Writing a quote: what you should consider when creating a quote

Companies need orders to make profit. When you create a quote, you’re reacting to customers’ requests or drawing attention to your products or services when cold calling. A written quote should meet certain standards, since it forms the basis of the business re­la­tion­ship between you and the customer.

Whether you decide to write quotes or not, depends mainly on the cost-benefit ratio. You can sig­nif­i­cant­ly improve your chances, however, by heeding these tips on the content and structure, and how to formulate a quote. A precise and well-struc­tured quote is a pro­fes­sion­al approach and can increase the chances of the recipient accepting your offer.

Preparing a quote belongs to marketing and ac­qui­si­tion and therefore to the everyday routine of many busi­ness­es and service providers. Many free­lancers also write quotes for their companies. By doing this, you secure your orders and therefore also your income. A pro­fes­sion­al approach should be top priority. You have more legal certainty if your quote is submitted to your customers in written form. You have proof that all sides have agreed, unlike with a verbal agreement. Generally, a quote should cover all the facts, services, and costs relevant to your business. This is also important because the offer is the basis of the final purchase contract between you and the buyer. The contract is completed as soon as a customer receives your quote, places an order, and you issue a con­fir­ma­tion of the order. If the buyer has accepted the offer, it is legally binding – both parties (buyer and seller) can refer to the agreement stip­u­lat­ed in the quote. Offer and ac­cep­tance con­sti­tute two de­c­la­ra­tions of intent, which are concluded after both parties agree to the contract. In ex­cep­tion­al cir­cum­stances, a quote can lose its legal binding (e.g. if the order arrives late or differs from what the customer ordered). You should always check the final version to make sure it’s correct – es­pe­cial­ly the prices as well as the shipping in­for­ma­tion. You can, however, label certain parts of the quote as non-binding through exemption clauses (e.g. by using phrases such as 'while stocks last', 'prices are subject to change', and 'no guar­an­tee'). Some courts, however, have labeled these exemption causes as anti-com­pet­i­tive or non-effective in certain contexts. Therefore, it is advisable to only use them if this isn’t the case.

Quotes should be written formally. You should def­i­nite­ly use your logo: it is your trademark and therefore belongs to the corporate design of your company and should be placed in a prominent position.

The usual for­mal­i­ties are essential when writing to customers: the quote must contain both the name of your company (with legal status and address), your first name and last name as well as the customer’s in­for­ma­tion. You should also include the quote number, date, estimated shipping date, customer number, and the contact person of your company. The place you’re sending the order to and the date are also needed.

In the heading, you can specify exactly what you’re offering. Use the correct form when ad­dress­ing the customer since this shows respect and pro­fes­sion­al­ism.

The text should be kept as short as possible and divided into compact para­graphs of no more than four lines. Describe and explain your services to the customer. Fur­ther­more, a quote consists of a clear statement of what your services are and the basic in­for­ma­tion that has been agreed upon. Include the different amounts (e.g. quantity of goods, number of hours for a service) and the cor­re­spond­ing prices. This can be presented as a table or a list.

For the customer to be able to un­der­stand the structure of your quote better, you should break down the total price into in­ter­me­di­ate sums e.g. the net price, price with sales tax, and the shipping costs. It is also advisable to set a time period so that you can specify how long the con­di­tions are valid.

The actual quote should ideally be no longer than one page. However, it’s not always possible to fit all the necessary in­for­ma­tion on a single page. If you need to give your customer more details that require more space, you can send an ac­com­pa­ny­ing letter ex­plain­ing the rest.

As a rule, you include text to show the customer the benefits of your service. Emphasize the ad­van­tages and positive aspects here since you want to convince your potential customers that their order is in the best hands.

Try to find at least one unique feature that makes your quote stand out. For goods, you could mention how good the quality of the material is, the im­pres­sive work­man­ship, options for custom-made products, etc. In terms of services, however, you could emphasize how well the customer is supported in their project or that customer service is easily ac­ces­si­ble.

If the quality of your services have resulted in you receiving im­pres­sive ref­er­ences and/or customer comments, you can also list these (including names and, if ap­plic­a­ble, the company and position of the re­spec­tive person) in the quote. The aim of a quote, however, is not self-praise. The examples are designed to show potential customers that others have ben­e­fit­ted from your services.

