How to Write an Estimate

To write an estimate, break down material costs, labor, and other expenses into clear line items that your client can easily understand. Contractors and service-based businesses should start by gathering project details, such as scope, site conditions, and client requirements, then calculate accurate costs, add markup for profit, and set payment terms. The estimate should also include a realistic project timeline and be formatted with your business details, logo, and client approval section.

Gather Project Information

Before writing an estimate, collect as much information as possible about the project. This includes:

• Scope of work – What exactly will be done? (e.g., roofing replacement, plumbing installation, landscaping)
• Client requirements – Any special materials, finishes, or deadlines.
• Site conditions – Location details, accessibility, and potential challenges.
• Permits or inspections – Whether local authorities require approvals.

For example, if you’re a roofing contractor, you’ll need to know the roof size, type of shingles requested, and whether old shingles must be removed.

Break Down Costs into Line Items

A good estimate is detailed, not vague. Break costs into categories like:

Total Estimated Cost = $5,400

This breakdown gives clients clarity and reduces the risk of disputes later.

Factor in Markup and Profit

Every business needs to account for profit and overhead (utilities, insurance, admin costs). Add a percentage markup—commonly 10–20%—on top of costs.

For example:

• Total costs: $5,400
• Markup at 15%: $810
• Final Estimate = $6,210

Being upfront about markup helps you maintain healthy margins.

Include Payment Terms

Don’t just list the cost—outline how and when payments should be made. Common approaches include:

• 30% upfront deposit, 40% during project, 30% upon completion.
• Full payment within 15–30 days after project completion.

Clear payment terms reduce cash flow issues and protect your business.

Set Timeline Expectations

Add details on when the project will start and how long it will take. For example:

• “Project to begin within 2 weeks of signed approval.”
• “Estimated completion time: 5 business days (weather permitting).”

Timelines prevent misunderstandings and help clients plan ahead.

Write in a Professional Format

Present your estimate in a structured document that looks professional:

• Include your business name, logo, and contact details.
• Number your estimates for tracking (Estimate #101, #102, etc.).
• Date the estimate and specify how long it’s valid (e.g., “Valid for 30 days”).
• Add a client acceptance line for signature and date.

Professional formatting shows clients that you take their project seriously.

Review and Send the Estimate

Before sending, double-check for errors. A typo in pricing or missing line item can hurt credibility. Then, send via email or present it in person, depending on the client’s preference.

Tip: Following up a few days later often helps close deals faster.

Bonus Tip: Use DepositFix to Create Free Estimates

Instead of creating estimates manually in Word or Excel, use the DepositFix free estimate generator to:

• Automatically calculate totals and taxes.
• Save client details for faster repeat estimates.
• Convert approved estimates directly into invoices.

This saves time, reduces errors, and improves client experience.