Estimates are one of the first interactions that you have with customers. Creating them may seem like a daunting task because one wrong entry can result in financial losses. At the same time, an estimate that’s too high because you’re playing it safe can backfire. Creating estimates that are accurate and timely are critical to your operations. The greater the efficiency, the sooner you can submit it to a customer and begin work. The key to a great estimate is finding the right balance between remaining profitable and competitive. Field service management software that allows you to create and submit estimates effortlessly will help ensure your quotes are accurate and fair. By knowing quote-building best practices before using electrical estimating software, your estimating skills will be as awesome as your wiring skills.
Best Practices for Creating Accurate Estimates Using Field Service Management Software
- Know your material costs: In addition to using estimating software, it is a good idea to know the exact costs of the materials that your business uses. Make a list of the top 150 items that workers use 95 percent of the time (e.g., breakers, dimmer switches, GFCI receptacles and wires) along with their raw costs. Because you are selling these items to customers, part of doing business is making a profit on the materials to help pay for overhead expenses. Field service software like 360e can generate reports that tell you what the average overhead costs are. Most contractors mark up the cost of materials by 15 to 25 percent.
- Know the fully burdened labor rates: The cost of labor is more than the hourly rate that you pay your workers. It includes taxes, bonds, insurance, benefits, payroll expenses, union fees, labor agreements and so on. If you don’t have a good idea of what your labor rates should be, get in touch with your accountant. This professional can help you understand what your electricians cost you, so you can provide an accurate estimate.
- Know how long it takes to complete a job with the number of workers assigned to it: It’s one thing to install light switches in a new multi-story building and another to replace them in a building with old wiring. You might have an idea of how long a task should take, but how long does it realistically take? What types of things could cause setbacks that you should include as a contingency? What is the probability that these will happen? A good estimate includes accurate material costs and an accurate project timeline.
- Don’t base your rates off a competitor’s rates: The competition’s rates only serve as a guide. Don’t hurt your bottom line by charging rates that are less expensive than the competition’s if you deserve more. Keep in mind that a competitor may charge cheaper rates because it doesn’t understand its true operational costs, use the same vendors or have workers that are as skilled as yours are.
- Include detailed line items: Customers want to understand how they’re spending their money. Providing detailed line items that include material costs, labor and other expenses establishes trust and helps a customer understand a project’s total cost.
- Check your gut: After creating an estimate, take a moment to lean back in your chair and think about it. Will it really take two workers three days to wire the house? Use common sense to assess your schedule of values.
- Make your estimate look professional: Customers are more willing to agree to an estimate that looks professional because professionalism establishes trust. The estimate should have a neat, clean appearance and be simple to understand. It should also include details such as your complete contact information, the name of the person who created the estimate, the date, estimate number, license numbers, and other important credentials.
- Pitch in person: For larger estimates, give customers the option to set up an appointment for you to review the bid in person. Personally presenting a bid allows you to answer questions, prevent misunderstandings and deliver great customer service.
Rather than manually creating estimates, use field service management software to do it for you. 360e is a custom, user-friendly program designed specifically for electricians that allows you to save and update material costs, labor costs at multiple pay rates, permits, equipment use and other costs to build quick, accurate estimates. It only takes one click to convert estimates into jobs. The simple-to-use tracking system saves project information and job updates so that creating an invoice is effortless. Fast, precise estimates give a great first impression. Let 360e help you wow your customers from the start. Schedule a free demonstration to learn more today.