takeaways

 

To educate oneself about cost estimating procedures is crucial, and there’s no reason to stop there. Learning, training and exploring must be consistent. There should be constant exposure in this set of techniques to gain knowledge further, widely improve the processes used, and, most importantly, explore new methods. Regular checking to all work done is also essential to determine any significant estimating errors.

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