Charging for Estimates: When and How to Do It

What is a free estimate?

A free estimate doesn’t include much detailed information—often just a description of the service, company and client details, and the total cost for the job. Think of it as a ballpark number for a straightforward service, like mowing a lawn or walking a dog. 

Free estimates typically don’t require a ton of work on the contractor side beyond a site visit. And because they’re typically not legally binding unless they include specific elements—like being in writing, clearly outlining what they do and don’t cover, and having a place for the client to sign—many can be provided without having to view the property at all. 

Since free estimates are basic price ranges, they can change based on job scope, materials, labor, and other factors. 

You can provide them to customers over the phone, in person, or through email.

What is a paid estimate?

A paid estimate is when you charge the client to provide them with a cost breakdown for a potential project. 

Paid estimates usually include more detailed information than free estimates, such as:

• A description of the project scope
• Labor, equipment, and material costs
• A timeline for when the work will begin and end
• Additional costs like subcontractor fees, travel expenses, or any permit or licensing fees
• A contingency amount to cover any unexpected costs
• Guarantees or warranties
• Expert recommendations for the job based on the client’s pain points, like the best wood for their fence or which tile would suit their bathroom renovation budget
• Payment terms and disclaimers
• A more accurate price based on specific numbers for labor, materials, etc.

Paid estimates are usually provided in person or via email and include multiple pages. Often, follow-up meetings or calls are scheduled so they can be reviewed with the client.

Watch this video to learn how to write an estimate terms and conditions:

1. Decide on a price

Before you do anything else, you need to choose how much to charge for your estimates. Will it be your hourly rate, a percentage of the estimate, or a flat fee? Will you charge every client for estimates, or only when the job is over a certain amount? 

Just like setting pricing strategies, charging for estimates requires upfront effort to ensure it goes smoothly. Take your time, review competitors, and consider what’s fair and reasonable to the client.

2. Choose how the fee will be handled

If a client does choose to work with you based on your paid estimate, you need to decide how their payment will be handled. 

For example, will the amount be deducted from their final bill, like a deposit? Or are you billing it as a separate fee outside of the services you’ll provide? 

Make sure to have a plan for what you’ll do with paid estimates before you start charging them to avoid confusion and disputes later on.

3. Communicate with clients

Before you charge a client for an estimate, you need to let them know. Don’t schedule a job visit or consultation until you’ve made the customer aware of the fee and they’ve approved it. 

Outline the fee, including the total, when it’s due, and what it’s for, in writing, either through email or a physical document, and have the client acknowledge it before moving forward. That way, you’ll have a paper trail if the client disputes it down the road, or refuses to pay it altogether. 

Remember to explain to the customer why you’re charging for an estimate. Since many estimates are free, they may be confused about why they have to pay for yours. 

Let them know your reasoning and highlight the value that a detailed estimate brings, like more accurate pricing, expert advice, and a timeline, which will help them to make an informed decision.

4. Include fee details in your estimate

When you send your estimate, include a term that states the client agrees to pay the estimate whether or not they decide to move forward with the work and have the client sign it. 

This will give you additional legal protection and ensure the client understands their responsibility to compensate you for the estimate, whether they move forward with the work or not.

5. Send an invoice

Just because a paid estimate isn’t the same as a job doesn’t mean you don’t need to invoice the client for it. Provide them with a bill that outlines what they’re paying for, how much it costs, and when and how to make a payment. 

Use invoicing software like Jobber to create custom invoices in minutes that include your branding to impress customers and boost your professionalism.

1. Filter clients

Charging for estimates is a good way to weed out noncommital clients who aren’t ready to sign a contract. Serious clients usually don’t mind investing in projects upfront, especially if the estimate fee will be deducted from their final invoice.

2. Get paid for your time

Complicated or custom estimates take time, and that cuts into paid work you could be doing. Instead of working for free, charging for estimates ensures you get paid for the time you put in, whether the client chooses to move forward with a contract or not.

3. Manage cash flow

Because charging for estimates ensures you have money coming in even if a site visit doesn’t result in a job, it helps improve cash flow. That way, you don’t end up spending all your time quoting jobs for free with no return on investment.

4. Improve your estimating process

Having a plan for how to handle your estimate process makes it easier to allocate resources, schedule time, and streamline your workflow. 

When you know which estimates to charge for and which ones to provide for free, it gives you a plan to follow for each one, so you understand exactly how to handle each new lead that reaches out. 

Then, use field service management software like Jobber to guide them through the funnel from initial outreach to paying customer.