A business quote, sales quote, quotation, or simply a quote is a vital document required to close a business deal successfully. This document lists the price list you, as a seller, propose to your prospective customer.
A business quote serves as a contract and usually uses a more formal tone.
The final pricing of the new quote document may include additional cost details such as the taxes, labor, raw material total costs, and other factors.
A business quote also includes:
- The duration for which it is valid
- The expected duration of service completion
- The goods delivery
A quote is usually confused with a proposal or an estimate. While these three documents can be used for the same purposes, they still differ in several aspects. We talk about those differences here.
What exactly is a quotation?
A pricing quote, service quote, sales quote, or any other type of quote is an agreement between a consumer and a service business to offer a service at a pre-determined price and within a specific time frame. A quotation is designed to fit both client needs and the business owners providing the service required.
The quote depicts a breakdown of the numerous costs that are combined together to get the final, total cost of a job. Once a quote has been agreed upon between the service provider and the consumer, it cannot be changed unless both parties agree in writing.
Lawn care, landscaping, HVAC, cleaning, and general contracting estimates differ from quotes for items. Comparing services is frequently more complex than comparing products because total costs differ from one company to another.
A business quote is frequently the first impression clients make of your company name; therefore, a quotation is an important step toward getting a contract. That’s why putting together a professional quote that explains the value of what you’re charging for is critical to landing more (and bigger) jobs.
How important is a quotation in business?
As prices for commodities are often fixed, you may wonder why there is a need for business quotes at all. Well, with fixed prices, businesses usually create an invoice to deliver the information.
However, in cases where the prices vary or depend on certain conditions, service quotes are generated before the order is confirmed. Essentially, quotes serve a similar, but not the same, purpose as an invoice.
Being sent before the invoice, business quotes shape the first point of business contact with the client. A well-prepared quote can help turn a prospective client into a real customer.
In that sense, business quotes need to meet certain standards as they add substantial value to the future relationship with the client.
What’s the difference between a quote and an invoice?
A quote is a document sent to a potential buyer before the work is done. The document informs them of the price they’ll pay for the selected goods and services provided.
An invoice is a financial document that requests payment when work has been finished or a pre-determined progress milestone has been met.
An invoice also shows the dates when a set of services or a product was finished, as well as the exact amount owed by your client for each line item and the total amount owed for all items.
How to draft the proper quotation?
In the 2022 competitive market, small businesses and large companies alike target the same cohort of audiences, making competition fiercer.
“It’s time to stop manual data entry, so you can focus on crushing your quota.”PandaDoc
Today, there’s no time to dwell on things; instead, the moment an opportunity presents itself, you react.
Immediately upon receiving a request for a quote, start drafting it according to your brand guidelines and your customer’s requirements.
The best start of drafting a business quote is to research the customer’s requirements.
To win them over, always use the client’s RFQ for more details, and take their demands into consideration.
You can also rely on your previous, successful quotes for inspiration.
How to write a quote for business that attracts customers?
The objective of a business quote is to motivate your customers to choose your offer over others and seal the deal.
1) Choose a professional quote template
One of the first stages in establishing trust with your clients is to create a professional quote layout and design. Your clientele will notice that you’re running a professional firm if you use a digital, easily replicable template.
At the top of the page, your quote template should have your company name and/or logo, which should be left-aligned.
It would help if you also put the term “quote” upfront at the top of your page so that it’s clear what the paper is about right away.
2) Enter your quote number
A quotation number is a unique, sequential number you assign to each of the quotes you send to clients, similar to an invoice number.
Quote numbers make it simple to keep track of and arrange your quotes in your CRM.
Your quotation number should be prominently displayed at the top of your estimate for easy identification.
Here are a few other things you should be aware of:
- Quotes can be alphanumeric, which means they can contain both letters and digits (no special characters or symbols).
- Depending on how you structure your quotes, they are usually between 3-5 numbers long.
- Add a client’s name or initials if desired.
3) Add customer information
Customer details are a must of every quotation. Fill out the quote with your customer’s details to enable easier follow-up.
This part of your quotation contains information such as their name and address.
You can also provide their phone number or email address.
4) Add product or service descriptions
As line items, list the products and/or services you’re quoting. Include a description of the items and their quantities, product numbers, unit prices, and total prices (if applicable).
You can also categorize the products and services based on the stage of the project.
You might want to keep labor and material prices and payment terms separate.
You can structure your cost breakdown with the help of a quotation template tailored to your industry.
PandaDoc offers a variety of sample quotations in various formats, allowing you to pick the one that best suits your needs.
To find the best quotation format for you, go through our template gallery.
5) Add your business and contact information
Make your contact information clear, accurate, and easy to find on your quote. If your client has any questions, they should be able to get your contact information quickly.
This information should include your:
- Business name and logo
- Phone number
- Email address
- Fax number, if applicable
6) Include the issue date
The day you sent your quote to the client is the date of issue. This is crucial since it will prove when the quote was sent.
A deadline for how long the quote is valid should also be included. Supplier prices, seasonal demand, and staff availability all change over time, and so do your prices.
Ensure the quote has an expiry date to ensure an accurate and profitable price.
It takes 14 to 30 days on average, with 30 days being the most typical timeframe.
