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Let us explore the differences between quotations and estimates and how decide which to use and when.

Most service businesses cannot give fixed, standard prices because every project is different. The scale, the skills required, time taken to do it and the materials required varies for each job and project.
Where no two jobs are exactly the same, it’s not always possible to work from a standard price list and so you have to give a quotation or an estimate instead for the cost of supply and service.

The main difference between a quotation and an estimate

A quotation is an agreed fixed price for the project. It may have some caveats to cover unforeseen circumstances but most likely this is the price the client will pay at the end of the job.
An estimate, on the other hand, is an approximate price that may change. That might be because there are just too many variables, because the project is highly skilled and undertaken on a time basis (such as a restoration) or because it is given without having access to all the information.

The cost of producing a quote an estimate for the business

Fixed price quotes are complicated and time-consuming to build. That makes them expensive for a business to create as you are committing to a fixed price and you must be careful to account for everything. You need to work out how long it will take so you can price your labour and then list everything you will do and probably highlight what you won’t be doing to avoid any disputes about what work is and is not included in your overall price.

An estimate is much quicker. You just need ballpark figures and that can easily be entered into a template. These are cheap to produce for a business.

When to give the client an estimate or a quote

Because of the cost and the time taken to produce a quote, it makes sense to give your potential client an estimate in the first instance. Firstly, you need to gauge whether they are going to purchase from you and if they have the budget for the service they require.

Once you have an agreement in principal from them, you can make an investment in time and resources to perhaps visit them to build them a formal, fixed price quote. Because from a business perspective that’s exactly what it is – an investment in time and money to accumulate a new client.

Of course, you can use FloQuote to get that initial estimate to the potential client, utilizing its easy to use message aggregator features.