quote vs estimate
Quote vs Estimate: What's the Difference and When to Use Each
Right then, this is one I get asked about all the time, usually by lads just starting out on their own. What's the actual difference between a quote and an estimate? People chuck the two words about like they mean the same thing, but to my mind they really don't, and getting it wrong can cost you proper money or land you in a row with a customer.
Over fifteen-odd years and hundreds of jobs, I've learned that the word you put at the top of that bit of paper matters just as much as the number underneath it. So let's sort it out once and for all.
The short version: fixed vs best guess
A quote is a fixed, binding price. Once the customer accepts it, that's the figure you've agreed to do the work for, full stop. If you've underpriced it, that's on you, not them. A quote is a promise.
An estimate is your best honest guess at what the job will likely cost. It's not binding in the same way. The final bill can come in higher or lower depending on what you find once you're cracking on. An estimate is more of a steer than a promise.
No two ways about it, that difference is the whole game. One locks your price in, the other leaves you room to move.
The legal and contractual side in the UK
This isn't just trade chat, it carries real weight. When a customer accepts a quote, you've effectively formed a contract at that price. If you then try to charge a load more without good reason, you're on shaky ground and a customer would be well within their rights to push back.
An estimate gives you a bit more flexibility, but it doesn't mean you can pluck a low number out of the air and then triple it. The expectation is that a final bill stays reasonably close to a genuine estimate. If it's going to run well over, you tell the customer before you carry on, not after. Spring a nasty surprise on someone and you'll deserve the earache you get.
- A quote: a fixed price the customer can rely on once accepted
- An estimate: an approximate figure that can change as the job unfolds
- Either way, if VAT applies, state clearly whether your figure includes or excludes it
- Keep a paper trail. A clear written document beats a vague phone chat every single time
When to use each
Use a quote when you can see the full scope and price it with confidence. Swapping a consumer unit, a known number of sockets, a straightforward rewire of a room you've already had a proper look at, that sort of thing. If you can measure it and you know what's behind the walls, quote it.
Use an estimate when there are real unknowns. Old properties where you can't see what's lurking under the floorboards, jobs where the customer is still making their mind up on fittings, or work that depends on another trade finishing first. Fair play to anyone who'd rather give an honest estimate than a confident quote they can't actually stand behind.
Label it clearly and word it right
Here's where a lot of folk trip up. They write a number on a scrap of paper, call it nothing in particular, and then argue about it later. Don't do that. Put the word QUOTE or ESTIMATE at the top in plain sight so there's no confusion about which one it is.
On a quote, I'll state how long the price holds for, say 30 days, because material prices move and you don't want to be honouring last spring's copper price. I'll also note that anything outside the agreed scope gets priced separately as a variation. On an estimate, I'll spell out that it's an approximate figure and list what might change it.
- Mark the document clearly as a quote or an estimate
- On a quote, add how long it's valid for
- State whether VAT is included or excluded, and your VAT number if registered
- Note that extra work outside the agreed scope is charged on top
- If you take a deposit, say how much and when the balance is due
Get the wording tidy and you save yourself no end of grief. This is exactly the sort of thing I let Quotato handle these days, so every document goes out properly labelled with the right terms on it, rather than me scribbling on the back of a delivery note. Whether you do it by hand or by app though, just be clear about which one you're giving. Use a bit of common sense on that and you'll rarely go wrong.