7) Specify the terms and conditions of your quote
This is where you spell out your and your customer’s responsibilities. Without terms and conditions, a quote is incomplete.
A precise estimate disclaimer helps you avoid client disagreements and establishes expectations from the beginning.
The following are examples of quote terms and conditions:
Term of payment
This can contain things like a deposit that needs to be paid up in advance, different payment methods you accept (check or credit card), a time period you anticipate to be paid.
Costs of additional work
If the project requires any further work, you can safeguard your company from not being paid by putting additional work fees in your terms and conditions.
A contractor may, for example, charge for some deliverables, but not for others.
For instance, they’ll have a fixed price for the labor required to install kitchen cabinets but not for the cost of picking up the cabinets from the store (which the homeowner can choose to do instead).
Changes to the project that were not anticipated
This is especially crucial for firms that operate outdoors and rely on favorable weather to complete their tasks.
To find your subtotal, add up all of the expenditures. Then, if applicable, add the tax to get the total.
8) Include notes and/or additional details
After you’ve added the necessary information, make any additional comments, such as:
- Any potential price reduction (i.e. if you are applying a seasonal or referral discount)
- A section for signatures
- Purchase order number (from the client)
- A discount (if any)
- A note expressing gratitude for their collaboration
A great rule of thumb is to send a quote as soon as possible or as soon as the client contacts you to request one — ideally, within 24 hours of the initial contact.
Also, always double-check that everything is right before sending your quote.
This includes correcting any price errors or misspellings so that your quotes reflect your professionalism.
How to request a quote?
If a small firm has to employ a subcontractor or specialist for work outside of their expertise, they may obtain a bid. They can submit a “request for quote letter” to one or more vendors, who will respond with price estimates.
A letter requesting a quote should be precise and concise and include the date by which you need the price.
Include the number of items you want to order. Indicate the services you’re interested in when it comes to services.
Sample quote request
Subject: Quotation Request
My name is [Name] and I am a Manager from [Your Company Name]. I am writing to request a quote on the following services:
[Put the list of services here]
Please confirm the availability and send us a detailed description of the services and their pricing. I expect a response by the 12th of February.
Thank you for your time. I look forward to hearing from you.
Please, feel free to call or email us for further clarification.
How do you decline a quote?
Received a pricing quote that you don’t like? Perhaps the price was too high, or you chose to work with a different firm?
That’s all okay, but, since the company took the effort to generate the quote, you need to let them know of your decision.
Thank them for their proposal and explain why you are unable to accept their offer.
Sample quote rejection
Thank you very much for a detailed quote for [name goods or services], which I received [date].
I very much regret that we will not be able to place an order with you as, at this time, [put your reason here]. For this current order, we have made a decision to cooperate with other vendors.
Should we need a quote for any other goods/services you offer in the future, we will of course be in touch.
Checkpoints before you hit the send button on your quote
A superior quote will help conversions turn into invoices.
To ensure business success, here are a few crucial checkpoints to go through before sending your business quote.
Double-check the calculation
The main intention of any business quotation is to provide accurate and relevant pricing information. Recheck all your numbers before you send a quote to the prospective client.
A wrong calculation may not only mislead the prospect but also read unprofessional.
Stay on top of your formatting
Proper formatting ensures your quote is laid out correctly in terms of appearance. Choose clear fonts, highlight headings, and keywords, and choose soothing colors (if required).
This will make your business quote easy to read and presentable.
Cross-check spelling and grammar
Your quotation must be accurate. Complicated language or a tiny spelling or grammatical error can confuse the client and leave a wrong impression, reducing your chances of deal closure.
To avoid mistakes and errors, review the final quotation before sending it.
Notes for clarity
If certain information in the terms and conditions or your pricing structure is a bit complex, you can include a disclaimer and/or add small notes for clarity.
These notes should provide additional info to help your potential client decide.
A business quotation is typically a concise document. However, you can include some extra information like other services you offer, discounts, time frames you usually take to complete tasks, etc.
These optional details could be a stepping stone into persuading a prospective client to choose you.
Deliver a professional quote that wins more jobs
What seems like a small part of the business process, writing attractive business quotations is essential in seeking and retaining potential customers.
To win the deal, it is imperative to create accurate and concise quotations that meet customers’ requirements while fitting a professional layout.
Therefore, automation and investing in good accounting software may be a good idea for your business name and reputation on the market.
PandaDoc software could be a good bet as it provides a library of over 750+ quote templates designed to help you create your quotes professionally and efficiently, and make a lasting impression on your clients.
There are several kinds of professional quotes. These include service quotes, pricing quotes, sales quotes, etc. Professional quotes are mainly there to inform clients how much a company’s services would cost and the required time those services would take to execute.
You can write an official quote by mentioning the services you offer, their cost, terms and conditions of agreement, contact information of all parties, etc. Many businesses usually use RFQ templates to produce official quotes, which you can borrow here.
You can inspire a business owner by touching on all the necessary checkpoints, such as grammar, calculation, clarity, formatting, etc. in your quote. Adding automation to your business is another trick through which you impress business owners, as it allows you to streamline processes.
Originally was published in October 2021 and has been updated for comprehensiveness in January 2022