Estimating & Proposals

How to create an estimate

To create an estimate, list all required materials, labor, equipment, and overhead costs for the project, then calculate a total price with a clear breakdown for the client. Include scope details, payment terms, and any exclusions to avoid misunderstandings. An accurate, well-documented estimate sets expectations for both contractor and client.

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As a contractor, estimating can feel like a balancing act—too low and you eat the costs, too high and you lose the job. Many contractors waste hours on estimates that clients never accept or run into disputes because of vague details.

Understanding the Details

Key Components of a Contractor Estimate

  • Contact Information: Your business name, license, and client details.
  • Project Scope: Detailed description of the work to be done, including materials and methods.
  • Line-Item Costs: Breakdown of materials, labor, equipment rentals, and subcontractor fees.
  • Timeline: Estimated start and completion dates.
  • Payment Schedule: Clear milestones or deposit requirements.
  • Terms and Exclusions: Specific legal terms, warranty info, and items not included.

Example of Estimate Breakdown

  • Materials: $3,500 (lumber, drywall, paint)
  • Labor: $2,000 (80 hours at $25/hr)
  • Equipment: $400 (scissor lift rental)
  • Overhead & Profit: $1,100 (15%)
  • Total Estimate: $7,000

Common Mistakes to Avoid

  • Leaving out permit fees or disposal costs
  • Vague project descriptions
  • Not specifying what’s excluded (e.g., customer-supplied fixtures)

Practical Steps

  1. Gather project details: Meet with the client, take measurements, and clarify expectations.
  2. List all tasks and materials: Write out everything needed, down to fasteners and consumables.
  3. Get accurate pricing: Use supplier quotes and recent job data for labor and materials.
  4. Calculate totals: Add line items, include markup, and double-check math.
  5. Detail your estimate: Use clear language, itemize costs, and define scope and exclusions.
  6. Review with the client: Walk them through each line, answer questions, and document any changes before they sign.
  • Tip: Save your estimate templates for similar future jobs to speed up the process.
  • Tip: Always include your business license info and insurance details to boost credibility.

How EZcontractPRO Helps

Many contractors use EZcontractPRO to automate their estimating process, generate clear line-item breakdowns, and reduce costly mistakes. The system speeds up estimate creation while keeping everything organized for future reference.

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Frequently Asked Questions

What should be included in a contractor estimate?
A contractor estimate should include your business and client information, a detailed scope of work, itemized costs for labor and materials, timeline, payment terms, and clear exclusions or conditions.
How do I avoid underestimating a project?
Account for all possible costs, pad labor hours for unforeseen issues, and review past jobs for common overruns. Always double-check with suppliers for up-to-date pricing.
Can I change an estimate after submitting it?
You can revise an estimate if the project scope changes, but always document modifications and get client approval in writing to avoid disputes.
How detailed should my estimate be?
The more detailed your estimate, the less room for confusion or disputes. Itemize every task and material, and clearly state what’s excluded from your scope.
Is software necessary for creating estimates?
While software isn’t required, it streamlines the process, reduces errors, and helps track historical pricing, making it easier to create accurate and professional estimates.

Contractor Community Q&A

Real questions from contractors like you, answered by experts and peers.

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Carlos M. Electrician • Phoenix, AZ

What's the best way to handle estimates when I don't know exact material costs until I open up the walls?

31 found helpful 2 answers
EZcontractPRO Team Official

Use allowances! Give a budget range for the unknown portion (e.g., "Electrical rough-in: $800-1,200 allowance, final based on actual conditions"). This sets expectations and protects your margin.

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Maria G.

I always add 15% contingency for remodel work. Clients understand old houses have surprises. Just explain it upfront.

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Mike R. General Contractor • Austin, TX

How detailed should my estimates be for residential remodels? I've been doing simple one-line quotes but wondering if I'm losing jobs because of it.

23 found helpful 2 answers
EZcontractPRO Team Official

Detailed estimates almost always win more jobs. Clients feel more confident when they can see exactly what they're paying for. Try breaking down by room or phase - it also protects you if scope changes mid-project.

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James P.

I switched to itemized estimates last year and my close rate went up about 20%. Takes more time upfront but worth it.

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Sarah K. Kitchen & Bath • Denver, CO

Do you guys include labor as a separate line item or bundle it with materials? Clients keep asking me to break it out.

18 found helpful 1 answers
Construction Coach Expert

I recommend showing labor separately for transparency, but bundle it if you're worried about clients nickel-and-diming your hourly rate. Either way, be consistent across all your estimates.

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