How to Word Contractor Estimates

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Estimates are extremely important in the construction industry. Contractors develop estimates as a detailed written description of a task or tasks they intend to perform within a specified time frame for a specific price. A poorly prepared estimate can cost the contractor the job, or create lawsuits in the future. Most customers will solicit estimates from numerous contractors and award the contract to the contractor with the estimate that best meets their needs.

Contact information

Include all of your company’s contact information clearly on the estimate proposal. Company phone number, cell phone number, fax number, company address, contractor's license number and contact person are all items that should be easily found on the proposal.

List, in detail, every task you intend to perform for the customer in the estimate proposal. Identify specific tasks you are not planning to perform (trash removal from the site, providing a job-site toilet, etc.). Phrase each task description clearly to eliminate the customer's potential assumptions and questions. If the estimate proposal has many parts, list and price each part separately. This will save time during negotiations with the client.

Provide a total price for all line items. Remember to calculate the appropriate sales tax and include it in the total.

Include the date and number of the estimate proposal. A revision number can be created when clients request multiple proposals or if any changes in scope or price need to be made thereby revising the original estimate.

Provide the customer a signatory line to sign and date the proposal. Do not begin work without a formal notice to proceed from the customer. Without formal consent, there is no paper trail tying the contractor to the customer. This can result in non-payment for work completed or renegotiation after the work is complete. It's a good practice for the contractor to sign and date the proposal as well. Provide the customer an executed copy (signed by both parties) for their records.