Writing an estimate
Congratulations! Someone wants to pay you for your services and has asked you for a job estimate. While this is good news, it doesn’t mean you have the job yet.
Creating an estimate for a customer requires some work on your end. To land the client, your estimate needs to have all of the right pieces in place and look professional.
Estimates are essential parts of the business for industries ranging from construction to baking pies. No matter what type of work you do, whether you’re a contractor, a baker, a writer, a voice actor, or any manner of freelancer, at some point you’ll have to provide a detailed written estimate.
You can write your estimate in a Microsoft Word document, use a template, or even take advantage of dedicated job estimate software or apps.
What is an estimate? Is it the same as a quote?
While some people use “estimate” and “quote” interchangeably, these terms differ in key ways. An estimate needs to look professional and accurately reflect the expected total cost and timeline, but it is not in any way legally binding.
A quote is legally binding. The costs in a written quote are fixed unless the customer authorizes a change. If no changes are authorized, your invoice price will match your quote.
Details of the project scope are much more thoroughly spelled out in a quote. And because there are factors outside of anyone’s control (such as prices of tool rentals or materials like lumber), quotes have expiration dates.
If the expiration date passes and the customer wants to proceed with the project, they’ll have to ask for another quote.
A detailed quote is often preferred because clients can better plan for costs. Estimates are just that—estimates.
Of course this doesn’t mean you have carte blanche to give an intentionally low estimate and then jack up the costs during the project. While estimates don’t hold weight in a court of law, they do in the court of public opinion.
Don’t generate bad word of mouth for your business by going over your total estimated cost on a regular basis.
What are reasons someone would want an estimate?
First and foremost, job estimates show professionalism. You know your job so well and what the time/materials required/prices will be that you can reasonably assume what the job will entail.
Job estimates in writing also reassure a potential customer that they didn’t just get a vague verbal agreement or ballpark figure, but that they can count on something more concrete.
Another important reason to provide a written estimate is protection. Both you and the customer have paperwork to refer to should the other party claim something was agreed upon and a dispute arises.
Accurate recordkeeping of estimated project costs comes in handy when proving line items were indeed discussed before commencing with the project.
Important elements of job estimates
Even if you use an estimate template or an estimate form, you’ll still need to have a good idea of exactly what it should contain.
Clients want enough detail to understand the scope of the job, but not so much detail they get bogged down and can’t make a decision.
Here are all the details you need to include:
Your company contact info
If you have a logo, use it! You also need to include your physical address, phone number, email address, and any pertinent social media contacts/handles.
Put in the customer’s name, address, email, and phone number. Include their business name if applicable.
To help you keep track of which job is which, put a big “Estimate #” at the top of the document. Making it obvious will eliminate any confusion as to whether this is an exact quote or a cost estimate.
This is not the date you expect to have the work done, but the date you’re submitting the estimate to the client.
Description of project
This is where you’ll outline the scope of the job. Explain the timeline in terms of the number of hours, what kind of access you’ll need to the customer’s property, delivery methods, and any other details about the process of completing their particular project.
Line items and material costs
Each line item breaks down expected costs. Materials, supplies, tools, employee labor costs — everything that contributes to the total cost.
No one likes to pay taxes, but they sting a bit less if they’re expected. If you anticipate there being any taxes associated with the job, list them.
Total work estimate
This is the sum of every cost in the estimate. Bold it, highlight it, make it stand out to avoid any potential confusion.
Terms and conditions
Include your payment terms upon completion of the job. This is the place for any legal wording to protect yourself in case of price or cost fluctuations.
Thank your potential customer! A little courtesy goes a long way toward securing future projects
If you’re developing a job quote, most of these items will be identical. You’ll include a
“quote number” instead of an “estimate number.” You’ll determine an expiration date for accepting the job quote. Your terms and conditions will likely be a bit different, however.
With a quote, instead of giving the customer notice that total costs are subject to change, you’ll need a section where the customer can sign the quote to make it a legally binding contract.
How to create a professional estimate
To make your job estimate as accurate as possible, you’ll need to spend time determining the exact scope of the project.
Knowing your abilities and the number of hours it takes to complete projects enables you to provide the most accurate estimate. Again, a written estimate is not a contract, but the more you treat it as such, the better you’ll be able to serve your customers.
