Keep in mind that sometimes a customer won’t actually know what goes into a job – they just know what they want the final outcome to be. In many professions, this means you must actually visit the customer’s worksite to evaluate the job properly. For example, if you are in construction and the customer wants to add a new deck onto the back of their house, you’ll need to look at the state of the ground below where they want the deck to be, as well as evaluate how they want to attach it to the house and how the house itself is built.
If there will be outside work involved, you’ll need to make allowances for possible weather delays depending on the season in which the work will be done.
The date by which the customer wants the job done also factors into this. For example, it may be possible for you to complete the job on your own, but it would take you three weeks to complete it. However, the customer needs to have the job completed by the end of the week, which means you would need help to meet that deadline. You also want to keep other commitments in mind. If you know it would take you 20 hours to complete a job on your own, but you’ve already committed to projects that will take 40 hours of your time during the period the customer wants the job completed, you may need extra help so you don’t over-extend yourself.
Purchasing new tools may be preferable if you anticipate you will need them for other jobs in the future. You typically can deduct these purchases as business expenses on your taxes. Keep in mind that if you decide to do that, you can’t pass on the full purchase price to your customer. If you have basic materials that you frequently use for different jobs, keep price-lists for reference so you can save some time when you’re calculating an estimate.
Keep in mind that “competitive” does not mean that you should aim to underbid the competition. You won’t make any money that way, and potential customers or clients may be suspicious if your estimate seems too low. Have confidence in your skills and your work product. However, you do want to have a general idea of the skill level and experience of similar professionals in your area. For example, if you have 20 years’ of experience, you would want your estimate to be considerably higher than someone who’s only been in business a year because you have more to bring to the table. To find out what similar professionals in your area are charging, check listings on websites where professionals can advertise or promote their services. If there is a professional or trade organization in your area, they also may have information on project prices based on survey results.
Be sure to thank them for their offer and speak positively about their project. Avoid making negative statements or implying that their job will be challenging or difficult for you.
This is important when you’re describing the work to be done. To continue the previous example, you might describe the deck-building work as “materials for new deck” and “installation of new deck. " This keeps your potential customer’s attention on the final product, not the work that will go into it.
Keep in mind that often people who hire one contractor won’t bother to call any others and tell them they’ve decided to go with someone else. So this follow-up is as much for you as it is for them. Knowing whether you’ve got the job can help you plan your work time and manage your staff efficiently.
If you don’t yet have letterhead, you can create something basic on any word processing program. Make sure it includes your name, your business name, and contact information such as an address, phone number, email address, and the URL of your website if you have one. Include your logo in your letterhead if you have one. This is another way to make your estimate look professional and help it stand out from any others.
You might also include a disclaimer immediately under the word to the effect that the actual final cost may be higher or lower than the estimate you’ve given.
You can group services into broad, general categories for an estimate. This can help you more easily find a ballpark price without having to spend too much time finding exact figures just for the purposes of an estimate. For example, if you are building a deck for a homeowner, you may have cost breakdowns for “materials” and “labor. "
Memberships in professional or trade organizations also make you appear more trustworthy and can set a potential customer at ease about doing business with you. If you have badges from any review sites or social media platforms, such as Yelp, you might include those too so potential customers can see what other people have to say about your services. [18] X Research source
Make a statement at the end of your estimate even if you have something written under the word “ESTIMATE” at the top of the page. For example, you might say “The above price is a ballpark estimate, not an exact quote. Your actual price may be higher or lower depending on a variety of factors. " You can describe the factors that might contribute to a difference between the actual price and your estimate, but it isn’t strictly necessary. If you do include reasons for a difference in prices, don’t get too detailed or verbose in your explanation.
For example, suppose the customer said they want their new deck built as soon as possible, but at the latest they need it completed before a holiday gathering they have planned in three weeks. You might provide an estimate for getting the deck completed just by their deadline, and another for getting it done more quickly by hiring additional labor. It may be worth the extra cost for them to have the peace of mind of knowing that their deck will be completed before their party, even if there are weather delays.
In some cases, a customer may ask for a quote rather than an estimate. Or, a customer to whom you’ve provided an estimate may request a more exact quote. Thank the customer for the opportunity to work with them, and include a statement about how excited or interested you are in their project. If there is something specific about the project that sparks your interest, mention it briefly. You will give the customer the impression that you are personally invested in their project. For example, you might write “Thank you so much for the opportunity to build your deck. I am especially excited to work on the fire pit at the center, which I think will be a lovely addition to the ambiance of your backyard retreat. "
The same as with the estimate, you can put the word “QUOTATION” or “QUOTE” at the top of the page in all caps. If you used red for estimates, you might consider using a different color, such as green, to distinguish the quote from the estimate – particularly if you’ve given the customer both.
Transportation, hired labor, and equipment rentals also should be included here. Don’t forget to include any administrative costs, licensing or inspection fees, and other expenses you will incur as a result of completing the project.
For example, you may be willing to work for a limited profit if the customer is a church or nonprofit organization. To calculate profit, decide on a percentage and then multiply the subtotal by that number. Then add that amount to get the total cost for the customer.
The more detailed you are, the more you’ll inspire confidence in the customer that you’re not hiding anything or trying to charge them for services they’re not getting.
Specify that the price is legally binding if accepted by the customer. If there are specific conditions, such as a weather event, that could result in the quote being altered or rescinded, these should be stated specifically.
For example, if you require cash on delivery, you should include the term “COD” at the end of your quote. If you require a deposit, state exactly how much is required and the deadline by which you must receive it in order to start the project on the timeline specified.
Make a copy of the signed quotes for your business records before delivering it to the customer.