Include powerful arguments to encourage potential customers to take advantage of your offer. In doing so, you focus on the in­di­vid­ual needs of your customer and avoid using technical terms: the content should be un­der­stand­able for the reader at all times. Don’t repeat anything as this un­nec­es­sar­i­ly lengthens the text.

For your business re­la­tion­ship to have a solid base, you have to include certain content.

• Exact de­scrip­tion of what you’re offering: designate your goods and/or services as precisely as possible so that there are no mis­un­der­stand­ings. If there’s a time limit, you should also mention this.
• Prices and quantity or duration of services offered: it is not always possible to specify the expected working time and the necessary pro­duc­tion costs in advance. This is why it could make sense to arrange an hourly rate. If you give your customer a discount or other benefits (a discount will have a positive effect on how the offer performs), you should have this in writing. The same applies if any ad­di­tion­al costs occur.
• Pro­duc­tion and shipping time: indicate how much time the pro­duc­tion and delivery of the offered services need. If you aren’t able to work this out in advance because the project is quite long, talk to the customer about it and come to an agreement.
• Shipping and packaging costs: when shipping goods, you should list all costs that result from this. Indicate the type of shipping here as well.
• Fees: any ad­di­tion­al costs you incur due to traveling to meet the customer or because of overnight ac­com­mo­da­tion and meals should be stated.
• Terms of payment: it always makes sense to specify how and when the customer should pay. For work that extends over a longer period of time, you should offer the option of paying in in­stall­ments.
• Reference to the general terms and con­di­tions: if your company has general terms and con­di­tions, you should include them in the quote. Any extra details should be mentioned in a separate letter. You are the only one who is re­spon­si­ble for any legal disputes that might arise between you and the customer.
• Product’s usage rights: make it clear where the order is carried out and when the customer will receive the product or service (often after payment has been received). If you still want certain rights of use for the product after the order has been completed, you need to specify this in the quote.
• In­for­ma­tion on damaged de­liv­er­ies, non-delivered products, and payment problems: sometimes com­pli­ca­tions can occur (even without personal neg­li­gence), so to make sure that you’re prepared in case the worst happens, you should have a certain clause ex­plain­ing what the procedure is, which both parties then agree on.

Even if it takes a while to put together a well-struc­tured quote, it’s worth it since you can use it as a template for further quotes. Many for­mal­i­ties and com­po­nents can be used in every quote. So once you’ve created a suc­cess­ful quote, you or your employees will always have a sample copy that meets the basic content re­quire­ments. You just need to customize it ac­cord­ing­ly.

Although a quote needs to be a man­age­able size, there are many aspects that need to be con­sid­ered in terms of content and structure. The following checklist sum­ma­rizes the es­sen­tials:

• Ensure you know the wishes and general con­di­tions the customer expects from the quote.
• Mention the benefits of what you’re offering compared to that of your com­pe­ti­tion.
• A written offer should be easy to un­der­stand and as short as possible without ne­glect­ing any important aspects.
• Address your customers per­son­al­ly.
• State the price with and without sales tax.
• Limit the duration of your offer.
• Check to make sure all in­for­ma­tion and notes on your company are correct and detailed.

The time limit also applies when it comes to sending out the quote: the quicker you react to an in­ter­est­ed customer, the higher the chances are of it paying off. Aim to send the quote out to the customer within 24 hours.

After sending it out, you should leave the recipient some time to read it through and decide if they want to go ahead with it. If you haven’t received a reply after a while, contact them again. The amount of time you decide to leave before con­tact­ing them again so as not to appear pushy or obtrusive, depends on the order, but 1 to 2 weeks is quite normal.

If your quote is rejected, you can always ask why this was the case. Usually it’s because of the price, but there could also be other reasons. Not everyone will explain the reason why, so be prepared for this. You could have your quote checked over by an in­de­pen­dent expert (black out any sensitive in­for­ma­tion or omit it). This can provide you with valuable insights and improve any future quotes you send.

Dis­claimer: Please note the legal dis­claimer relating to this article.