There’s a lot that goes into winning work. 

You need to make a great first impression. You need to show your potential clients that you understand their needs. And you need to prove you can deliver—for the right price. 

Knowing how to create an estimate for the job is a really important part of this. In our guide, we’ll show you exactly how, complete with a few bonus tips along the way. 

First, we’ll explain why accurate estimates matter. Then, we’ll list the key elements before jumping into the step-by-step process. 

We’ll also explain the value of using tools and software. To finish, we’ll give you some tips on winning more business with your estimates. 

Let’s get started! 

Why Accurate Estimates Are Crucial for Your Business 

You want to be reimbursed for the hard work you do. At the same time, your customers want to know precisely what they’re paying for. 

An accurate estimate achieves both. Everyone wins. 

There’s more, too. Accurate estimates: 

• Help you win the trust of clients: Trust is the foundation of long-term success. Why? Because customers who trust you are loyal. They choose you over your competitors again and again. 
• Make sure your work is profitable: You give your customers time and resources. Both of these things have value. An accurate estimate ensures the money you get paid is enough to cover any expenses relating to the job—including your income. 
• Avoid scope creep: This happens when a project slowly but surely becomes bigger and more involved than you initially thought. 
• Improves your operational efficiency: Estimates serve as the starting point for your invoice. If the estimate is accurate, invoicing becomes a breeze. 

RELATED ARTICLE: How to Convert an Estimate to an Invoice: A Step-by-Step Guide 

Key Elements of a Job Estimate 

Before we jump into the steps that outline how to create an estimate, let’s talk essentials. 

Below are the key elements of a job estimate. Include these to make sure all your bases are covered. 

• Client information: This includes their name and contact details.  
• Scope of work: This outlines the specific activities the estimate covers.  
• Itemized costs: This is a list of all the costs associated with the project.  
• Payment terms: This information explains how and when your client should pay. It lists the payment types you accept—credit card, online payments, direct debit, and so on. It also notes any special terms that apply, like late fees or deposits. 
• Project timeline: This gives your client a rough idea of when you will start and finish their job. 
• How long the estimate is valid for: This gives your clients a date by which they need to accept your estimate. If they accept it after that date, the prices might be different. The idea is to protect your business against market changes, like if a material becomes more expensive. 
• Change order policy: This section explains what happens if your clients want to alter the scope. 
• How to accept the estimate: This instructs your clients on what to do if they want to go ahead with your offer. For example, they might send you an email response. 

You can see how all these elements come together in Invoice Simple’s estimate maker. 

6 Steps to Create an Estimate 

Creating an accurate job estimate doesn’t have to be difficult. With a strategic approach, you can win more business and build customer trust. 

Follow these six steps: 

Step 1: Gather Project Details 

How this step unfolds will depend on the type of work you do. But generally speaking, you’ll likely have one or more conversations with the prospective client. 

During these conversations, you’ll discuss their needs, wants, and any challenges or limitations. This could happen on the phone or in person. It could even take place via email or a combination of channels. 

Regardless, this is the information you’ll use to create the job estimate. Write down the following: 

• The specifics of the job 
• The number of hours you estimate it’ll take to complete 
• The materials you will need and how much of each 
• Any add-ons or extras your clients wanted a quote for 

Bonus tip: When chatting with prospects, keep your job estimate process in mind. Think about the details you need to create an accurate quote. Then, use that insight to ask the right questions. 

This approach can make your consultations more thorough and estimates more accurate and personalized. 

Step 2: Get Clear on the Costs 

You know what’s involved. Next, it’s time to determine how much it’ll all cost. 

There are three things you’ll need to think about: 

1. The cost of your (or an employee’s) time 
2. The cost of the materials 
3. Overhead costs 

Let’s start with time. 

You want to make sure you’re earning a profit on every job. Charging the right amount for your time is a must. 

You might charge an hourly rate or a flat fee. Both have pros and cons—it’s up to you to decide which approach is best. 

Then, you need to research the cost of the materials. 

Don’t rely on your figures from last year. Costs change, and you don’t want to be caught out-of-pocket. 

You should also add a waste factor. This means buying 5–15% extra materials. This handy calculator might help. 

Finally, you’ll need to add in your overhead costs. These are the expenses that keep your business running, like insurance and transportation. 

Overhead costs help you maintain a healthy profit margin when you work for yourself. 

RELATED ARTICLE: What Is a Pricing Strategy? Tips & Examples 

Step 3: Use a Template or Estimating Software 

Using a template is a great way to simplify the process. It’s a fill-in-the-blank document that ensures you don’t overlook anything. You can even find ones tailored to your specific industry. 

Estimating software takes this convenience to the next level. 

It saves important details and handles all the calculations for you. This means you don’t need to worry about math errors, and it helps you stay consistent. Just input the job details, and the software generates the estimate for you. 

Bonus tip: Before you start, customize your template or software to include your business logo and colors. 

Step 4: Add Contingency Costs 

Contingency costs cover your business when the unexpected occurs. They protect your profit margin if something doesn’t go to plan. Surprises happen—whether it’s rising material costs or bad weather that causes delays. 

Some examples to consider include: 

• Extra time needed if the project takes longer than expected 

• Additional materials in case of waste or errors 

Step 5: Review and Finalize the Estimate 

Email typos are one thing. The wrong price on a job estimate is a whole other disaster. 

Before you hit send, run over your estimate with a fine-toothed comb. Check for grammar mistakes, spelling errors, and incorrect calculations. 

If something looks wrong, take the time to fix it now. That way, you avoid costly misunderstandings and put your best foot forward. 

Bonus tip: Estimating software can double-check your work for accuracy. 

Don’t have software? Use tools like Grammarly or even your computer’s built-in spell check. These help you catch mistakes before your client does! 

Step 6: Present the Estimate 

Save your estimate as a PDF or use an online system that creates a shareable link. 

Then, send the estimate in a way that feels personalized to your client. You might email it or even text it—whatever works best for them. 

Along with the estimate, let them know you’re available to walk through it and answer any questions. This extra step shows you’re approachable.  

It also demonstrates your commitment to transparency. And according to business.com, “Companies that embrace transparency as a core business value find that it leads to consumer trust, loyalty and business success.” 

Using Tools and Software to Simplify Estimating 

Work smarter, not harder. It’s a business truism. So when it comes to creating accurate, job-winning estimates, give templates or software a go. 

As we mentioned, free estimate templates are pre-made documents. They have spaces for you to fill in, covering all the important areas of an estimate. 

Do keep in mind, however, that templates need customizing. You may need to add in extra sections or remove those that aren’t relevant. And be sure to pop in your logo to encourage brand recognition. 

Another option is estimating software. Software does all the hard lifting for you—material calculations, labor requirements, the total job cost, and more. 

Plus, software like Invoice Simple comes with extra features. You can use your estimates to create and send professional invoices with just a few clicks. You can also keep track of who’s paid and who hasn’t. 

The benefits include: 

• Faster and more accurate estimates 
• Integration with other tools (e.g., project management software) for effortless data sharing 
• Greater functionality with automated follow-ups and reminders 

Tips for Winning Clients with Your Estimates 

How can you increase the likelihood of securing work? Give these tips a try: 

• Offer flexible payment terms. This might include adding more payment methods, like online payments. Or it could mean allowing staged payments throughout the project. 
• Personalize your estimates. Your prospects want to feel heard. Make sure your estimates meet their individual needs. For example, did they bring up an extra during your consultation? Add it in as an optional add-on to show you were listening. 
• Send your estimates on time. Use a template or software to speed up the process. The sooner you get back to your potential clients, the less time they’ll have to research your competitors.