23.07.19 | 0 Comments|
Once you’ve finished speaking to a prospect, you’ve understood their goals, and have agreed on a deliverable, the next step is to write an estimate. If you’ve never created one and are wondering how to write an estimate, it’s natural for a few questions to spring to mind: What’s the best estimate format? Where can I find an estimate template? How can I best present the estimate?
These are valid questions because if you drop the ball here then you may lose the contract. Businesses don’t grow if they can’t close deals. While there are tools which give you estimate templates such as Freshbooks, it’s important to understand how to do it yourself. In this article, you’ll get a clear understanding of what an estimate is and how to write an estimate that clients love.
In many businesses, it’s not possible to provide a single price point for projects. The clients may have custom needs, the job may require a specialist, the time spent working varies, etc. Whatever the reason, they can’t determine a set cost for the project ahead of time.
When that happens, estimates are used. An estimate is an educated guess about how much a job will cost. Because it’s an estimate, the final price may be more or less. To account for this, it may be necessary to create more than one estimate. Explain the rationale behind each one to the client while allowing them to choose the one that best fits their budget.
Note: Quotations are different from estimates. An estimate isn’t binding and the final cost can fluctuate. A quotation is binding and the final price is set in stone once it has been accepted by the customer. If you end up doing more work than initially thought then you’ll have to bear the costs without passing them on.
There are two distinct factors that make up the estimate you’ll give customers. First is the estimated cost of the service you provide and the second is additional information related to the estimate. This is true whether you’re providing a freelance estimate or an estimate on behalf of a business.
The cost included in your estimates may be variable but they’re grounded in sound principles. If a customer asks how you arrived at your estimate, you should be able to explain it to them. There are two types of costs to consider: fixed and variable. The fixed costs should be applied to every job while the variable costs are unique for each estimate.
This includes the cost of labor, material, equipment rented, workspace, etc. With an idea of all the materials and labor needed, you can create a clear estimate for your client. This part of the estimate should be clearly broken down and added to the estimate as line items. Be sure to include tax information and the total work estimate when the tax is applied.
Even though it’s not a legally binding agreement between you and your client, it’s important to project professionalism at all times. A well-crafted estimate template should contain the following elements:
For the most part, you now know how to write an estimate that’ll convey professionalism and help you close deals. The good thing is that no matter the type of job you’re working on, the estimate format is the same.
To save yourself time, which will free you up to focus on your core business, it’s a good idea to create a cost estimate template you can reuse or take advantage of the estimate templates provided by invoicing software. Not all invoicing software has the estimation function, so it’s important to know what to look for when you’re choosing software.
There’s a lot of software that can help you create professional estimates in a fraction of the time. You’ll get cost estimate templates, be able to turn estimates into invoices and collect payments directly through the invoice. Here are some of the invoicing tools that’ll speed up your workflow and help you get paid on time (46% of businesses struggle with being paid on time).
Freshbooks is a popular invoicing software that’s geared towards freelancers and small businesses that use contract staff. You can choose from optimized freelance estimate templates, customize it to fit your needs, and send it out from Freshbooks.
You’ll be able to send out your freelance estimate within a few minutes and convert them to invoices when the work is done. It has an intuitive interface that welcomes users of all skill levels.
Quickbooks is one of the most popular accounting and invoicing software solutions online. It has a simple estimate creator which you can use to send professional-looking estimates to your clients. You can choose what information is included in the estimate, the general appearance, and send it to your client directly from Quickbooks. Additionally, you can convert it to an invoice at the click of a button and collect payment online.
Zoho is s suite of tools for small business owners. With the invoicing software, you’re able to create professional invoices by selecting from a series of templates. Customize the look and feel then send it out to your clients via email or give them access to a client portal. Like other best in class estimation tools, you’re able to turn estimates into invoices with a single click.
Software makes it simple to create estimates. However, it’s important to know how to write an estimate before you rely on it exclusively. Once you have the basics down you can take advantage of small business and freelance estimate templates to speed up your process.
When you sell products and services without a set price, you may need to know how to write an estimate to communicate costs to your clients. Estimates are unique because they’re not binding and the costs can fluctuate within a reasonable range.
This article has outlined the essential aspects of creating an invoice such as company information, the cost structure to include, terms and conditions, and more. It has also looked at the major features to expect from best estimation and invoicing software. When you’re ready, take a look at our in-depth reviews to find out which invoicing software is best for you.