How to Bid on Commercial vs. Residential Electrical Projects
When construction is how you bring home the bacon, bidding is just part of your life. But even though you're familiar with the process, there are a number of differences between residential and commercial electrical construction bids that you may not be aware of. Here's the basics of the differences the between these two types of projects, a quick summary of how that impacts your bid and the bidding process and a few other details to help you through the process.
What's involved in a residential project?
In a residential project, you'll probably run a lot of the same situations, where a customer needs new 110 volt circuits run with the occasional 220 outlet for a larger appliance. But beyond that, there's a lot more room for creativity in the project. For example, a homeowner may call you out to help create a media room or home theater in their basement. They don't care how it gets done, as long as it matches what they're looking for in general or can build on the vision they have for that space. However, you may spend more time holding a residential client's hand while they make decisions, as you're viewed as a subject matter expert in whatever part of the project you're taking on. Though larger projects may involve an architectural firm, many projects are just the homeowner asking what you think and giving you a rough outline of what they want in the long run.
In residential work, you're probably more likely to run into issues in the project, such as areas where there's moisture in a wall system causing problems, rotted wood framing, renovations that didn't follow code and other areas where you'll spend more time and possibly have to alter your bid to get the job done. For that reason, it's important that you thoroughly inspect the area being worked on before preparing your bid and add in a cushion for smaller changes that need to be made. In general, you'll know fairly quickly whether or not you've been awarded a project, but will need to be more flexible with your schedule and meeting times to keep up with any changes the owners want made as the project is ongoing.
What's specific to a commercial project?
Commercial projects involve more specific skills than a residential project. Because it involves different skills for different projects, your crew needs to have a wider range of skills than you would on a residential project. Instead of just switching between a couple extremely common voltages, the project may involve three-phase power, equipment that requires transformers and similar diverse options that you'll need to take into account when bidding.
In general, commercial projects are fairly rigid on what they expect, because a design firm may be involved with specs and plans. If you're going to recommend making a change to those documents, expect resistance and plan to have documentation to back up your proposal. Commercial projects are more focused on following exact plans rather than changing things based on your own experience. You may also spend more time meeting with the GC, architect or client to keep up with any changes. Though these projects can bring in more profit, you'll need to keep work lined up when a large project ends to keep your crew working. Bidding often entails having your information in by a particular day and time, after which you'll be informed if you've been awarded the bid or not,
How do I pick which type is right for my business?
If you prefer a number of smaller jobs that keep your business income fairly steady, residential construction maybe the way to go. If, on the other hand, you want to spend less time chasing down the jobs and more time doing them, albeit at a less consistent income level, commercial jobs can be a good way to go. What's your community like? If your business is in a small bedroom community, you'll get more work closer to home if you stick with residential. If you're in the middle of a larger city or industrial complex, you may be able to stick to only doing commercial construction.
For the most part, construction companies tend to focus more on one area than the other. That being said, there is some crossover often happening when the economy is rough or the regional market shifts to one type of structure or the other. If you take a little time to study the market in your area, you can figure out relatively quickly which type of work tends to have the most jobs and the better profitability for your region.
What kind of estimation software do you need?
No matter which type of construction you do or if you're not sure if you'll stick solely with one or the other, you can use the same estimation software. Though there may be a few companies that tout estimation software that only specializes on one side or the other, for the most part you don't run into a situation where you've used commercial estimation software in the past but now need to buy residential estimation software as you change your focus. That means you don't need to spend a lot of time learning the differences between estimation software packages, because it's the same one you've used all along.
Whether you decide to work with commercial or residential projects, you still need the right estimation software to ensure you can quickly and effectively handle that part of your business without spending all your time working on paperwork. Esticom has an excellent solution that helps you get from bidding to billing easily and effectively, while providing you with the analytics you need to figure out where to best spend your energy getting new jobs. Take a look to see what else Esticom can do to take your contracting business to the next level.
Chris Lee has an extensive background in preconstruction management as a former specialty contractor and business owner. As the Chief Estimator at Esticom, he’s helped thousands of specialty contractors digitize their preconstruction process to increase revenue and profitability while decreasing unnecessary overhead.
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