How to use this estimate template
Enter your business, the client under Prepared for, and the job name or site address under Project / job. List the work line by line with quantities and unit prices; the estimated total updates as you type.
The Valid until date starts 30 days after the estimate date and moves with it if you change the estimate date. The terms box starts with wording that says the estimate is not a fixed-price contract and that work begins on written approval, and the notes box starts with a short exclusions line. Edit both to describe this job: that is where your assumptions and exclusions belong. Every estimate prints an Accepted by (signature and name) line and a date line, so a client can sign a printed or PDF copy to approve it.
Download as Word to adjust the wording, as PDF to send, or print it for an on-site handover. Fill with an example loads a roofing estimate you can study or overwrite.
Estimate vs. quote vs. bid
These words are used loosely, but in a dispute the label on the document matters.
| Feature | Estimate | Quote | Bid |
|---|---|---|---|
| Price is | An approximation | Fixed for a defined scope | Fixed, submitted competitively |
| Binding? | Generally no | Yes, once accepted within validity | Yes, per the tender's rules |
| Best when | Scope has unknowns | Scope is fully defined | Buyer runs a formal selection |
| Changing the price | A revised estimate | A change order agreed by both sides | Usually only as the tender allows |
An estimate tells the client roughly what the work will cost given what you know today. A quote commits you to a price. A bid is a quote submitted in response to a formal request, often against a specification you did not write, and usually on the buyer's terms.
Because an estimate is non-binding, it is also weaker as a sales tool: a client comparing three contractors will favour the one who commits. Use an estimate when there is genuine uncertainty (hidden conditions, unclear scope, volatile material prices) and say why in the document. When you can commit, send a quote instead.
Note that "non-binding" has limits. Some states regulate estimates for particular trades. Auto-repair laws in California, for example, require a written estimate and customer authorisation before the final bill can exceed it. Home-improvement laws in several states require a written contract above certain amounts. And any estimate that is deliberately low to win the job and then inflated can be treated as deceptive. Write estimates you can stand behind.
How to price an estimate
Estimates that lose money usually go wrong in one of three places: labour hours are guessed rather than calculated, overhead is forgotten, and margin is confused with markup.
- Materials. List each material at current supplier prices, plus delivery and a waste allowance (5–10% for most trades; more for tile, flooring, and lumber).
- Labour. Estimate hours per task, not per job, and multiply by a fully loaded hourly rate: wages plus payroll taxes, workers' comp, insurance, vehicle, tools and downtime. Work out your own loaded rate; it is usually well above the wage.
- Overhead. Rent, software, marketing, admin time and vehicles have to be recovered across your jobs. Many small contractors add 10–20% to direct costs for this.
- Profit. Decide the margin you need and apply it to the total cost. This is where the arithmetic bites: adding 20% to cost is a 20% markup, which produces only a 16.7% margin on the sale price. To earn a 20% margin you must divide cost by 0.80, a 25% markup.
Our markup calculator converts between the two, and the profit margin calculator tells you what price you need to hit a target margin on a given cost. Use one of them before you type the unit prices into the estimate.
Contingency
For work with unknowns, there are two honest ways to handle risk:
- A visible contingency line. Add an item such as "Contingency for unforeseen conditions (10%)" and state that unused contingency is not billed. Clients understand this on renovation and repair work, and it avoids the awkward mid-project conversation.
- An explicit exclusion. State that unforeseen conditions (rot, asbestos, non-code wiring) are excluded and will be quoted separately before work continues.
What does not work is quietly padding every line to absorb risk. Clients compare estimates line by line, the padding makes you look expensive, and if the job goes smoothly you have overcharged without saying so.
Scope and exclusions language
The notes and terms fields are where an estimate earns its keep. Cover:
- What is included, in enough detail that a reasonable person could tell whether a task is in scope. "Paint living room" is an argument waiting to happen; "Two coats of Benjamin Moore Regal Select on walls and ceiling of living room (approx. 320 sq ft walls), trim excluded" is not.
- What is excluded. Permits, disposal fees, electrical work by others, moving furniture, repairs discovered after opening walls.
- Assumptions. Site access, working hours, that the client provides power and water, that existing structures are sound.
- How changes are handled. "Changes to scope will be priced and approved in writing before work proceeds."
- Payment schedule, even at the estimate stage: deposit, progress payments, final payment on completion.
Two or three sentences per bullet is enough. The goal is not legal armour; it is that both of you have the same picture of the job.
Validity period
Always state how long the estimate is good for. Thirty days is standard; use 14 days when material prices are moving or your schedule is filling fast. The template fills in a date 30 days out; overwrite it for a shorter window, and the printed date saves the client from counting days.
If a client comes back after the date, re-check material prices and your calendar before honouring it. Most clients will accept a revised estimate if you explain what changed; few will accept a surprise on the final invoice.
Converting an estimate to an invoice
When the work is done, the estimate becomes the skeleton of the invoice:
- Open the invoice template and enter the same business and client details.
- Copy the line items across, adjusting quantities to what was actually delivered and adding approved change orders as separate lines.
- Put the estimate number in the invoice's reference field so the client's bookkeeper can match them.
- If a deposit was taken, enter it in "Amount paid" so the invoice shows the correct balance due.
If the final invoice differs materially from the estimate, say why in the notes, referencing the change orders. An unexplained difference between estimate and invoice invites a dispute.
Worked example
The example estimate in the template (Fill with an example) is a roof replacement, EST-0318, for a house in Lakewood, Colorado:
| Description | Qty | Unit price | Amount |
|---|---|---|---|
| Tear-off of existing shingles (squares) | 18 | $85.00 | $1,530.00 |
| Architectural shingles, installed (squares) | 18 | $310.00 | $5,580.00 |
| Synthetic underlayment (rolls) | 5 | $96.00 | $480.00 |
| Drip edge and flashing (linear ft) | 160 | $3.25 | $520.00 |
| Dumpster rental and disposal | 1 | $475.00 | $475.00 |
The estimated total is $8,585.00. The tax rate is left at 0 because the roofer has priced materials with the tax it pays its supplier built in; whether that is the right treatment depends on the state's rules for contractors. If the roofer's direct cost for the job is $6,440, the $2,145 difference is a 33.3% markup on cost and a 25.0% margin on the price. Because rotten decking may turn up once the old shingles are off, a visible contingency line of 10% ($858.50) would bring the estimated total to $9,443.50, with a note that unused contingency is not billed.
Contractor-specific tips
- Itemise labour and materials separately, even when you charge a lump sum. Clients accept a higher total when they can see what it is made of, and it makes change orders simple to price.
- Show the tax treatment. In many states a contractor pays sales tax on materials and does not charge tax to the homeowner; in others, the contract is taxable. State which applies rather than leaving the tax line blank.
- Include your licence number where your state requires it on written estimates. The business block has no licence field, so add it as an extra line in the address box or in the notes.
- Photograph the site when you estimate and keep the photos with your copy. When a "that was already like that" conversation happens six weeks later, they settle it.
- Estimate in person for anything over a few hundred dollars. Remote estimates from photos are where the unknowns hide.
- Send it promptly. An estimate that arrives the day after the site visit, while the client is still comparing options, has a better chance than one that arrives a week later.
Limitations
The template produces one estimate at a time. It keeps your latest draft in this browser but no history of versions, applies a single tax rate to the whole estimate, and has no fields for photos or drawings. Whether an estimate binds you depends on its wording and on local law, so treat the default terms as a starting point, not legal advice.