More often than not, people use the terms “quote” and an “estimate” interchangeably.
However, other than the fact that we’re talking about money, these two don’t really have much in common. To help you gain a better understanding of the two, we’re going to outline the differences and give you a few tips on how you can tell one from the other.
What’s An Estimate?
An estimate would be an educated, approximate or rough guess, based on what a job or a service might cost. You would give an estimate before knowing all the details of a job, mostly during the negotiation stage.
For instance, let’s say you’ve been tasked with painting a house. Before knowing the exact paint you’ll use and the exact surface you’re painting – you would give an estimate of how much a job like that would cost.
With all that being said, an estimate is a number that is subject to change once all the necessary details are gathered. A lot of small businesses are offering estimates for the job – to make the entire process for their clients easier and as a part of small business SEO strategy – yes, Google looks at the value you provide for your visitors.
What’s A Quote?
A quote, on the other hand, is an exact asking price for the job or service at hand. Drawn up by hand or using a quote generator, a quote is based on information and details, and it is not a guess. It is an exact, fixed asking price that is not subject to change.
Let’s revisit the previous example. Let’s say you’ve estimated that the house-painting job would be $1000. Then, once you’ve learned all the necessary details, you say that the job will cost $1300. Now, the negotiations are done. Once you’ve given your quote and that quote has been accepted – there’s no changing it.
The only instance in which the quote can be changed is if the circumstances of the job or service are changed mid-way through the project.
Tips For Understanding The Difference Between A Quote And An Estimate
Now, let’s take a look at some tips to help you differentiate the two.
1. Estimates Are Informal
Even though sometimes estimates are provided in written form – they’re informal. They’re not legally binding, nor do they affect the outcome of the project. An estimate is just a number that we would toss around to help our potential client understand the general scope of the project. A guideline, if you will.
2. Quotes Are Negotiable
You can’t negotiate an estimate because, at that point, the job hasn’t begun, nor did anyone move forward with it. However, when you receive or give out a quote, the other party may attempt to negotiate the quote. However, as we’ve said, once the deal is struck – the quote is no longer subject to change if everything proceeds according to plan.
3. Quotes Are Legally Binding
Once you sign on the dotted line – it’s done. The contract for a quote is legally binding, and neither of the parties involved can no longer back out under the normal circumstances.
As you can see, the difference between the two is quite obvious. Hopefully, we’ve done a good job explaining that to you.