Video

How to prepare a quote Te āhua o te whakarite whakatau utu

Preparing a quote is about more than just the price tag. Learn what you need to do, including adding any materials, labour, time, and any extras. It’s important to get them right – for you and your client.
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Source: business.govt.nz YouTube

Video transcript: How to prepare a quote.

[Audio/Visual: Upbeat music starts playing with blue introduction screen with white business.govt.nz logo. The word “presents” in smaller, thinner lettering is beneath the logo. These words disappear and are replaced with white text “Tips for tradies e-learning series”. These disappear. White text saying “How to prepare a quote” then appear in the centre of the screen.] 

[Visual: The screen changes to a profile shot of the presenter, standing in a garage/tool shed. In the bottom right is the business.govt.nz logo which remains there until the end of the video.] 

So, how much is it going to cost? It’s the big question. Quotes take time to put together, and it's important to get them right - for you and your client. 

[Visual: The screen changes to an upper body shot of the presenter]

They're a great opportunity to build trust, put your best foot forward, and show your client you understand their job and will do it well.

[Visual: White lettering saying “Quoting jobs”, “Proposal package” and “Building contract” appear as a list on the right side. These disappear after 5 seconds.]  

In this video, you'll learn the process for quoting for individual jobs, developing a construction proposal package, and when you need a building contract. 

Now, most people think it's all about the price tag, but actually it's more than that. 

[Visual: The screen changes to a profile shot of the presenter]

You want your client to understand your business so that they trust you'll do a good job. So include things like who you are, your business history and positive client reviews. 

[Visual: The screen changes to an upper body shot of the presenter]

If you need help getting started, Business.govt.nz has a free template you can use which is linked below.

[Visual: The screen changes to a profile shot of the presenter]

So, let’s talk about three common ways you can quote a job:

[Visual: The screen blurs to a semi-opaque white background and a blue arrow appears on the left side of the screen with the title “Fixed price” above it and to the right. Next to the arrow, a blue circle appears with “Labour costs” next to it and a plus sign below it. A second blue circle appears under the plus sign with “Materials costs” next to it and a plus sign below it. A third blue circle appears under the plus sign with “Overheads” next to it and an equals sign below it. A pink circle appears under the equals sign with “Total price” next to it. The right side of the screen shows an infographic of a man climbing a ladder while holding a hammer and another man in high-vis pointing at the ladder]

  • A ‘fixed price’ is when you quote the total price for the job with labour costs, material costs and overheads built in. 

[Visual: A plus sign and a blue dotted outline of a circle with “Changes” next to it appears below the pink circle with “Total price” next to it]

  • A ‘fixed price plus’ quote means you still quote the total cost for the job but it also builds in room for changes. For example, if your client hasn’t finalised their design yet, you can provide a provisional cost based on the information available and adjust and confirm it once the scope is clear.

[Visual: The screen changes to a white semi opaque background with the title “Cost reimbursement or labour-only”. A blue arrows pointing upwards shows on the left side of the screen. Two blue circles appear next to the arrow, one above the other. The top circle has “Actual work costs” written next to it and a plus sign below, and the second blue circle has “Actual material costs” and an equals sign below. A pink circle appears below the equals sign with “Invoice in stages or monthly” written next to it. An infographic shows on the right side of the screen over a man in a digger with another man standing next to it holding a pen and clipboard]

  • Lastly, a ‘cost reimbursement or labour-only’ quote provides an estimate, rather than a fixed quote like the two above, and you charge for actual costs of your work and materials, rather than a fixed price. This kind of quote is mostly used when the scope of the job can’t be worked out exactly in advance - because of time constraints or material costs changing quickly. You decide how often to invoice - for example you may choose to invoice based on project stages or monthly - and then gather costs for each invoice and send them to the client to pay.

[Visual: Infographic pops up briefly of a man holding an invoice on the right side of the screen. The left side shows an infographic of a stack of coins]

[Visual: Screen changes to an upper body shot of the presenter]

Whatever approach you choose, make sure your quote includes:

[Visual: Text “Time” shows up briefly on screen]

  • Time - How long the project will take. 

[Visual: Text “Labour” shows up briefly on screen]

  • Labour - What you’ll charge for your work.

[Visual: Text “Materials” shows up briefly on screen]

  • Materials - The cost of all the supplies you will use, including all fixtures and fittings.

[Visual: Text “Subcontractor” shows up briefly on screen]

  • Subcontractor costs.

[Visual: Text “Extras” shows up briefly on screen]

  • Extras - like consent or permit fees and admin costs.

[Visual: Text “GST” shows up briefly on screen]

  • GST; and

[Visual: Text “Terms & Conditions” shows up briefly on screen]

  • Terms & Conditions - especially payment terms such as when you will invoice.

[Visual: The screen changes to a profile shot of the presenter]

You may also want to build your markup into the quote which will be your profit. 

[Visual: The screen changes to an upper body shot of the presenter and a graphic displays briefly of the thumbnail for the “How to price a job” video and a mouse cursor click on it]

If you don't know how to calculate your markup or labour costs, watch the “How to price a job” video.

[Visual: The screen changes to a man and woman with hardhats on a building site. Both people are looking at a booklet that the man is holding while the woman points at this]

When you're quoting the job, try and get as much detail as possible. 

[Visual: The screen changes to a man with a yellow hardhat and high-vis jacket holding a clipboard on a building site with the framing for a house. The man looks around and writes notes on the clipboard. He is standing behind a table which has a laptop, level, gloves, safety glasses, and a circular saw sitting on it]

Visiting the job site if you can so you know what the requirements are-

[Visual: The screen changes to a woman in a high-vis jacket standing on a building site and tapping on an iPad]

-plus you might spot issues that could get missed in photos. Write notes, take photos, get correct measurements and -

[Visual: Screen changes to changing to a man in high-vis using a tape measure on a wall]

-get a feel for what material and finishes the client is after. 

