Let’s say that you’ve just hired yourself a contractor for a job that you want him or her to complete. You have already considered that there will be things such as materials and the cost of labor that will be added to the amount of compensation you will owe once the two of you have come to an agreement sample.
However, if you either of you have yet to sign a written agreement depicting that the job will take place, then you may ask for a document which provides you with an estimate of how much everything will cost. This document is what you would call an estimate and this article will teach you all that you need to know.
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What Is a Price Estimate?
Just to make it clear, a price estimate for a job is an educated guess as to how much it will cost. It’s not a guaranteed amount as it is subject to change at any given point in time. To account for possible unforeseen developments, one should provide several estimates based on various circumstances, and that includes any worst-case scenarios. This way, customers who avail the services of certain contractors won’t be surprised by the numbers they’re given if they agree to the job. You may also see free blank estimate templates.
Basically, the estimate gives customers an idea as to just how much they’ll be spending. The more estimates there are for different circumstances, then the better the customer will understand as to the different possibilities of how much he or she will owe. You may also see construction estimate templates.
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What Should be in an Estimate?
Whether you’re a freelancer or an independent contractor, you should know that learning how to create estimates will be crucial whenever you’re dealing with customers. If you want to give them just how much you think a particular job will cost, then there are certain things that you will need to do.
So here are the steps that will help you create a proper estimate:
1. Use an Official Letterhead
You must always assume that your competition has also reached out to your customers. In that case, you’ll want to have a letterhead for your estimates so that you can give them that professional and polished look. You want your estimates to stand out and differentiate you from the rest, so try to go with one that will go well with the kind of business you’re handling. You may also see free work estimate.
If you don’t yet have letterhead, you can create something basic on any word processing program. Make sure that it has all the information that one needs to learn about the type of business customers will be dealing with. You may also see contractor estimate templates.
Here’s a list of what it should contain:
- Your complete name
- The name of your business
- Contact details (phone number, email addresses, etc.)
- Website address, assuming that you have one
If you have a business logo, then you should definitely include that on the letterhead. This will helps every one of your estimates stand out even further and customers will easily be able to identify who they’re working with or who they want to work with because of it.
2. Make Sure It Has a Proper Title
If you’re sending the potential customer an estimate, it must be labeled clearly as such. This means that all you have to do is put in the word “estimate” along with any other appropriate description related to the job that you’re doing and place it at the very top of the page. Try to make the title stand out by giving it a larger text size for added emphasis. You may also see free roofing estimate templates.
You might also include a disclaimer immediately under the word to the effect that the actual final cost may be higher or lower than whatever has been placed. This way, the customers that avail your services won’t be shocked when they find out the final price. You may also see landscaping estimates.
3. Describe the Services You Will Provide
For an estimate, you don’t have to go into extensive detail about the services you will provide. However, you should give your customers a breakdown of what you will be doing so that they can understand the cost of each. You can group services into broad, general categories for an estimate. This can help you when you have to take a guess as to how much it will all cost without the need of you having to spend too much time on figures. The less time that you spend figuring out the estimate, the more you can spend it on working the job. You may also see job estimate templates in PDF.
4. Include Information on Your Licenses and Accreditation
If you’re an independent contractor sample, then you have to make sure that you follow the laws of your country or state which allow you to take on jobs. This means that you might be required to carry a professional license that will allow you to take on customers. Information about these should always be included in your estimate as to let your customers know that they’re dealing with someone who has been officially been recognized by the government.
Doing so will make your customers feel at ease whenever they decide to do business with you. Because even you wouldn’t want to work with someone who’s doing something illegally right? You may also see auto repair estimate templates.
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5. Provide Necessary Disclaimers
An estimate is never legally binding as it’s not the final price of the job. However, you will have to remind your customers that. Which is exactly why you have to add a disclaimer with every estimate that you end up making so that the customer is fully aware that the estimate is not the final price and it’s subject to change. You may also see cost estimate templates.
