Every job order begins with a detailed quote or estimate, especially in the home service industry. For info on what goes into one, read this in-depth guide.
Customers can be pretty meticulous about how much they’re willing to spend, especially for big-ticket items or services. Once you give them an estimate or quote on something, they’ll demand a detailed breakdown of how you arrived at that figure. Failing to justify the price tag you’ve given them will make them less likely to continue with the purchase.
While this isn’t much of an issue for retail, it is for businesses in the home service industry (e.g., roofing, plumbing, renovations). A typical repair bill is, at the minimum, three figures, which is already a considerable sum for consumers.
When quoting, make sure that you have the following essentials detailed in your estimate:
- Business Information
As irrelevant as it may seem, providing your business details (e.g., business name and address, quote number, contact info) should be first in any quote or estimate. This information enables customers to contact your business for any further inquiries.
Providing business information is so crucial that some countries legally require businesses to do so. In the U.K., the Companies House makes this information open to the public so that they can discern whether or not a business is worth their trust.
- Customer Information
The quote should also include the customer’s contact information. Their name (company name for business clients), address (billing and service), and contact details will suffice.
- Total Estimate
This part is self-explanatory: the overall calculated cost of work items and non-work ones such as taxes. As the essential figure customers want to see, the total cost usually appears twice in a quote: one at the top of the report and another after the itemized breakdown.
Get this right. You don’t want to screw up the calculations, lest risk losing the customer’s trust. Thanks to technology, electronic invoicing apps, like Jobber and others, make calculating totals down to the last digit a breeze. They also enable teams to provide an estimate in the field.
- Itemized Breakdown
As mentioned earlier, customers want to know how you arrived at the estimate. Itemizing the cost of necessary materials and labour is the best way to explain it in just enough detail. One typical quote outlines each item into five elements:
- Product or service
- Short description
- Quantity (if applicable)
- Unit cost
- Total item cost
These items are then calculated into a subtotal, after which the applicable taxes are added for the overall quote. The U.K.’s value-added tax rate is 20% for most goods and services, 5% for some qualified goods like children’s car seats, and 0% for foodstuffs and most essential items.
- Optional Items
While not actually included in the specified job, itemizing products or services that can enhance overall job quality will be a great help. Offering such options allows customers to make informed decisions, perhaps even having those optional items included.
Contrary to popular belief, many quotes, like this roofing estimate template, warrant the inclusion of optional items. You can state in the estimate periodic services like regular gutter cleaning or applicable roof upgrades.
- Dates to Remember
Remember that the estimate you provide today may not be the same a month later because the market fluctuates so frequently. As such, an estimate must include important dates like:
- Date of sending to customer
- Quote expiry (‘valid until’) date
- Scheduled work date if accepted
Regarding the expiration date, most quotes are usually valid for 30 days. However, depending on the business and state of the market, the period may be much shorter. Make sure you know how often your respective industry’s prices change.
- Accepted Payment Methods
Include in the quote how you want the customer to pay for the products and services rendered. You can opt to deal in cash, but consider that not everyone has a considerable sum on hand. If your business charges by the hundreds or thousands, allow more accessible payment options, like credit cards or third-party wire payment services.
- Terms and Conditions
The terms and conditions (T&C) section may be the longest portion of a quote, but it’s equally important. Without it, businesses will be at risk of reduced cash flow, primarily through delayed payments. You can consult a lawyer specializing in business law in drafting your Ts&Cs, but be sure to make it easy to read.
Conclusion
A well-written quote or estimate will answer most questions a customer may have about your product or service. Including these details in one helps both parties: your customer will be able to make sound decisions while your business earns a reliable, customer-first reputation.