A quotation is a written statement on how much money it will cost to do a particular job. In the field service industry, as plumbing is, every customer needs a quote to understand the scope and cost of a job. If you don’t have a firm grasp on preparing accurate quotes, you are going to put your business at considerable risk.
Quoting too high encourages potential customers to turn to your competitors. Quoting too low means you lose out on revenue and will struggle to make a profit. Since the aim of your business is to generate an income and be successful at converting leads into sales, you must learn how to write a professional quote correctly.
Aside from preventing loss, an accurate quote also helps to protect you in the event of a payment dispute with a client. A well put together quote can help to build trust with a customer by being transparent with them about exactly how their money is being spent and what they can expect in return.
With this in mind, here are five handy tips on how to accurately quote for plumbing jobs:
- Compute your hourly rate
The hourly rate is an appropriate indication of how much money you’ll earn in a day or week. So, start by dividing your desired weekly earnings by the number of hours you typically work every week. Remember, the hourly rate shouldn’t necessarily be equal to the average plumber’s wage. Since you’re the business owner, the hourly figure must also cater to other expenses such as taxes, office rent, internet, and electricity bills.
You’ll also have to factor for the days you may not be working due to unavoidable circumstances. For this reason, it’s evident that your business’s hourly rate must be higher than an average plumber’s hourly wage.
As there are so many things to consider when putting a quote together, you want to ensure that you have a robust process and system in place that you can rely on to do so. Estimating software like Jobber can really help with this and offers templates you can customize and populate that will calculate this for you. Aside from preparing quotes, estimating software may come with additional essential business management features like tracking scheduled and completed jobs, dispatching workers with the correct skills to different sites, appointment booking, and organizing client information. The tracking feature is particularly useful since it allows you to know the exact time spent on a given job, which helps estimate future contracts.
- Factor in overhead costs
An overhead cost is any expense you may incur to support your business; it may not be directly connected to the services you’re providing. For example, the cost of fueling your transport, paying for electricity bills at the workplace, renting office space, or marketing the business. These are essential things you’ll need to do to run your business efficiently daily. Failure to factor these costs into the fees you charge may leave your business suffering losses, which won’t be sustainable if you want to continue operating and grow in the future.
- Examine the work to be done
Every plumbing job is different to the next. Don’t assume that a sink repair will take the same time in every home or premises. Some sites may also be considerably more inaccessible than others, thereby taking more time.
Don’t forget to also consider if you need to prepare a site in order to carry out the necessary work such as unclogging bathroom drains before being able to repair them. In such cases, you may need to purchase pipe cleaners to get rid of rust stains before proceeding.
For these reasons, it is usually necessary to visit a site in order to assess the situation before releasing a quote to a prospective customer. Then, when a client sees an accurate and professional plan that serves to solve their problem, they’ll be far more likely to understand and accept the charges being laid out, encouraging prompt payment.
- Leave room for contingencies
Contingency is a key component of any project’s budget. It’s not uncommon to encounter some issues that you hadn’t anticipated or foreseen earlier. For example, you might agree to a debris removal job at an old house, only to realize once you start that some pipe sections are too damaged, and it will be necessary to purchase new ones. You don’t want to be the one that incurs these extra costs. The standard contingency for most projects is usually 10%, but this may vary depending on the risks of a particular task.
If the new costs are sizable, you may want to have a conversation with your client to see how they would like to proceed with the additional work.
Preparing accurate quotes for your plumbing jobs ensures your business can operate at a profit level that is acceptable to you. Failure to do so may bring you significant losses and compromise your business’s sustainability. So, aim to get your estimates as accurate as possible. Modern estimating software can greatly help you with this. It will also help you to appear more professional and attractive to do business with over your competitors.