how to build a quote
How to Build a Quote: A Beginner's Step-by-Step Guide for Tradespeople
Right then, let's talk about building a quote from scratch. When I started out 15 years ago, I'll be honest, my 'quotes' were a number in my head and a bit of hope. That's no way to run a business, and it's a fast track to working hard for very little. A proper quote protects you and the customer both, and it makes you look like someone who knows what they're doing.
This is a beginner's walkthrough of how to build a quote that's accurate, profitable and clear. We'll go step by step, from working out the scope right through to presenting it nicely. Follow this and you'll stop leaving money on the table.
Step 1: Nail down the scope
Before a single price goes on paper, you need to know exactly what you're being asked to do. This is where most jobs go wrong, and it's where you protect your margin. Walk the job, ask questions, and write down what's included and just as importantly what isn't.
Get clear on things like:
- Exactly what work is being done, room by room or item by item
- What the customer is supplying versus what you'll provide
- Access, parking, and whether the power's on
- Anything that's an unknown until you open things up
- What's explicitly excluded, so there's no argument later
A clear scope is the backbone of the whole quote. If you're vague here, you'll end up doing extra work for free, and there's no quicker way to a loss.
Step 2: Price your labour properly
Labour is your time, and your time is worth money, so don't undersell it. Work out roughly how many hours or days the job will take, then multiply by your day rate. If you're not sure what your day rate should be, work backwards from what you need to earn in a year, including holidays and quiet weeks, not just what the bloke down the road charges.
Be honest with yourself on time. Beginners almost always underestimate. Add in the fiddly bits: setting up, clearing away, trips to the merchant, testing and paperwork. If a job feels like two days, it's often nearer three once you count everything. Quote for the real time, not the dream time.
Step 3: Price materials with a sensible markup
List out your materials and price them up properly, ideally from your actual merchant prices rather than guesswork. Then here's the bit beginners often miss: you add a markup on top. That's not being greedy, it's standard practice and it covers the time you spend sourcing, collecting, storing and warrantying those materials.
A markup of somewhere around 10 to 20 percent on materials is common, though it varies by trade and job. To keep it simple, if a consumer unit costs you 80 quid and you mark it up 15 percent, you charge 92. That covers your trip to pick it up and the fact that you're the one on the hook if it's faulty. Use whatever figure makes sense for you, just don't pass materials on at cost and call it generosity, because all you're doing is working for nothing.
Step 4: Add overheads and a bit of contingency
Your day rate needs to cover more than the hours on site. Running a trade business has costs that quietly eat your money if you ignore them: van, fuel, tools, insurance, phone, accountant, scheme membership. These overheads should be baked into your pricing, either in your day rate or as a sensible allowance on the job.
It's also wise to add a small contingency on bigger or older jobs, because something usually crops up once you start opening walls and lifting floors. A modest buffer means a nasty surprise doesn't wipe out your profit. Don't go mad and price yourself out, but a little headroom on an unpredictable job is just common sense.
Step 5: Handle VAT correctly
VAT trips up a lot of newcomers, so let's keep it straight. You only charge VAT if you're VAT registered. You must register once your turnover goes over the threshold, but plenty of smaller traders aren't registered and don't charge it at all.
If you are registered, VAT (20 percent on most domestic electrical work) goes on top of your net price, and you should show it as a separate line so the customer can see what's the work and what's the tax. One more thing worth knowing: if you're doing subcontract work for another contractor, the Construction Industry Scheme (CIS) and the VAT reverse charge can come into play, where the main contractor handles the VAT instead of you. If you're subbing, have a word with your accountant so you get it right from day one.
Step 6: Set out your payment terms
A quote isn't just prices, it's the deal. Spell out how and when you want paying so there's no awkwardness later. On anything sizeable, it's perfectly normal to take a deposit up front to cover materials, with stage payments on longer jobs and the balance on completion.
Put it in plain English on the quote: the deposit amount, what each payment covers, when it's due, and how you'd like to be paid. Also state how long the quote is valid for, say 30 days, because material prices move and you don't want someone accepting a six-month-old quote at last year's copper price.
Step 7: Present it like a professional
Last step, and it matters more than people think. The exact same prices land completely differently depending on how the quote looks. A tidy, itemised, branded document with your details and scheme number says you're organised and reliable before they've even read the figures.
You don't need to be a whizz with spreadsheets to manage this. These days you can talk through a job or snap a photo and have an app like Quotato build the itemised quote for you, VAT and all, with an accept-online page so the customer can confirm in a tap. However you do it, the goal's the same: clear, professional, and easy to say yes to.
And that's the lot. Scope it properly, price your time and materials with a fair markup, cover your overheads, get the VAT right, set clear terms, and present it tidy. Do that and you'll quote with confidence and actually make a living from the work. Fair play to you for learning it properly, mind, plenty never bother. Give us a shout if you get stuck.