[Visual: The screen changes to show a man with a yellow hardhat at a building site typing on a laptop. There is scaffolding and rope in the building site]

You might even want to send an email summarising the job to make sure you've got it right before you cost it. 

[Visual: the screen changes back to a profile shot of the presenter]

If you’re unsure about quoting a job, consider hiring a quantity surveyor to estimate material, labour and service costs. You can build their fee into your quote so that you’ll get that money back if you get the job.

[Visual: The screen changes to an upper body shot of the presenter]

If your residential quote is more than $30,000 including GST you must have a building contract. To do this:

[Visual: Two graphics show up on the left side of the screen. One graphic shows a white outline of a clipboard and pen, the other shows a piece of paper with a dollar sign in the middle, with a small tick in a circle on the bottom right. The right side of the screen shows the text “Disclosure Statement and Consumer Protection Checklist”][SD1] 

Firstly, give your client a Disclosure Statement and a Consumer Protection Checklist before you sign the contract. You can find this on the building.govt.nz website, and we've linked these below.

[Visual: The previous graphics and text disappears. A new graphic with a white outline of a piece of paper and a pen displays on the left side of the screen. The right side of the screen shows the text “Building contract”]

Second, you need to have a Building contract, agreed and signed with the client. This helps to protect both you and your client and keeps everyone on the same page about who’s doing what, at what cost, and what will happen if the job changes or things go wrong.

[Visual: The graphics and text disappears from the screen. The screen changes to a wide body shot of the presenter]

Standards New Zealand have some Building Contract templates on their website that you can use to cover everything properly but in easy-to-understand language. 

[Visual: The screen changes to an upper body shot of the presenter]

There are different templates for different projects, so choose the one that's best for your project. To make it easy to find, we've linked them below. 

[Visual: The screen changes to a wide body shot of the presenter]

A couple of things to watch out for: knowingly leaving info out of a Disclosure Statement, or putting false information in can result in a fine: up to $50,000 if you’re a sole-trader or $150,000 for a company. 

[Visual: The screen changes to an upper body shot of the presenter]

And the Consumer Protection Checklist must be sent to the client as is. You can’t add your logo to it or change it in any way.

If your job is less than $30,000 including GST you don’t legally have to have a Building Contract but it's still a good idea to have one to make sure everything is clear. 

[Visual: The screen changes to a wide body shot of the presenter. A graphic shows with an outline of a contract with text and a pen on the right side of the screen, followed by an outline of a clipboard and pen on the left side of the screen and a piece of paper with a dollar sign in the middle and small tick in a circle on the bottom right bottom right also on the left side of the screen]

If you do decide to have a contract for a job that’s less than $30,000 including GST, then you must provide a Disclosure Statement and Consumer Protection Checklist if your client asks for them. Remember, the same rules apply as before - you can’t make any changes to them.

[Visual: The screen changes to an upper body shot of the presenter]

So there you go. Remember quoting is not just about the numbers - it’s about giving your client confidence that you’ve thought everything through and you’re the one for the job. 

[Audio / Visual: Upbeat music plays while a blue outro screen appears with the business.govt.nz logo in the centre of the screen. This logo disappears and the Ministry of Business, Innovation, and Employment logo appears on the left-hand side and the Te Kāwanatanga o Aotearoa, New Zealand Government logo appears on the right-hand side.] 

[Video ends]

learning resource

Construction proposal package template

Use this template to create a construction proposal that you can send straight to your clients.

Construction proposal package template

How to use the construction proposal template

You can use this proposal package template as a framework when you put together quotes for potential clients. To use it, simply add in your business details to each section. Save it as a template on your computer and customise for each client.

We’ve provided suggestions in each section, but you can remove, add or change details as relevant to your business – including the cover picture and colour scheme – to suit your brand.

All placeholder text that is greyed out or contains XX should be changed or removed by you before you send your proposal to clients.

Building contract requirements

If your residential building work is going to cost $30,000 or more (including GST), there are three documents you must provide to your client:

  • a disclosure statement
  • a consumer protection checklist
  • a building contract.

You can use the free building contract template from Standards New Zealand.

Links to the disclosure statement and consumer protection checklist are below.

Housing, alterations and small buildings contractStandards New ZealandPrescribed disclosure information Section 362D, Building Act 2004 [PDF,88KB]Building PerformanceConsumer protection checklist [PDF, 59KB]Building Performance

Implied warranties

All residential building work is automatically covered by implied warranties for up to 10 years, regardless of:

  • the cost of the project
  • whether you have a contract or not
  • whatever any contract says.

Implied warranties cover almost all aspects of your work, from Building Code compliance, to good workmanship, to finishing the job in good time. They apply to subcontractor work as well as your own.

As well as the implied warranties, there is a defect repair period of 12 months, starting from the date the building work is complete.

You’ll need to fix any problems or replace any faulty fittings or products within a reasonable timeframe from receiving written notification.

It’s a good idea to do regular progress checks with your customer and correct as you go, rather than have issues to sort out at the end, so factor this into your quote package and business pitch. It’s a good way to show customers you care about the work you do.

Implied warranties and defectsBuilding Performance

Retention money requirements

When you have a construction contract and use subcontractors, you can hold back some payments – called retention money – until they finish the job. 

This is to make sure they do a good job.

If you choose to hold back the money, you must follow some reporting and financial requirements.

Find out more on the Building Performance website.

Retention money requirementsBuilding Performance

Want to know more tips for tradies?