You can describe the factors that might contribute to a difference between the actual price and your estimate, but remember that you don’t necessarily have to do this. If you’re going to add any details which tells your customers about the reasons for the changes in price, then make sure that you make it easy to understand. Don’t get too long with the explanations and don’t use any jargon that nobody else would understand; keep it simple to ensure that everyone will get it the first time. You may also see estimate invoice templates.
6. Provide Alternate Estimates for Different Situations
In some cases, there may be significant factors that could possibly result in a tremendous difference in the final price. Whether it’s higher or lower than originally intended won’t matter as you will still need to point out all the possibilities to your customer. By knowing all of the different estimates, customers will have a rough idea as to the lowest and highest amount of payment they will owe you once the job has been completed. Also, it will help them make an informed decision. You may also see job estimate templates.
7. Proofread and Edit It
Before you hand the estimate over to your customer, you will have to go through it first. You want to make sure that you give them a document that has been polished and one that will give your business a positive image. Also, you don’t want to give them any wrong information and you want to make sure that everything that they’ll need to learn about the job estimate is all within the document. So go through it at least twice and fix any mistakes that you’ve noticed immediately. You may also see project estimates.
8. Sign and Date your Estimate
Before you hand over the estimate, you have to make sure that both the date in which the estimate was made and your signature is written on it. The reason as to why you need to include the date is because it can help you out in the event that there’s ever a need for you to prove when the estimate needed. This will especially be handy if the matter is brought up in court. You may also see sample project estimate templates.
As for why it will need your signature, it’s to prove to anyone who goes through the estimate that you were the person who is responsible for its creation. It basically makes it an official document that you can use in court as evidence should there be a need to. You may also see repair estimate templates.
Before you send the estimate over to the customer, you’ll want to make a copy of it that you’ll keep your personal records. You’ll never know when you might have to pull out information on whatever you’ve provided for a particular job and having a copy will definitely help make it easier for you. You may also see estimate templates in a word.
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Tips for Making Your Estimate
Now that you’ve learned what your estimate will need, the next step is for you to learn how you should go about in making it. There are so many things that you can do that can help you save time and make it easier for you to come up with the estimate that your customers will need to hear. You may also see landscaping estimate template.
So here are a couple of tips that should be able to help you out:
1. Go Over What Job Needs to be Done
Before you can even give any of your customers an estimate, you will first need to know exactly what they want you to provide them with. Which is why you will need to get a lot of information out of them. You’ll need to ask them a lot of questions as people are usually vague about what they want. Be sure that you asked them detailed questions to get everything that you need. You may also see sample estimate template.
You have to keep in mind that not every one of your customers will know exactly what should take place in every job. Most of them would just want to know how much they’ll be spending if they decide to avail your services. In many professions, this means you must actually visit the customer’s work site so that you can have a better understanding of what you’ll need and what you will have to provide. This then allows you to come up with different estimates as you already know what you will have to work with. You may also see repair estimate template.
2. Determine How Long the Job Will Take You
If you’re going to give a customer an estimate, then you only need to give him or her a rough ballpark. However, it’s important to be realistic in your assessment of the amount of time it will take you to complete whatever project you’ve been given as this can factor into just how much the customer will owe you once you’re done. You may also see free job estimate template.
If there will be outside work involved, you’ll need to make allowances for possible weather delays depending on the season that you’ll be doing the work in. So consider what transportation you might have to take, what you’ll need to prepare to push through certain issues and the possible amount of problematic encounters that could delay the job’s completion. You may also see project estimate template.
3. See If You’ll Need Help
There are some jobs where you know you won’t be able to tackle alone. This just means that you will need to hire others to help you out. If you already have a reliable crew that you normally work with, then this shouldn’t be much of an issue. However, if you typically work alone, you must assess the job realistically and decide whether you’ll have additional expenses for subcontractors or specialists. You may also see work estimate templates.
The date in which the customer would like the job to be completed in would also factor in just how many people the job will need. Because let’s say that an employee gives you a job that should be done around two weeks time. You’ve assessed that you can finish it alone within that time frame, but you’ll be cutting it too close. It’s situations such as this where you will have to deeply consider the thought of getting additional help. You may also see roofing estimate templates.
