ECN Forum Forums General Topics of the Trade Business Related Discussion rewiring house

Hi Jim,
You say you've worked in the trade for 25 years but not what branch the majority of your experience is in.

If you've done a lot of residential both new and remodel then on any given project you should have a pretty good idea of both what challenges your likely to run into and how many man-hours it could end up taking in a worst case scenario.

If you were running jobs and were responsible for ordering the material for most of those 25 years then you should also have a good idea of what you would need to buy to get a given job done.

If you know these your not guessing, your applying your experience.

Simply put,the number you give should equal the sum of:
Materials
Labor
Overhead
Profit

You need to know what every man-hour of labor costs you.
If you have employees, how much does it really cost you after paying comp, benefits, bonuses, etc. to send your crew out for an hour?
If you work in the field, or it's just you, how much do want to pay yourself? You should be able to pay yourself more than an employee for bidding purposes due to not needing comp on yourself.

Next you would need to get current pricing from your wholesalers on all the materials you'll be buying for your project. These numbers can vary from wholesaler to wholesaler and can also change considerably with the rise and fall of the commodities market so check them often. It's important get a locked in quote from your suppliers and to write into your contract the ability to adjust for market price fluctuations should your client wait three or six months to accept your bid.
If your getting good pricing you should be able to markup your material a bit. 15% is not uncommon.

You also need to figure your overhead. It's the cost of all of your operating expenses over the time period of that job. License, bonds, insurance, office costs, equipment costs and maintenance, vehicle costs and maintenance, gas and travel costs and anything else that you'll pay for to get the job done that isn't the material and labor that becomes your finished product.

Lastly you need to figure the profit your company is to make on this project. This is above and beyond what you pay yourself hourly for working in the field. If your fairly accurate in estimating the other costs you should be able to get away with 8% - 10% and still get jobs.

Add it all up and then stare at your numbers and worry yourself sick for a while:)

Keep in mind who you will be bidding against and what their labor and overhead costs are likely to be. If you're a one man shop you should be able to give competitive bids and make good money due to lower overhead and the ability to adjust the profit number a bit if necessary.


Your goal is to get enough work. If one gets away because you were too high that just serves to let you know where you were at relative to your competition. You would rather have that than do everything too low.

Good Luck!

When I was writing contracts they also told us we had to add "risk" to the total.
That is to cover the bad thing(s) that can happen. Each job probably has a different risk factor.

Quick good example: 1 4" recessed light added to a kitchen.Off of an existing light. Kitchen looked newly remodeled. (1982-house)
I asked "oh and they did the ceiling too?".
customer: " Oh yes the whole place was all torn up".

6' total distance, I opened the existing light, (old work).

"Oh ****, Theres three ceilings here!!!......
.....3 hours later, I was cleaning up.
Snaked it all really a bear!!!!
I only estimated 1.5 hrs. But there is more "old work" to do.
That will balance it out.(I took a good look at that on the walk thru).

So you never know, cover your bases.
I have even given rebates when a job has gone very well.I just don't tell that I may!

In my bids the risk factor is covered by my analysis of the worst case scenario on that project and how likely I think it is that I will be seeing the worst of it. In that I'm defining risk as how much extra time and materials, extra trips back or even tool rentals I might need to get it done. Any other form of risk is why I pay for insurance.

I have lost jobs because I had labor and materials in that wouldn't be necessary if all went smoothly.
I have lost jobs because the owners personality led me to include enough time to talk with them for half an hour each time I attempted to install anything.

I know a few of those didn't end up going as bad as I had covered myself for and as the economy keeps tightening up I may have to take on a bit more of that risk myself.
It's only money -- until you've priced yourself out of making any. Then it's serious.

My preferred way of dealing with the really risky ones (and most limited access remodel work for that matter) remains giving a worst case number but offering to do it T&M. They often take the T&M option and it usually comes in lower than my worst case estimate.
I have had a few that just wanted a number. They are usually just using me to test somebody else's bid.



As far as example's of what can go wrong and what types of risk can get involved, my personal favorite:

Get a call to check out a burned dryer receptacle while sitting home with a sore finger from a 2" sliver two days before. I figure it's just a receptacle change out and I can handle that with a sore hand so I drive the 25 miles to have a look. Loose connection has burned wire back to where it emerged from a hole in the bottom plate. Surface mount box-no clamp or even a bushing. It's out into the pouring rain to find the access to under the house. There it is in the mud. Crawl under and find 12" of standing water against the foundation right where I need to be to check for any slack in the romex. No slack to be had. Out of the hole, hose off the mud, off to local hardware store that fortunately had a good electrical section. A sound splice and a cut-in box later, I'm on my way home soaking wet having been covered in mud and hosed off 3 or 4 times.
Two days later I'm in the hospital undergoing emergency surgery to scrape out the infection in an attempt to SAVE MY HAND!!! Antibiotics apparently aren't effective enough to kill major infections in one's extremities. Who knew? They make me stay overnight on IV antibiotics.
Turns out that standing water was loaded with ecol i from a recent bathroom remodel. Oh, and there was still a piece of the sliver in my finger anyway so they took that out.
After all deductibles were paid that job ended up costing me close to 3K. Of course without insurance it would have been over 25K.
How I got the sliver? Came off my ladder drilling over a doorway trying to save a customer from having to add 50' to a feeder that would have then required oversizing.
It's true---no good deed goes unpunished.

There are also things like that errant diversabit shot that came out through the walnut book case.

... risk.

True enough, but things like that are usually included in the inherent risk of just doing this kind of work. That's why we measure twice or even three times. There are extreme cases but those I wouldn't do for anything other than T&M and include disclosures that damage to the residence is possible or even likely.

My motto= I can add anything anywhere you want it. Some things just require more repair behind me than others do.