How to Write a Price Quote

Every contracting business and service business owner needs to know how to write a price quote (sometimes called a price quotation or price estimate). The average business owner might just be tempted to respond to each inquiry with a simple number for what the service will cost.

Ideally, though, a professional price quote is so much more than the price: it’s a window into who the business owner is, what their business does, and what a customer can expect when doing business with them. Potential customers can learn a lot about a business just from the quote they receive.

This guide walks through how to go beyond a price quotation template and get this step right, both before and after sending the quote.

Before the Price Estimate

It all starts with a call or email: a customer asks for a price quote. Maybe they ask for a quote on repairs they need in their home, or they want help installing a new appliance.

There are some basic tasks to start with: getting the customer’s contact details to follow up (and send the finished quote). But that’s the obvious one. A contracting business owner should also take some time to ask some other questions, such as:

• Does the business actually offer the service the client is requesting?
• Does the home (or other relevant work site) fall within the business’s service area?
• What’s the expected timeframe for the work? Can the business accommodate that?

These sound like straightforward questions. A business owner might even be tempted to take them for granted. But getting these basic answers can save time; no one wants to go through the effort of preparing a price quote only to discover that the client isn’t a viable lead.

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Stay professional at all times.

Many contracting business owners have to visit a client’s home to accurately estimate the total cost of their project, or the client will need to visit the store for a more formal consultation. Either way, the business owner needs to exude professionalism with every interaction, even in these early stages of the sales process.

Showing up on time is essential; it shows respect for the prospective client. Many contractors find it helpful to call when they’re on the way to see a client or when they’re running a little bit late. A little heads-up can help ensure that both parties are ready for the meeting.

Looking professional is another piece of the puzzle. For some business owners, that means wearing a suit and tie. But for others, it might mean a pair of work pants and a branded polo shirt, both neat and clean. Looking polished (within industry standards) isn’t a make-or-break factor for many clients, but it’s a good way to make a strong impression.

Ask all the right questions for a detailed quote.

Once a business owner has determined that the prospective client is a genuine lead, it’s time to ask all the questions they need to create the formal document.

These questions will vary from business to business. For example, suppose a customer is asking for a pricing breakdown for building a new deck in their backyard. That business owner has lots of questions they should ask: Who will be purchasing the materials, like stain, lumber, and sealant? Is another contractor going to be laying the concrete for it, or will the business owner? Will there be any lighting or electrical outlets installed on the deck? What are the expectations if weather doesn’t permit construction? Naturally, the answers to these questions affect the final price, but they also show the client that the business pays attention to detail.

Practice and polish the sales pitch.

Yes, a quote meeting isn’t a true sales call, but it is an opportunity for a business owner to make a general sales pitch. It’s a great opportunity for the business owner to highlight the basics of their competitive pricing, excellent service, industry licensing, and more. This is also a good opportunity for the business owner to show off pictures of past work they’ve done that’s similar to what the client is requesting or offer names and references.

To close out the meeting, a business owner can let the potential buyer know when to expect the finished quote. It’s also vital to deliver that quote on time

The Actual Price Quotation

Now the time has come for writing the actual quote. But writing it can feel a bit overwhelming. Here are some basics that business owners can keep in mind.

Include all the key components.

No customer wants to see a quoted price without information about where that estimated cost came from. That’s why it’s essential for a contractor to give a detailed breakdown of the costs involved, including raw material costs, labor costs, applicable taxes, and so on. Ideally, a quote will also explain details like whether the quote is a fixed price offer or tiered pricing. It will also explain if and how that pricing model is subject to change if additional costs are incurred over the course of the project. This is especially true in industries that use lots of materials that may change in price. The fluctuating costs of lumber in recent years is a prime example of this.

A good quote will also detail payment terms, including how much of the cost needs to be paid before work starts and when final payment will be due.

Since a quote becomes a legally binding contract for the client, it’s essential that both the client and the business owner reach a mutual understanding about these costs and payment terms.

Make sure the quote looks professional.

A finished quote reflects on the business that sends it, so it’s best practice to ensure that the quote looks good to potential clients. Ideally, a quote will be more than just a number; it will look official and polished. This could mean printing the quote on high-quality paper that’s branded with the company logo and contact information on top of the financial details. If the business is sending a digital quote instead, it’s still a good idea to include business branding and triple-check that the formatting of the quote looks good on both desktop and mobile devices.

Consider leaving room to negotiate.

One perk to the quoting process is that it’s a bit fluid; a business owner can adapt their pricing decisions to suit the current market. That’s why some contractors decide to leave some room to negotiate in their quote. For example, they might make their quoted price 5% higher because they suspect the client wants to haggle.

In a similar vein, some business owners include a disclaimer that they’re willing to price match if another contractor provides a lower quote. This isn’t always necessary, but it can be a great way to earn business.

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After the Quote

The quote process doesn’t end the second the quote is sent off to the client. Once the quote is delivered, a business owner usually needs to follow up. Often, it’s a good idea to ask the prospective client how long they’d like before a follow-up call; that shows that the contractor is serious and helps keep them top of mind in the client’s considerations. It also shows consideration for the fact that the customer might be evaluating quotes from multiple vendors.

If a client doesn’t provide a preferred follow-up date, it’s a good rule of thumb to send a note in five to seven days. No contractor wants to spend weeks wondering whether a client plans to hire them or not. Ideally, they want to hear, “You’re hired. Can you start Monday?” But practically speaking, it’s still helpful to hear if the client has gone with another contractor instead. Even a “no, thank you” frees the contractor up to pursue other leads.

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Bottom Line

A price quote might seem like a routine business form, but it’s really a vital part of the sales process for a business owner. Smart contractors use their quote as a way to take their potential customers through a model of the experience they’ll provide. It’s a quick window into their customer experience, their service, and their attention to detail, not just the price.