Canadian Electrical Industry News Week

Shawn Mccadden

Shawn McCadden

Knowing what to charge clients for the work you do is often the difference between long-term success and eventual failure for the business. Many contractors look at estimating simply as a way to determine the cost of a project. In the traditional design-bid model of project delivery, this simplistic approach may work, assuming your price generates enough gross profit to cover your overhead and profit requirements. However, if your current estimating system is limited to only producing the number you charge clients for a project, you may be missing out on many other possible benefits.

First, a few assumptions

By gathering the material, labour, equipment and possible subcontractor costs of a project, contractors determine the direct cost of a project and then use a mark-up amount to determine the sell price for a project.For the sake of this discussion, we must also assume that the contractor has created a business budget. By knowing or predicting the costs of being in business for a predicted sales volume and adding in a net profit requirement, the contractor can determine burdened labour costs and know the company’s mark-up requirement over and above direct costs. We must also assume the estimator knows how to estimate and has experience estimating the kind of work the business performs. Your estimating system must become a tool that facilitates how you do business, not just a way to get to the price.

An estimating system should
• be fast and easy to use. Typically, the yellow pad and calculator method does not apply here. A computerized system allows the estimator to concentrate on estimating, not adding up numbers over and over again to gain or confirm confidence in the end result
• allow for on the spot “what-if” adjustments. The estimator must be able to quickly estimate the effects of any changes or suggested alternatives to the project during design.

By having this ability, the client’s decisions during design are better qualified by simultaneously knowing the financial impacts of those decisions
Estimating must be accurate and adequately detailed

To increase accuracy, estimating should be done so it is comparable to the company’s job costing system. Information within the estimate, and job costing, should be broken down to a level of detail that allows the insight you need to make future estimating adjustments.

Estimating in one computer program then job costing in another may become cumbersome, or may not work at all. Accounting programs will often allow job costing, but not estimating. Typically, after a project is sold, a summary of estimating information is entered into the accounting package as a budget for purposes of job cost comparison. This limitation does not allow for fast estimating or what-if adjustments. Also, it may not be easy, secure or wise to allow an estimator access to the company’s accounting information.

The formatting of each individual estimate, as well as the overall estimating system format, may be the most important consideration. How information is entered into the estimate can limit or expand how it can be used or who uses it. Strive for a format that allows the information created by the estimator to be shared throughout the company. If you build your estimate the same way you build the project, step by step, you can create a critical path for how the project will be produced. This can be a huge benefit to supervisors and others. A predefined path, showing labour and material breakdowns, allows your team to predict and schedule resources including subs, material lists, material lead times, just on time material deliveries, and overall labour requirements.

If done correctly, you can also use individual project information to create one master schedule for all company projects and resources. You will know when you need which employee or sub, depending on skills or abilities, and identify schedule conflicts or shortfalls before they occur. This critical path can also help identify cash flow needs during the project while assisting in generating payment schedules.

Separate costs and quantities

Another formatting consideration is how you break apart the information for each line item inside your estimate.Rather than enter lump sum amounts for materials and or labour, separate the costs and the quantities. By formatting your information in this way you can quickly apply what-if options for material substitutions, other material changes, and/or additional labour considerations for any changes. This also facilitates quick pricing updates when a client calls back two years later and wants to go ahead with the project.There's no need to redo the entire estimate because you’re not sure how the lump sums were determined, just check for pricing changes as the quantity will likely still be the same.


Read more in EIN from Shawn McCadden:

3 Ways To Get Fewer Leads But Close More Remodeling Sales
Don’t Underestimate Your Estimating System’s Potential
Tips on Ball Park Pricing and Charging for Estimates
Is A Contractor Really a Salesperson If He or She Hits Send?
3 Ways To Get Fewer Leads But Close More Remodeling Sales
3 Simple Steps to Covering an Employee's Non-Productive Time
Setting the Example: Getting Employees to Think Like Owners
Comparing Contractor Mark-ups Can Be Pointless and Very Risky
Don't Put Your Business At Risk By Guessing At What Mark-up
Simple Profit Sharing Plan for Contractors

Check out Shawn’s website http://www.shawnmccadden.com/ and blog www.shawnmccadden.com/Subscribe-to-The-Design-Builders-Blog.

