Quoting a job properly, and what it costs when you don't

Quoting is the part of a trade business that happens at 9pm, on the couch, on a phone, after a 10-hour day. It's also the single decision that sets whether the next 3 weeks of work is worth doing. That combination is why so much money leaks out of otherwise well-run trade businesses, and it's the first thing worth fixing in the broader guide to growing a trade business in Adelaide.

The good news is that quoting is a process problem, not a talent problem. Owners who quote well aren't better at guessing. They've just stopped guessing.

A quote is an offer, not a guess

Plenty of trade disputes start because the 2 parties thought they were talking about different documents.

An estimate is your most informed read on what a job will cost, given incomplete information. It moves. A quote is a fixed offer to do defined work for a defined price. Once the customer accepts it, that's the deal, and every hour you spend beyond it comes out of your margin rather than theirs.

So the first discipline is to know which one you're issuing and to label it that way on the document. The second is to stop issuing quotes for work you haven't scoped, which is where most of the damage originates.

Scope it before you price it

You can't price what you haven't defined. Before a number goes anywhere near the page, you need 6 things.

1. What's actually being done, in enough detail that a stranger could read it and know when the job is finished.
2. Site access and conditions. Parking, stairs, distance from the truck, working around a tenant, a dog, a gate that's locked at 3pm.
3. What the existing condition is. The thing behind the wall, under the slab, in the roof space. If you haven't looked, say so in writing.
4. Who supplies what. Materials, fittings, waste removal, scaffold, traffic control, the skip.
5. Sequencing and other trades. Whether you're waiting on somebody, and what it costs you if they're late.
6. The decision-maker. Who signs off, and whether they're the person you've been talking to.

Half a day spent scoping properly is cheaper than a fortnight of arguing about what was included. If the job is large enough, charge for the scoping visit and credit it against the job when it converts. That single change filters out a surprising amount of tyre-kicking.

The structure of a quote that holds up

A trade quote that survives contact with a difficult customer has 7 parts, and 4 of them are the ones people skip.

• A clear description of the work, written in the customer's language, not trade shorthand.
• The price, stated as excluding or including GST so there's no ambiguity later.
• Inclusions. What the number covers.
• Exclusions. What it doesn't. This is the part that saves you.
• Assumptions. The conditions the price depends on, such as clear access, existing wiring being serviceable, or no asbestos present.
• Payment terms. Deposit, progress claims, final payment, and the number of days.
• Validity period. How long the price holds. 14 to 30 days is common while material prices are moving.

The price itself should come out of a calculation, not a feeling. That calculation is the subject of what a tradie should charge per hour, and it's worth doing once properly rather than re-guessing on every job.

Exclusions are the cheapest insurance you'll ever write

The typical trade quote lists what's included and stops. The trouble is that customers don't read an inclusions list as a boundary, they read it as a summary. Anything not mentioned gets assumed in.

Exclusions are what turn a summary into a boundary. They're 3 or 4 lines and they cost nothing:

Excludes: making good to painted surfaces, removal of existing floor coverings, any work required to bring existing wiring to current standards, disposal of hazardous material.

Then pair the exclusions with a variation clause in plain words. Something like: work outside this scope is quoted separately and started only once you've approved it in writing. Not because you intend to be difficult, but because the alternative is you doing $2,000 of unbilled extras (ex GST) and finding out at invoice time that the customer never agreed to them.

The other habit worth building: raise the variation the day it appears, not at the end. A $400 variation (ex GST) discussed on the spot is an ordinary conversation. The same $400 on the final invoice is a dispute.

The ballpark question, and how to answer it

Every tradie gets asked for a rough number on the phone before anyone has seen anything. Refusing outright loses jobs. Answering carelessly sets an anchor you'll spend the rest of the job fighting.

The workable middle is a range, with the reason for the range attached, and a clear statement that it isn't a quote.

For a job like that I'd usually be in the $3,500 to $6,000 range, ex GST, depending on what's behind the wall and how the existing plumbing is set up. I'd need 20 minutes on site to give you a fixed price.

That does 3 things at once. It respects the customer's time, it makes the site visit the obvious next step, and it tells them in advance that the number moves with conditions they can't see either.

What it must never be is a single figure. A caller who hears "about $4,000" has heard $4,000, and every dollar above it feels to them like you've changed your mind.

The cheapest quote in the pile

There's a persistent belief in the trades that the low quote wins. Sometimes it does. What it wins is the customer who chose on price alone, which is also the customer most likely to argue about a variation, slowest to pay, and least interested in the standard of the work.

Being the cheapest is a position that has to be defended on every job forever, using money that would otherwise be yours. It's also the easiest position for a competitor to take off you, because anyone can drop a price.

The alternative isn't being expensive. It's being specific. A quote that explains what the customer is getting, what could change the price, and how the job will run does more to win work than a discount does, and it does it without taking anything off the bottom line. If the competing quotes a homeowner is holding are a single line and a number, a document that answers their questions before they ask them is not a hard bar to clear.

Quote, then find out whether you were right

The last step is the one almost nobody does. Once the job is finished, put the actual hours, materials and disposal against what you quoted, and look at the gap.

Do that on 10 jobs and you'll stop needing anyone's opinion about your pricing, because you'll have your own data. That practice is job costing, and it's a different discipline from quoting: quoting predicts, costing verifies, and a business that only ever does the first half never finds out which of its job types are carrying the rest.

It also feeds directly into cash. Underquoted jobs don't just reduce profit, they consume working capital while you finish them, which is a big part of why builders run out of cash on a full order book.

What to change this week. Pick 1. Add an exclusions block to your quote template. Set a validity period. Start recording actual hours against 1 job type. Charge for the scoping visit on anything above a threshold you choose.

Quoting doesn't improve because you decide to try harder at it. It improves because the template changes, and the template then does the remembering for you at 9pm when you're too tired to.