A quote is more than just a number; it’s the foundation of an agreement. If it’s off, you’re left with two bad options: revise the price and risk upsetting the customer, or absorb the loss. Even an honest mistake on a quote can cost you money and be a sour note when starting a business deal.
Accurate quoting protects your bottom line.
Let’s look at what tends to go wrong in the quoting process and how tightening things can make a big difference.
A good quote clearly outlines the project's scope and what the proposed price includes. Failing to do so makes the quote ambiguous and leaves the door open to contractor pricing errors and additional costs that might surprise the customer.
To assess the full scope of the project and quote, take the time to:
Do you have multiple estimators? It’s a common practice and a sound strategy for generating more leads.
Each estimator might use a different pricing model, leading to inconsistencies in your enterprise quoting process. The solution is to develop a centralized quoting process that gives all team members access to the same pricing data.
Data-driven quoting process optimization also prevents your team members from adjusting quotes based on a customer’s budget. It’s tempting to do it to secure a job, but these quotes won’t reflect your actual costs.
Prices for electrical, HVAC, and plumbing supplies have increased steadily since COVID-19, and recent tariffs will likely raise prices on essential products like copper wires and electrical panels.
One of the most common estimate mistakes for contractors is basing quotes on outdated prices, which can lead to costly adjustments.
Volatile prices are here to stay, and there is an easy fix with tech tools designed to help you track material prices in real time for more accurate quotes.
A contingency budget refers to money earmarked for unforeseen expenses. In the trades, these unexpected costs can stem from:
To accurately budget these costs, rely on historical data for similar projects.
Always check product availability before quoting. Availability and lead times are ongoing challenges for electrical and HVAC supplies, and finding that the part you need for a job is out of stock can lead to additional costs.
Consider the following strategies to better align with supplier lead times:
In light of supply chain disruptions contributing to longer lead times, it can pay to diversify and work with multiple vendors who can step up if you’re having trouble sourcing a specific product.
Labor costs vary seasonally, especially if you rely on subcontractors for bigger projects. Staffing a whole crew during the peak demand season can cost much more than usual.
When putting together a quote, review your historical data to determine how your current workload and labor expenses might affect the project's cost.
Preparing a quote can be lengthy, given the wide range of costs to consider. As discussed above, the advantage of creating a centralized and well-documented quoting process is that you’ll be more consistent with the scope of your quotes.
When developing this process, make sure to account for these often-overlooked costs:
The Raiven Marketplace offers several benefits when it comes to creating better quotes:
There are many other perks to explore:
Raiven is on a mission to transform buying for the trades. Our innovative platform connects contractors, enterprises, and suppliers into a digital supply chain network.
The goal is to simplify sourcing, reduce costs, and unlock operational efficiency. New business opportunities become available, and you can scale faster.
Stop wasting time and money on inefficient procurement! Visit Raiven for more information or contact us if you have any questions.