* “Understanding what impacts your construction company’s reputation,”

http://www.pn-projectmanagement.com/construction-management-tips/understanding-what-impacts-your-construction-companys-reputation

 

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SaskatchewanThe Government of Saskatchewan is engaging the public to help ensure health and safety legislation meets the needs of employers and workers in the province. From August 16 to October 18, 2021 citizens can provide input on part III (occupational health and safety) of The Saskatchewan Employment Act.

"Our province has a plan for growth that includes ensuring we have safe and healthy workplaces" Labour Relations and Workplace Safety Minister Don Morgan said. 

 


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Canadian Electrical Contractor Discussion Group: Can You Count the Deficiencies?

EIN CECD 400Have you ever been called to fix the work of a 'handyman'?

"Was supposedly done by a"certified ' electrician....told the homeowner that he got a $266 permit....no record at TSBC. Can you count the deficiencies?"

"There is a second panel change in the triplex also.......even more deficiencies. Think the guy was a glorified handyman. Ones not obvious: 240 BB heat hooked up 120....drier on 2p20....range on 2p50....water heater fed with 2c14 Bx on 2p15."

Go HERE to join the discussion

 


 



 

Desert HomeA combination of stunning design, a spectacular desert setting, and exceptional architectural lighting is a winning combination for a private residence just outside of St. George, Utah. JRC Lighting was hired by the homeowner to create the lighting concept for the showpiece home.

"The house has an almost industrial look to it, with a focus on clean lines," said Kevin Meredith, principal at JRC Lighting. "My goal was to keep the lighting understated and let the architecture, and the views, sell themselves.”

 

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David GordonBy David Gordon

This summer EiKO is launching its Z10 product offering. I know, what is Z10 other than the sports cars some of us remember (’69 Z10 Camaro or a 2009 BMW Z10, but let’s go with an American muscle car!)?

So, since it seemed like a sports car “name” (since sports car naming seems to be in numbers), we reached out to Sarah Eastman, VP Marketing for EiKO, who shared that Z10 is an alliance of manufacturers who have developed standards to support an easier lighting controls process within fixtures (remember, I’m not a product maven).
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Product News

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Milwaukee M12 Cable StripperM12™ Cable Stripper Kit for Cu THHN / XHHW aims to improve the cable stripping experience. With no exposed blades, the cordless cable stripper provides safer stripping than with a knife. The cable stripper's compact, right-angle design allows you to maneuver it more easily in tight spaces with less strain on the wrist. The bushing design and adjustable depth gauge deliver cleaner, more accurate and consistent strips across all sizes.

The cable jacket stripping tool is not only compatible with all MILWAUKEE® bushings but is also compatible with competitive quick-change bushings.

 

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Incoplas HybridThe Incoplas® LED Hybrid is a durable multi-purpose and corrosion-resistant LED lighting solution that can be used in heavy industrial applications where hazardous location lighting is required.

Certifications

Class 1:

Flammable Gases and Liquids

Division 2: The hazardous atmosphere is only available infrequently (i.e. in case of spill).

 

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EarthTronics 25-Watt Emergency Driver for Linear HighbayEarthTronics LED emergency drivers regulate the power supplied to the LED fixture so that it can operate as a light source in the event of a power failure. The purpose of emergency lighting is to ensure that lighting is provided promptly, automatically and for a suitable time when the normal power supply fails.

This insures that people within the building can evacuate safely in the event of an emergency. All EarthTronics emergency drivers meet specific UL, CSA and NFPA requirements. Always consult local code requirements when specifying emergency lighting products.

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Peers & Profiles

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Given the complexity of hazardous locations, Bozek saw a need for education while working in the field and began developing training courses designed.

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Eric TordjmanBy Blake Marchand

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“How we differentiate ourselves is we’re lighting specific, we do very little in the way of electrical, and really emphasizing our expertise towards solutions selling...

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