How to Create a Quote (9 Easy Steps)

A quote, or quotation, is a formal document that outlines the cost of specific products or services offered by a company. While it can be verbal, it is often handwritten or typed and provided to an interested customer upon request. Creating a professional, good-quality quote is crucial to your business as it markets your products or services and generates new business. Let’s look at everything you need to know to create a quote for your company.

How to Create a Quote

Now, let’s review how to create a quote. You don’t need a special application to do this, and you can use MS Word or MS Excel on your desktop. The steps are as follows:

Step 1: Choose a Template

Always start by selecting a quote template that meets your needs. You want to pick something simple, presentable, professional, and easy to edit. Usually, you can base your choice on the type of application or software you prefer using. We have provided a wide range of professional, free-to-download quote templates for different businesses in Word, PDF, Excel, Google Sheets, Google Docs, and more. Once you find a template that works for you, customize it by adding your company logo or letterhead.

Step 2: Supply Client Information

Next, add the potential client’s information, including their:

  • Name
  • Business’s name
  • Phone number
  • Email address
  • Address
  • Fax number (if applicable)
  • Email address
  • Title

You should also supply your own company details and contact information unless the quote is created on company stationery with company letterhead.

Step 3: Number the Quote

If you are using accounting software, it should number your quote automatically in line with your filing system. If not, you can number the quote yourself on the right or left-hand side corner. You can choose a numbering system of your liking. For example, your first quote can be 1, Q1, 1/2022, or A1, followed by 2, Q2, 2/2022, A2, and so on.

Step 4: Add a Date of Issue

Indicate the date you send the potential client the quote. This detail is crucial because, in most industries, quotes have limited validity. Subsequently, you should also add a timeline within which you can honor the deal represented in the quote, such as “Valid for 15 days.”

Step 5: List the Products or Services

In the list section (the area with rows and columns), note the products or services the potential client has asked about. Create a short description for each of the entries that includes product number, quantity, unit price, and total price by item, where applicable. If the project is long or complex, divide the items by project stage. You should also list labor costs separately from material costs.

Step 6: Calculate the Costs

Now that you have indicated the unit prices for every item on your list calculate the total costs to find a total, add tax, and come up with a grand total. Point out everything that is not included in your costs. For example, do you handle shipping, or is that a separate cost for the client?

Step 7: Set the Terms and Conditions

The terms and conditions are the parameters within which you are willing and able to carry out the project. In this section, you should account for all possible variations in the project scope, such as a changing timeline caused by weather changes and any extra costs involved in additional work. It is also important to define what qualifies as additional work and when it might be required. This is also where you set your payment terms, including when and how you wish to be paid for the project.

Step 8: Add Notes

In the following section, add any details you believe are crucial to the project. A good example is a timeline and expected start and completion dates for the project. This is also the place to summarize the scope of the project and thank the client for considering your business.

Step 9: Add Optional Details

While your quote doesn’t necessarily require this information to be complete, it can be beneficial to add it. Details to consider for this section include the following:

  • Business Number (EIN)
  • Purchase order number, which you get from the client.
  • Sales tax number

Step 10: Finalize

Lastly, include a signature section for the client where they can sign the quote if they accept it, turning it into a legal agreement. You can also include any discounts you are willing to offer the customer. Finish by checking your grammar and spelling, confirming the math, and saving and sending the quote.

Different Types of Quotes (by Business Type)

Before diving into how to make a quote, it is important to point out that there are many types of quotes. They can be categorized in multiple ways, but the most common classification is by business or industry type. Quotes meant for different businesses will vary slightly, depending on how a business works, the type of products it offers, and how it prices them. Common examples include:

How to Request a Quote

As a business, you can request a quote from other companies or suppliers as you prepare one for your potential clients. For example, if you will need to hire a specialist or subcontractor to complete one part of the project, you can request several quotes, levy them against each other, and pick one that fits within your budget. You can then factor this figure into your original quote for your client. A request for a quote letter is a straightforward and concise document. It should contain your contact information, a list of the type and quantity of products you need (or the services in which you are interested), and the date by which you need the quote.

Key Points

As you can see, a quote is a crucial business document, and creating it, although nuanced, is a fairly easy process. The document should essentially list the goods or services the potential customer has requested and unit and total prices, including taxes, labor costs, and discounts. To prevent misunderstandings and legal problems during the project, a good quote should also contain the terms and conditions within which you are willing to operate.

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