Depending on the industry you serve, you may need to analyze how much help you’ll need if any. For a construction job, you’re often going to have a team working with you and their availability will be a factor. If you have a solitary job, like painting a portrait or designing a logo for a company, then your timeline can be estimated with greater accuracy.
You can also provide potential customers with a pair of estimates. Offer one that shows expected total costs and one that conveys worst-case scenario costs.
Using a detailed estimate is smart (even if it’s not a literal, signed contract) because it shows the customer the exact price and you’re being as honest as possible about any circumstances that might arise.
- Research your competition
To write the most complete job estimate possible, task yourself with researching the cost of services for a professional or company related to your field.
Your work has value, so you don’t want to charge too little. Pricing jobs fairly requires an understanding of how another company might price their work.
Research fair pricing on a regular basis, even after a job is completed. Doing your homework and staying on top of your pricing will help you get paid fairly year after year and aid you in establishing the best possible relationships with your customers.
- Use a job estimate template
If you’re not confident in your graphic design skills (or you don’t want to hire a graphic designer quite yet), you can always turn to a professional template.
Job estimate templates remove the stress of having to remember where every little line item goes. Essentially, you can download a “blank” template instead of having to create your own. You fill in all the details about labor, cost, payment, scope, and type of work, and you’re off to the races.
- Customize the estimate template
There are plenty of free job estimate templates online you can use. You’ll need to find those that fit with the image of your business; for example, if you’re a contractor or in construction, you won’t want to use one that’s geared towards caterers. The fonts, graphics, and layout won’t match your brand, especially once you place your logo on the template page.
If you’re providing a job estimate for a 4-hour performance of classical guitar for a restaurant, creating a comic strip for someone’s birthday, or providing security for a sporting event, the same rules apply. Make sure the job estimate template reflects your company’s image.
Be aware when you download a free template that others will have the same access to these templates as you do. Take time to customize estimate templates enough so that they look like you created them yourself.
- Use estimating software
To make the job of creating an estimate even easier, you can use estimating software. Usually, this is something that large companies use to streamline the estimate creation process because of the sheer number of estimates they need to send out.
Such software usually requires a bit of a learning curve and customers/clients need to stay on top of updates, but the benefit is it eliminates human error. If you’re a small business owner or contractor, you need to weigh whether the expense is worth it.
Any professional who needs complete consistency and cloud access to previous estimates and templates and also plans on expanding their business should at least consider using estimating software. Most estimating software providers will allow a free trial to see if you like it.
- Consider hiring someone to write your estimate
Yes, you can pay a writer to create your estimate for you. You’ll have to provide them with the details of the job and do the grunt work of figuring out the number of hours, unit cost, labor, and everything else a customer would want to know. But hiring out the writing can help make the estimate as professional as possible.
If you decide to hire someone to write your estimate, look for an individual or company that has experience working with your industry. The person you hire may write for a living and know the best way to construct a sentence, but that doesn’t mean they understand the construction industry!
- Could a graphic designer make your estimate stand out?
You may also want to consider hiring a graphic designer to make your estimates really pop. It’s worth the cost to stand out to a potential client or customer so that they don’t lose your estimate in a pile of papers on their desk.
Have the graphic designer create your estimate form in a file format you can modify, by the way. You wouldn’t want to receive it and realize you can’t figure out how to enter or change your information as needed as your business grows and scales.
Generally, using common kinds of software like Word, Excel, or Google Docs is best if you’re going to create templates from scratch with a graphic designer.
- Be worthy of your estimate
There’s other work to do before you send your potential clients and customers an estimate. This type of labor involves the groundwork of goodwill and references. Customers read reviews online and they’ll search for pictures or videos to see an example of your work. They’ll check with the Better Business Bureau to make sure you’re legitimate.
You can’t bank on “brand loyalty” either. No matter what type of work you do, before someone signs a contract with you, they want to see that other customers and clients who trusted you with their business had a good experience along the way.
If you want to land a project with a job estimate, prove to your customer that you deserve the job. Address all customer concerns by responding immediately to negative reviews and working to fix the problems. There’s no easy method for creating a positive image. Once you have your reputation secure, you can submit your estimates with confidence.