Many businesses, especially startup ones, use a standardized price list for the products and services they sell which remains the same for every client or customer. Some larger and more complex jobs are often priced based on a detailed document the customer submits. Then others such as freelance artists, writers, painters, and decorators tend to provide prices that are tailored for the specific products or service a customer requires or wants to get which is usually done through a price quotation.
The price you charge for your product or service is one of the most important decisions you make as a businessman. Too high and the customer will go running scared or accuse you of overpricing. Too low and you don’t get half the profit your goods or service deserve plus you don’t get any returns for overhead costs, thereby stunting your business growth way before it had hit the ground running, so make sure your quotation has the following elements:
1. Business Information: Providing your company name, address and contact details is a legal requirement. It’s also important to have it included when creating a quote. Another great idea would be to place your price quote in the company’s letterhead if you have one filed.
2. Products and Services: This can be divided into different sections or columns. For example, the first section can be for the quantity and the second part can be for the service or item description. The third section should then be for the unit price with the fourth and final sections for the project’s total price or the line item. For products quotation, further, check for the following:
3. Variations: Discuss how different situations can affect the product or service cost. For instance, you can explain that for a lawn mowing service the price covers lawn mowing only and that clipping will cost an additional 20%. Putting variations on your quote can also be a great way to upsell.
4. Total Cost: Be as detailed as you can in providing the specifics of the job and map out what the pricing covers, emphasizing what isn’t covered if necessary. For instance, total cost covers labor excluding shipment and delivery.
If you’re starting a business, carefully consider your pricing strategy before you start. Established businesses can improve their profitability by regularly reviewing their pricing and that of the competition. At worst, incorrect quoting could cause serious problems for your sales and cash flow. Here are some steps you can follow to create a quotation that would help your business grow:
1. Check what needs to be done: Do your legwork and review what the customer or client needs because you can’t just submit a quote as a response to a quote request without having any idea of what they want or expect from you in terms of goods or services that you can provide. Customers are also confused about the difference between what they want and what they need since they don’t exactly know the process involved in finishing a project or job, which means you may have to do some job site visits to properly make an assessment before you begin quoting.
2. Get it in writing: From the customer’s point of view, a quote gives them something on record as they call and require a few services or certain goods from different businesses to compare rates. It is therefore important to have a well-prepared quotation in writing which you can email or send by mail to your client rather than simply giving them a dollar amount via text message or over the phone. A written quote also adds a professional flair to your business and makes it a lot easier as a reference for calculating the cost of the product and service the customer needs.
3. Figure out how long the job will take: In some cases, a quotation template may not be a legally binding document and maybe all your customer requires is a good figure and breakdown of the cost of the service or product they want to get, but it is still important to have a realistic assessment of how long the project or job will take to make sure it is feasible. It is also what eventually determines the figure you provide to your client.
4. Include an estimate: You may have to identify the tools you need in completing a service. In this case, an estimate is your best chance at giving a ballpark figure coinciding with your actual quote especially if the task needs materials which don’t cover the service required. Find out how much renting equipment or purchasing materials would require and provide an estimate.
Knowing the total price of the service alone doesn’t provide the information that the customer needs. In order to properly answer their questions, preparing a quote is the best practice a business can apply. Follow these tips to make sure your quotation helps your business grow and build trust with your customer base:
The different price quotations are usually based on the goods, the type of service including the delivery:
Simply put, a quote is a breakdown of the individual charges that are added together to create the total cost of a job, and a quote cannot change once agreed upon between the service provider and the customer.
Knowing the difference between cost and value in business increases your chances of gaining profit, where the cost of your product or service is the amount you spend to produce it. The price is your financial reward for providing the product or service. The value is what your customer believes the product or service is worth to them.
Spending time and effort to research and know everything that an accurate quote requires makes a business owner more efficient in managing his job. A well-prepared quotation that covers the cost of your products or service in full, is an essential part of customer satisfaction and it’s also one of the best business practices.
Knowing how to write a quote and knowing when and how to update it to cater to the different needs of your customer base is one of the many ways in which your business can grow and achieve its potential. It’s also a great opportunity for you to learn more as a businessman especially if you’re determined to succeed, grow and survive even the toughest competition.