Create a Quote in 8 Simple Steps: A Guide for Small Businesses
A quote (or “quotation”) is usually a document that includes a fixed price for a job. It can also be verbal. A quotation is sent from a supplier to a potential buyer.
Writing winning quotes for jobs is important, as this generates new business and helps your company grow, according to Business Queensland.
The below article covers how a small business can create a quote in eight simple steps.
In this article, we’ll cover:
- Select a Template
- Add Client Information
- Enter the Quote Number
- Include a Date of Issue
- Enter Products or Services
- Add Terms and Conditions
- Include Notes
- Add Optional Details
1. Select a Template
Creating winning quotes is a learning process. It helps to use a standard quote format so you can create professional-looking, comprehensive and detailed quotes that clients will love.
You can also customize your template and make it even more professional by adding your company letterhead or logo, according to Business Queensland.
There are many price quote templates available. This article has free quotation templates for Word, Excel, PDF and Google Docs.
The below price quote template for photography has some of the basic elements we’ll explore in the following steps:
Many companies also use accounting or bookkeeping software to generate their quotes.
Estimates are very similar to quotations except the price is approximate, not fixed. FreshBooks has online estimating software that makes it simple to generate an estimate in the cloud and send it to your client.
First, you select the estimate function:
Then you customize the FreshBooks template:
Then go ahead and share the estimate via email with your client. They can approve it automatically.
2. Add Client Information
Make sure you include who the quote is for. Include information such as:
- Business name
- Phone number
- Fax number (if applicable)
- Email address
- Contact name and title
And don’t forget your contact information. That said, if you use company letterhead, you may not need to include it.
3. Enter the Quote Number
Accounting software automatically generates a quote number for you, adding increments of one to each new quote. However, you should be able to edit the quote number if you like. If you’re using a template in Word or such, you can start with “1” and go from there.
4. Include a Date of Issue
This is the date you send the quote to the client. A date of issue is important because quotes are usually limited time offers. You will probably want to add: “Valid for 30 days.” Or you can extend or decrease the timeline, as desired.
5. Enter Products or Services
Add the products and/or services you’re quoting as line items. Include a description of the items as well as quantities, product number, unit price and total price per item (if applicable).
You can also divide up the products and services according to different project stages. You may want to separate labor and materials costs. A quotation template specific to your industry will help you organize your cost breakdown.
Note anything that is not included in the project. For example, a contractor may charge for the labour required to install kitchen cabinets but not include picking up the cabinets from the store (which the homeowner can choose to do, instead).
Total up all the costs to find your subtotal. Then add tax, if applicable, for the grand total.
6. Add Terms and Conditions
Here’s where you account for any possible variations in the project. For example, you might note that the project timeline for landscaping a backyard depends on having good weather.
A small business can also explain how much additional work will cost. For example, they might note any additional work will cost $50 per hour. Explain under what conditions additional work might be required, since a quote is supposed to be a fixed price.
Also include how you want to be paid and when. Do you prefer a check or direct deposit? Do you accept credit cards? Will you bill a lump sum upon completion? Do you expect a deposit? Do you want half up front and half on completion? Include these details in your payment terms.
7. Include Notes
This section is for any other details you want to include. Notes is a good place to detail timelines and expected completion date. You can also summarize the project scope. It’s also professional to thank your client for the opportunity to quote and express that you’re looking forward to working with them.
8. Add Optional Details
The following information isn’t required for your quotation, but it can be a good idea. Here are some elements you can consider adding to your quotes:
- Purchase order number (from client)
- A discount
- Business number (EIN)
- Sales tax number (get yours here)
- Signature section
For example, the below quotation has a place for the client and business to sign to indicate their acceptance of the quote. It also includes a discount.
Now, check your spelling and grammar! Then check that all the math is right. Now you can send your quote to your client, confidant that you’ve made a detailed, thought-out quote that will impress its recipient.
People also ask:
How to Request a Quote
A small business might request a quote if they need to hire a subcontractor or specialist for a job that goes beyond their field of practice. They can send a “request for quote letter” to one or multiple vendors, who send them back price quotes.
A request for quote letter should be clear and concise and mention what date you want the quote. Include the quantity of products you intend to order. For services, specify which ones you’re interested in.
Here are some samples of requests for quotes:
- This template, available in Excel or Word, allows for detailed requirements
- Letters.org has formal letter or informal email templates that you can copy and paste
- Or download templates in Word or PDF formats from Letters.org
Below is an example of a request for quote letter. It includes the date, business information, contact information and requests for details such as what taxes apply, delivery timeline, terms of payment and that all prices should be firm.
How To Decline a Quote
Received a price quote and it wasn’t to your liking? Perhaps the price was too high or you decided to go with another company.
Still, it’s important to reply since the company took the time to prepare the quote. Thank them for their submission and explain why you aren’t accepting their quote.
Here’s a quotation rejection template from Best Sample Letters you can copy, paste and revise:
1234, Main Street
Boston, MA 02123
<Recipient Address Goes Here>
Thank you for submitting a <quotation/bid/proposal> on <name of project>. We’re sorry to inform you that we have decided to go with someone else this time.
We appreciate the time it took for you to submit a <quotation/bid/proposal> and will keep you in mind for the future.