Estimates, Quotes and Proposals: Which One to Send

The short version

• An estimate is a considered guess. A quote is a commitment. Do not use the words interchangeably.
• A proposal sells the approach, not just the number.
• Whatever you send, the scope and the exclusions are what protect you.
• Expiry dates keep old numbers from coming back to haunt you.

Owners use these three words as if they were synonyms. Customers do not. A customer who receives something labeled a quote generally believes the price is fixed, and if you meant it as a rough number you have just created a dispute that will surface on the last day of the job.

The distinction is worth getting right because it determines who carries the risk.

An estimate is a considered guess

An estimate says this is what similar work usually costs, based on what I can see today. It is appropriate when the scope genuinely cannot be pinned down, such as repairs behind finished surfaces or work that depends on what you find once you open something up.

If you send an estimate, say clearly that it is an estimate, explain what could change the number, and describe how you will communicate a change before doing the work.

A quote is a commitment

A quote says this is the price for this defined scope. You are on the hook for it. That is a good thing when you know the work, because it is much easier for a customer to say yes to a fixed number than to an open one.

The protection in a quote is not a disclaimer. It is the scope. A tightly written scope means you can honor the price with confidence, because everything outside the scope is a separate conversation.

A proposal sells the approach

A proposal is what you send when the customer is choosing between approaches, not just between prices. It describes what you will do, why you recommend it, what the alternatives are, and what each one costs.

On larger jobs, the proposal is often what wins the work. Two contractors quoting the same number look identical. The one who explained the decision looks like the one who understands the job. It also gives the customer a way to spend more without feeling sold to, because a better option is on the page next to the cheaper one and the tradeoff is described rather than implied.

• Estimate: unknown scope, price may move, change process explained
• Quote: defined scope, fixed price, exclusions written down
• Proposal: several approaches compared, recommendation stated

Choosing the right document

| Document | Scope certainty | Who carries the risk | | --- | --- | --- | | Estimate | Low, conditions unknown | The customer | | Quote | High, scope is written down | You | | Proposal | Varies, approach is being chosen | Depends on which option is selected |

Exclusions are the most valuable paragraph

Whatever you send, the exclusions carry the weight. Permits not included. Disposal of existing material not included. Repair of concealed damage not included. Customer supplied materials not warranted.

Every exclusion is a dispute you will not have. Build a standard list for your trade, keep it short and readable, and add the one or two specific to each job.

Put an expiry date on it

Prices move. A number you sent five months ago should not be binding today, and without an expiry date a customer can reasonably expect it to be.

Thirty days is a common window and it is easy to justify. It also creates a mild, honest reason to follow up, which is useful on a quote that has gone quiet.

Do this before your next job

Fix your vocabulary and your exclusions in the same sitting.

1. Decide which of the three documents each of your common job types deserves.
2. Stop using the word quote for anything where the scope is genuinely unknown.
3. Write a standard exclusion list for your trade and paste it into every document.
4. Add a thirty day expiry to every priced document you send.
5. Make sure every approval is recorded with a timestamp you can produce months later.

Common questions

Can an estimate become a quote?

Yes, and that is a good sequence. Estimate to get in the door, investigate, then quote the defined work once you can see it.

Do I need a signature?

You need a recorded approval. A signature is one form. A timestamped digital acceptance is another and it is usually easier to produce later.

How detailed should the scope be?

Detailed enough that a stranger could read it and tell whether a given task is included. That is the test that matters when there is a disagreement.

What if the customer asks for a ballpark on the phone?

Give a range and say plainly it is a range, then offer to look. Be consistent, because a number said out loud will be remembered as a promise.

Keep reading

• What Goes on a Service Invoice
• Change Orders That Actually Stick
• Invoicerus for painters
• Invoicerus for remodeling contractors

Try it on your next job

Open the job price calculator and run one real job through it. No account, no card, nothing to install. If it saves you time, the free invoice generator is the next one to try.

Invoicerus does the same work on autopilot once your services and prices are set up. Start free and bring one week of jobs with you.