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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ABB RoboticsABB Robotics is driving automation in the construction industry with new robotic automation solutions to address key challenges, including the need for more affordable and environmentally friendly housing and to reduce the environmental impact of construction, amidst a labor and skills shortage.

Robotic automation offers huge potential to enhance productivity, efficiency and manufacturing flexibility throughout the construction industry, including automating the fabrication of modular homes and building components off-site, robotic welding and material handling on building sites and robot 3D printing of houses and customized structures. 



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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

 


 

Smart GridHarnessing Canada’s immense clean energy resources requires transformational investments to modernize our electricity grid. The Government of Canada is investing in renewable energy and upgrading the electricity grid to make clean, affordable electricity options more accessible in communities across Canada.

The Honourable Seamus O’Regan Jr., Minister of Natural Resources, today launched a $964-million program to support smart renewable energy and grid modernization projects that will lower emissions by investing in clean energy technologies, like wind, solar, storage, hydro, geothermal and tidal.

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Trilliant Partners with the City of CowansvilleThe City of Cowansville in south-central Quebec is the largest city in the Brome-Missisquoi region, with more than 15,000 residents. Despite being a smaller-sized city, it is known as an economic and industrial hub.

It also has a strong focus on innovation and efficiency — as demonstrated by decisions such as the one it made in 2017 to use beet juice to help combat icy winter roads, allowing the City to reduce the amount of salt it was using, thereby saving money and decreasing the impact on the environment. 

 

 

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Keith SonesBy Keith Sones

The writing was on the wall.  The closures would happen. But a lot of people were upset, and I was one of them. 

In the early 2000s, my family and I were living in a mainly rural (at least by city dweller standards) valley in south central British Columbia.  The West Kootenay region is known for its diverse outdoor recreation activities and as a great place to raise a family.  It has a proud industrial history, evidenced through the longstanding pulp mill, a massive lead zinc smelter a few miles away and several hydroelectric dams, all of it within spitting distance of the mighty Columbia River. 

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Product News

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The Lumenquad Small and Medium are the latest additions to a family of sleek, elegant, high-performance projectors that has already been validated with honours, including recognition in the PIA Awards in 2019, together with a Lux Awards for Exterior Luminaire of the Year in 2019. 

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Wiha Lineman's Pliers and CrimpersWiha Insulated SoftFinish® Cushion Grip Pliers and Cutters are the standard for premium quality featuring ergonomic cushion grip handles for comfort and control, dual durometer construction for long-lasting durability, and handles directly molded to the tool steel for a permanent bond.

The grips feature a slip guard handle design for added protection at the front-end and raised rear-finger steps for easy opening at the back-end. Wiha Insulated SoftFinish® Cushion Grip Pliers and Cutters consist of premium quality tool steel for strength and durability and induction hardened cutting edges and jaws for superior sharpness and longevity. 

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eLumigen Poultry Lamps - 2000K, 3000K & 5000KIdeal for rough service applications, the A19 & PAR Series are engineered for high efficiency, vibration resistance, shatter-resistance, elevated heat environments, and wet locations. These dimmable LED Lamps help reduce energy costs, labor costs, and the headaches of frequent lamp changes in tough applications.

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As per President Austin Brennan, their experienced and knowledgeable team can be depended upon in any situation to deliver quick and efficient service. On top of their product solutions — ranging from electrical, automation, safety, lighting and portable power distribution — 

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