How to write a contractor estimate
Published
An estimate is your written price for a job, given before the work starts. A clear one builds trust, sets expectations and gives you something to point to when the customer asks for extras. Here is a practical way to put one together.
1. Describe the scope in plain words
Say what you will do, where, and what is not included. Mention the assumptions your price depends on, such as access to the site, existing conditions or materials supplied by the customer. A vague scope is the most common reason for arguments about price later.
2. Split the price into labor, materials and other costs
List each item on its own line with a quantity, a unit and a unit price. Group the lines into sections that follow the job, for example demolition, rough-in and finishes, so the customer can see where the money goes.
If you quote similar work often, keep a catalog of your usual labor rates and materials. It saves time and keeps your prices consistent from one job to the next.
3. Know your cost, profit, margin and markup
Cost is what the job costs you. Profit is the price minus the cost. Markup is the profit divided by the cost, and margin is the profit divided by the price. The two are easy to confuse.
Example: a job costs you 800 and you charge 1,000. The profit is 200, the markup is 25% and the margin is 20%. If you want a 20% margin, you need a 25% markup, not 20%.
These numbers are for you. The customer's estimate normally shows prices, not your cost or margin.
4. Make tax and discounts obvious
State whether your prices include tax or tax is added on top, and show any discount on its own line. Tax rules and rates depend on where you work and what you sell, so check what applies to your business before you decide how to present them.
5. Add the terms
Write down how long the price is valid, when you can start, how long the job should take and how you want to be paid, for example a deposit and a final payment. Add how changes to the scope will be priced.
Wording and legal requirements differ by country and trade, so use terms that are right for your business.
6. Send a clean document and follow up
Send the estimate as a PDF with your business name, contact details and logo, and a number and date you can refer to. Follow up after a few days. A short message asking whether the customer has questions is often enough.
Writing estimates in SiteReporta
SiteReporta is an iPhone and iPad app for this workflow. You build an estimate from your own catalog of labor and materials, with sections, discounts and tax added on top or included in your prices, and export a PDF on A4 or US Letter with your logo. Cost, profit, margin and markup are shown to you while you build and never appear on the customer's PDF.
Once the customer accepts, read estimate vs invoice to see how the next step works, or keep a daily record of the job with a site report.
General guidance, not legal, tax or accounting advice. Rules differ by country and trade.