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How to Create a Quote

Max Freedman
Max Freedman

A potential customer or client may request a price quote from you. Here's how to provide a professional estimate.

  • A price quote is a document containing an itemized list of the products and services a sales lead is interested in, the estimated total cost of the transaction, and how long the price is valid.
  • A quote should include basic contact information, a quote number, a pricing table, an expiration date and other components.
  • To create a quote, start with a template, but don't be afraid to make changes to suit your business.
  • This article is for business owners who want to know how to create a quote.

You've been talking to an exciting sales prospect and are close to clinching the sale. The sales lead wants to know your pricing, but explaining your costs verbally isn't the easiest way to ensure a lead remembers your rates. That's where a sales quotes can be convenient. Below, learn what quotes are, why quotes matter and how to create a quote.

What is a quote in business?

A price quote is a document printed on your company letterhead that contains an itemized list of the fixed prices you will charge for the services in which a potential client is interested. As a business owner, you're already familiar with price quotes from suppliers.

Similarly, you can send quotes to leads before you both agree to work together. It's up to you to set the prices in your quote, though you should consider the lead's budget when doing so. Providing a quote that convert leads into customers involves deftly balancing meeting your revenue goals and making the deal work for your lead.

The terms "quote" and "proposal" are used interchangeably, but the terms are not equivalent. You send a quote to a lead who is asking for your product offerings, availability and pricing, whereas you send a proposal to a lead asking for a general solution. Put another way, a quote typically details products and services, and a proposal typically outlines a long-term action plan, though both include prices.

Another term you might see used interchangeably with "quote" is "estimate." An estimate, unlike a proposal, is a type of quote in which the prices given are approximate, not exact. When you send an estimate in place of a quote, there are likely pricing adjustments that will be finalized later, though you'll still need to include all the information you would as if you were preparing a quote.

Key takeaway: A quote is an itemized document that shows your sales leads the products and services you'll give them and the prices for these items.

What should a sales quote include?

A sales quote should include the following components:

1. Basic contact information

At the top of your invoice, you should include your company's contact information – company name, address, phone number, email address – and that of your lead. You can also include your lead's name and title, though not all quotes contain this information.

2. Unique quote number

Every quote you issue should have a unique quote number. It's important that you use a professional, formal format that you can easily follow on future quotes, such as "Quote #0001." You should include this number just above or below the basic contact information.

3. Quote issue and expiration dates

Alongside the quote number, list the quote's date of issue and date of expiration. You should explicitly state the issue date, while the expiration date should read something like "Void after 30 days."

4. A pricing table

The pricing table is the central element of your price quote. In the table, each product (or service) should appear as a line item. For each line (or, again, each product or service the potential client is interested in purchasing), include the quantity, unit price and total price. Once you've filled in the table, add everything together to calculate the total. Don't forget to add taxes, if required.

You can create separate tables for different product or service categories. For example, if you own a trucking company, you can create separate tables for your fleet rental services and fleet maintenance services. You may also want to clarify which products or services are not included in the quote that the lead may be expecting. For our trucking company example, if you are excluding trucks above a certain size, state that explicitly on the quote.

5. Terms and conditions

While some prices in a quote are fixed, there are certain conditions or elements that are subject to change. In your terms and conditions section, you can explain what these conditions are and how they affect your pricing and work. Going back to our trucking company example, we can include in the terms and conditions the extra fees we will charge to the customer after the vehicle is driven a certain number of miles.

Your terms and conditions section also state how and when you expect to be paid, whether that means net 30 via ACH payments or half upfront, half upon project completion via check.

6. Notes

There are some things that you might want to explain to a potential customer that don't neatly fit in the above sections. You can add these concerns, which can include additional project details or thanking the customer for considering your company, to the notes section.

7. Additional items

Several other helpful but less important items to include with your company's price quote may include discounts you might offer the customer, a signature line, a purchase order number, employer identification numbers or sales tax numbers.

Key takeaway: A quote should include items such as basic contact information, a pricing table, a quote expiration date and more.

How to create a sales quote

Now that you know what is included in a sales quote, you're ready to create one. Doing so is easy – just follow the below steps.

1. Find the right template.

Building a quote from scratch can be tedious and time-consuming. The fastest and easiest way to create a quote for your business is to use a template. Templates are usually Word or Excel documents, though sometimes, they are fillable PDFs.

2. Insert your company name and, if applicable, branding.

Once you find a template you like, modify it with your company information, logo, and other details specific to your business. When your template is ready, save it as a separate file, and before you make a new quote, rename and save the file with a unique invoice identifier.

3. Fill in the contact information for the customer.

Your quote template should list the contact information for your client. You may also want to distinguish the billing and shipping address from each other and include fields like the client's phone number and email address.

4. Complete the pricing table.

For the pricing table, you have two options. The first option is to complete the table, which should be preprogrammed in the template, without needing to significantly modify the table's appearance or columns. The second option is to create a table in Excel, then paste the Excel table over the template's table. If you use Google Docs and Sheets rather than Microsoft, you can transmit changes in your Sheets file to your Google Doc with just one click – no copying and pasting required.

5. List totals, terms and conditions, notes and optional information.

The bottom of the quote is usually where your totals, terms and conditions, notes, and other optional information. Your template should have ample space for all of these elements, and you can add other fields as needed.

Key takeaway: To create a quote, choose a template, then fill in the information, but don't be afraid to modify the template components as needed.

Sales quote templates

Now that you're ready to create a quote, you can get started using this fillable, downloadable template from OnlineInvoices.com. Other options include downloadable sheets from Invoice Simple and varying-format files from Examples.com. Using these templates, price quotes take just minutes to make, and hopefully more sales soon follow.

Image Credit: Ridofranz / Getty Images
Max Freedman
Max Freedman
Business News Daily Contributing Writer
Max Freedman is a content writer who has written hundreds of articles about small business strategy and operations, with a focus on finance and HR topics. He's also published articles on payroll, small business funding, and content marketing. In addition to covering these business fundamentals, Max also writes about improving company culture, optimizing business social media pages, and choosing appropriate organizational structures for small businesses.