Remember that if you’re going to ask for extra help, then you’ll obviously have to pay these people for their time. You will have to come up with a fair amount of compensation based on what it is that they provide and the amount of time that they will be spent completing the project with you. Just make sure that you and the people you wish to hire as your sub-contractors can come into agreement and that you have a written document which proves that. You may also see free construction estimate.
4. Figure Out the Materials You Will Need
With every estimate you make, you should learn about what kind of materials you will need in order to fulfill the job that you’re tasked with. This means that you will have to look into the costs of these materials and place them all within the document. If there are certain materials or tools that you don’t even have, then you should do your research and find out how much it will cost you to purchase or rent them. You may also see cost estimate sample.
Purchasing new tools may be preferable if you anticipate you will need them for other jobs in the future. You typically can deduct these purchases as business expenses on your end. Keep in mind that if you decide to do that, then you can’t put it in the customer’s estimate. You may also see building contractor estimate.
Also, if you already have an understanding of the basic materials that you’ve frequently used on different jobs, then you should keep a list of their prices as a reference in the event that you’ll need them for future jobs. This can help save you so much time when calculating an estimate. You may also see sample estimate templates.
5. Understand Your Competition
If you want to stay ahead of your competition and make sure that people know they should come to you for certain jobs, then you should have an idea as to how much you estimate every order you consider to take. You want your estimate to be competitive, but at the same time, you want to make sure that you don’t charge so little to the point where you actually start losing money. To avoid that, all you have to do is find out just how much your competition charges for similar jobs and that should give you a rough idea as to how your estimates should go; remember that your estimates must allow you to gain money, but also make customers pick you over your competition. You may also see landscaping job estimate sample.
Keep in mind that “competitive” does not mean that you should aim to underbid the competition. You won’t make any money that way, and potential customers or clients may be suspicious if your estimate seems too low. Be confident with the quality and value of your work and the price that you’ve set. You may also see free job estimate template.
To find out what similar professionals in your area are charging, check listings on websites where professionals advertise and promote their services. Try to visit establishments that are within your area and ask around for prices. Just make sure that you do so in a discreet manner so that you won’t notify your competition. You may also see price quote templates.
6. Focus on the Customer’s Benefit
The customer typically isn’t interested in the exact process or things you need to do to achieve their objective. These people are only interested in you doing completing whatever job it is that they’ve asked you and that it’s done in a manner that’s satisfactory. Keep your language focused on the result, not the process. You may also see quote templates.
This is important when you have to describe the kind of work that has to be done in order to complete the job. Just make sure that you explain in a way that allows your customer to focus on the final product. You may also see best quotation templates.
7. Deliver Your Estimate as Soon as Possible
Every customer that will avail your service will want you to do the job sooner rather than later. By now, you should know that coming up with estimates will take up a lot of your time. Also, customers tend to take on contractors who can give them what they need to hear first. Which is exactly why you have to hand out your estimate as soon as possible. Just make sure that you don’t rush it to the point where you forget to include vital information or make mistakes that you shouldn’t. You may also see sample business quotations.
8. Schedule a Follow-Up
After you’ve delivered your estimate to the potential client, you may hear back from them immediately. However, if they have yet to contact you within 2 to 3 days, then you can call them to see if they have already come to a decision. Because if you just allow them to keep you waiting only for you to find out that they don’t want you for the job, then that time wasted could have been used to find other potential customers. You may also see painting estimate templates.
Keep in mind that often people who hire one contractor won’t bother to call any others and tell them they’ve decided to go with someone else. Which is why you will have to do a follow-up so that you won’t have to deal with customers who waste your time. You may also see building estimate templates.
If you would like to learn about the different estimates you can make or if you want to learn about other different business documents, then all you have to do is go to our site. Be sure that you go through the different articles thoroughly so that you can make effective use of whatever you have gathered. You may also see free construction estimate templates.