Giving a detailed quote is an essential part of building a successful business.
A simple one line quote advising what the job is going to cost doesn’t give the customer any perspective of the job options or what materials will be used in the job, etc. It isn’t necessary to itemise all the costs for each inclusion, although this would be ideal, but do note what is included thoroughly. This will reduce the chance of any misunderstanding over how much the job is going to cost and what is included in those costs.
- The presentation of the quote itself is important – can you present the quote in a folder or on good quality paper?
- Thank the person who has asked you to quote on the job.
- Use a professional letterhead and type the quote – never write a quote by hand.
- Include all your contact details on the quote including any social media and websites/blogs.
- Detail quotes that require materials or workmanship only so that it is clearly stated what is expected.
- Ensure your quote states the GST is or is not included in the price.
- Always put an expiry date on the quote – this will protect you from price fluctuations.
- Always send a copy of the quote by mail, send also by e-mail and include any further information such as your service policy, quality assurances, insurance etc.
Producing a professionally prepared quote is the first step to acquiring customers. They must have all the information they need in that quote and understand what costs and what time is involved with the job.
10 Tips on Quoting
Sometimes it’s appropriate to give potential customers options, such as a flat fee or an hourly rate. Ensure a flat fee option states very clearly the scope of the work and allows you plenty of time to complete the job.
Instead of providing a fixed price and finding out later that you under quoted simply quote to an estimated hourly rate and time estimate eg; $80/hr for 40 hours. This not only makes quoting easier, but customers then understand they are buying a section of your time that you think will be enough to finish the job.
Keeping accurate records of the time you spend on jobs will serve as an invaluable reference for subsequent quotes.
Always add on and extra 15 – 20% on the final price of the quote. This allows for any unforeseen problems and gives you a little leway on the quoting process.
For larger priced jobs it is reasonable to ask for part payment up front. You should expect 50% up front and the other 50% on completion. For very expensive jobs consider breaking the payment process into 3 x 33% payments. On start, midway and completion.
Give a concise quote. Your customers do not know all the costs involved in a project and spelling it out for them is a good way to help them understand they are not being ripped off.
Remember that a quote is very different to an estimate. Make sure your customer is expecting a quote and not an estimate. An estimate is what you think the job is likely to cost and that cost is subject to change whereas a quote is what it’s going to cost exactly.
A quote is a legal agreement between you and a customer to supply a service or goods (or both) at a set price. An estimate is not a legal agreement.
Always add your reputation to the quote eg; how long you have been operating, testimonials etc. This can make all the difference if your customer has two quotes of about the same price – the more information they have or can access about your business, the better.
Don’t forget to add those sneaky costs when quoting or you’ll be cutting yourself short. Insurance, fuel, labour, office costs etc.