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Pricing and Payments

Price Quotes: A Short and Easy Explainer for Business Owners

November 8, 2021 6 min. read
Academy / What Is a Quote in Business?

Think of price quotes as the secret weapon of your business—they play a huge part in whether or not potential clients decide to book your service business to do a job.

Accurate and professional price quotes provide valuable information upfront and keep you and your customers on the same page.

This helps to avoid future invoicing disputes, build consistent price lists, and keep bills predictable and straightforward.

So what is a price quote and how can you use them to win more jobs? Find out in this overview.

What is a price quote?

A price quote is usually a written breakdown of costs that a service provider gives to a potential client before they agree to work together.

It includes important information about a job, such as individual line item descriptions and their prices, as well as the total cost including any applicable taxes or discounts.

At this point, neither the client nor the service provider have any responsibilities or obligations to one another. Once a client agrees to a price quote it’s binding. You can move forward with a contract and start working together.

Here’s an example of what a price quote looks like:

screenshot of quote in Jobber

What’s the purpose of a price quote for small businesses?

As a service business, quotes help you to turn leads into clients. When prospective clients are able to review a detailed breakdown of the costs associated with a job, it helps them to understand exactly what they’ll be paying for.

This shows that you’re honest and upfront when it comes to your pricing and that there won’t be any hidden costs or surprises down the road.

Price quotes are also useful when it comes to creating a standard price list and ensuring that you have a healthy profit margin. Instead of pricing and billing off the cuff, they give you a chance to review and include all the costs associated with a particular job. This keeps you from missing any additional charges, like parts, materials, or extra supplies.

As an added bonus, price quotes are a handy way to prevent and handle pricing disputes. Being transparent about costs from the get-go leaves little room for confusion. But, if there is any, you can always refer back to your original price quote as proof of the agreed-upon price.

FREE TOOL: Try our free service price calculator

What’s included in a price quote?

Price quotes are typically used for fixed prices rather than variable costs. If a job will include any variable costs that you can’t estimate, make sure to note that in your price quote and any communications you have with the client before the job starts.

Price quotes generally include:

  • Company information, such as the company name, logo, phone number, and website
  • The potential customer’s contact information, like their name and the service address
  • A price quote number
  • An expiry date
  • Line items describing the required services and their individual costs
  • The overall price of the job
  • Payment terms (for example, if a deposit is required)

READ MORE: 4 ways itemized quotes help you grow your business

Price quote vs. estimate: What’s the difference?

A price quote is an accurate breakdown of the cost of a job whereas an estimate is an educated guess. Usually, estimates come before price quotes and don’t include detailed pricing information, like specific costs.

Another major difference is that once accepted by a client, a price quote is binding, while an estimate is not.

Price estimates can change based on a variety of factors, like a visit to the job site or the actual cost of materials.

Price quotes are (mostly) set in stone, unless any unexpected issues arise, like additional labor or extra parts.

READ MOREShould contractors charge for estimates?

How to quote a price for a job

Each industry has a different standard for preparing quotes for services. For example, window cleaners quote by the number of window panes, and landscapers quote by the size of the property and materials.

But no matter what industry you work in, the process of how to quote a price comes down to the same five steps:

  1. Determine your pricing strategy and estimate the cost of the job
  2. Create the quote using a service quote template that includes your company details, branding, and has a professional design
  3. Clearly list pricing information for the service and demonstrate the value you are bringing to the client
  4. Email or text the quote to your client, providing an easy way for them to approve the quote electronically
  5. Send quote follow-ups to clients who don’t respond within a set period of time

For step one, if you don’t already have a solid pricing strategy, you’ll want to read our guide to different pricing strategies for service businesses.

Best practices for writing a winning price quote

Simply providing a price quote isn’t always enough to win a bid. Here are some of the ways you can improve your price quotes to turn leads into paying customers.

1. Be professional

Handwritten price quotes jotted down on a scrap of paper don’t give off a professional vibe to your customers. Use price quote management software to keep your quotes clean, clear, and consistent. Not only will these look better, but they’re also easier to create, track, store, and organize.

2. Send price quotes via email or text

Sending price quotes via email or text ensures they’re received quickly and that they don’t get lost in a pile of mail. Potential clients can easily refer back to them, forward them to others, and access them from anywhere.

This means that your quote will be available and accessible to them when they’re ready to make a decision.

3. Be timely

Send a price quote too late and you may miss out on a job. If this happens more than once, those lost jobs quickly add up. Ideally, you should send a price quote within 24 hours of visiting a job site. That way, the details are fresh in your mind and you’ll be keeping the lines of communication open with the client.

4. Send price quote follow-ups

If you send a price quote but don’t hear back from a potential client within one to three days, send a quote follow-up email. It could be that your first email was missed or that the client received it at a bad time. A little nudge will keep the project top of mind and encourage them to make a decision.

Write a price quote using a professional template

Professional price quotes should include a lot of different information, which can be hard to remember on the go. It’s even harder to make them look good. Instead of making one-off price quotes each time you generate a new lead, save time by using a professional price quote template.

Not only do they make your price quotes look professional and transparent, but they also ensure your prices accurately reflect the job you worked hard to earn.

This article was originally published February 2017. It was updated November 2021 for accuracy and to meet industry standards.

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