5 Ways Small Businesses Lose Money on Quotes

Most small businesses don't lose money because of bad work. They lose money because of bad quoting. A quote that's too vague, too low, or too unprofessional can cost you thousands in lost revenue or wasted time.

Here are five of the most common quoting mistakes and how to fix each one.

1. Underestimating materials and labour

This is the biggest one. You quote $30,000 for a job, but halfway through you realise the materials cost more than you budgeted for and the work took twice as long as expected. Now you're either eating the loss or having an awkward conversation with the client about extra costs.

How to fix it:

• Always do a proper site visit before quoting
• Get actual supplier prices for materials, don't estimate from memory
• Add a 10-15% contingency buffer for unexpected issues
• Track how long similar jobs have taken you in the past
• If you're not sure, quote higher. You can always negotiate down, but you can't easily go up

2. Not including payment terms

You finish the job, send an invoice, and then wait. And wait. Three months later, the client still hasn't paid and you have no written agreement about when payment was due.

Without clear payment terms on your quote, you have no leverage. The client can always say "I didn't know it was due so soon."

How to fix it:

• Include payment terms on every quote: deposit amount, milestone payments, final balance due date
• Common terms for construction: "50% deposit on acceptance, balance within 7 days of completion"
• For larger jobs, break payments into milestones tied to deliverables
• State consequences for late payment (e.g. "Interest of 2% per month on overdue amounts")
• Get the client to sign or acknowledge the quote before starting work

3. Vague descriptions that lead to scope creep

"Renovate kitchen" means very different things to different people. To you, it might mean new countertops and a coat of paint. To the client, it might mean ripping out everything, moving the plumbing, and installing new cabinets.

Vague scopes lead to scope creep, where the client keeps adding "small" requests that weren't in the original quote. Each one seems minor, but together they can add days of extra work.

How to fix it:

• List every task as a separate line item with clear descriptions
• State what's included and what's excluded
• Use a "variations" clause: "Any work not listed above will be quoted and approved separately"
• If the client asks for extras during the job, stop and quote them before doing the work
• Take photos of the site before starting so there's a clear record of the original condition

For a detailed breakdown of what to include, read our guide to writing construction quotes.

4. Forgetting VAT

If you're VAT registered and you forget to add VAT to your quote, that 15% comes straight out of your profit. On a $100,000 job, that's $15,000 you've lost.

Even if you're not VAT registered, you need to be clear about it. Clients who are VAT registered themselves will want to know whether your prices include VAT so they can claim input tax.

How to fix it:

• If you're VAT registered, always show VAT separately on quotes: subtotal, VAT (15%), total
• If you're not VAT registered, state it clearly: "Not VAT registered. Prices exclude VAT."
• Use software that calculates VAT automatically so you never miss it
• Check our guide on adding VAT to invoices for more detail

5. Sending unprofessional documents

First impressions matter. If you send a quote that looks like it was typed in 5 minutes on a phone, the client questions whether you'll take the same shortcuts on their job.

Unprofessional quotes include:

• WhatsApp messages with a lump sum number
• Handwritten notes or scraps of paper
• Word documents with misaligned columns and no company branding
• Missing company details, no quote number, no dates

How to fix it:

• Use a consistent template with your company name, logo, and contact details
• Include a unique quote number on every document
• Send quotes as PDF, never as editable Word files
• Include your banking details so the client knows exactly how to pay
• Brand your documents so they match your company identity

The bottom line

Every one of these mistakes is fixable with better processes. You don't need to spend hours formatting documents or remembering to add VAT manually. That's exactly the kind of admin that should be automated.

Need help with pricing? Read our guide on how to price a construction job. Already sent the quote and waiting for payment? Here's how to get clients to pay on time.

EasyNest was built for this. It handles quote numbering, VAT calculations, payment terms, line items, and PDF generation automatically. You fill in the details, and it produces a professional branded document in seconds.

It's free to start, with no credit card required. Create your first quote here.