Underquoting is the most common reason trade projects end up losing money. The quote looked sensible on paper, but by the time the project wrapped up you had spent more hours than calculated, material prices had risen, and the customer had gotten "just one extra thing" along the way — without extra payment. The result: you effectively worked below your cost price.
The good news is that underquoting almost always comes down to the same five mistakes — and all five can be fixed with better estimating habits. This guide goes through them one by one.
Contents
- How do I avoid underquoting my bids?
- Mistake 1: You don't know your real hourly cost
- Mistake 2: You forget the hidden hours
- Mistake 3: Materials without margin or price reservations
- Mistake 4: No buffer for the unforeseen
- Mistake 5: Extra work without written agreement
- Post-calculation: learn from every project
- FAQ
How do I avoid underquoting my bids?
You avoid underquoting your bids by doing five things consistently: (1) estimate using your real hourly cost including all fixed expenses — not just your wage, (2) include the hidden hours like driving, measuring up, ordering and clean-up, (3) add a margin on materials and reserve against price increases, (4) add a 10–15% buffer for unforeseen conditions, and (5) always agree on extra work in writing before doing it. Then follow up with a post-calculation on every completed project so your next quotes get more accurate.
Let's take the mistakes one at a time.
Mistake 1: You don't know your real hourly cost
Many tradespeople set their hourly rate based on "what the others charge" — not on what it actually costs to run their business. Your real cost per hour has to cover much more than your wage:
- Wages incl. holiday pay, pension and social contributions
- Van, fuel, insurance and tools
- Office, phone, software and accountant
- Sick days, public holidays and non-billable time
A rule of thumb: out of a 37-hour work week, few can bill more than 25–30 hours. Divide your total monthly costs by your billable hours — not your working hours — and you get your real cost price. Then add your desired margin on top. If the result is above "what the others charge", the calculation is the one that's right.
Mistake 2: You forget the hidden hours
A quote for "3 days of work" often only covers the time with tools in hand. But the project also costs you:
- Site visit and measuring up before the quote
- Ordering and collecting materials
- Driving to and from the site — every day
- Setting up, covering and daily clean-up
- Waste disposal and handover
- Customer dialogue along the way
Hidden hours typically make up 15–25% of total time on smaller jobs. If you track your time per project, you can see your own actual number — and estimate with it instead of guessing.
Mistake 3: Materials without margin or price reservations
If you pass materials on at purchase price, you earn nothing for fronting the cost, ordering, transporting and guaranteeing them. The industry standard is a margin of 10–20% on top of your purchase price (after your builder's merchant discount).
At the same time, add a reservation for price increases to the quote if there is a long gap between quoting and execution — e.g.: "This quote is based on current prices and is valid for 30 days." That way you are not left holding the bill when the price of timber or steel rises before you start.
Mistake 4: No buffer for the unforeseen
Hidden rot in the woodwork, crooked walls, an installation not done by the book — renovation almost always brings surprises. If you estimate without a buffer, you pay for them yourself.
Add 10–15% on top of your calculated hours on renovation jobs (less on new builds, more on older properties). And scope the quote clearly: state what is not included — e.g. "any repair of hidden damage is settled as extra work by agreement". That makes the customer conversation easy when the surprise shows up.
Mistake 5: Extra work without written agreement
"While you're here anyway, couldn't you just…" — that sentence has cost tradespeople millions. Small tasks done without an agreement rarely get invoiced, and when they do, they often end in dispute.
The rule is simple: no extra work without written acceptance — a text message with price and scope is enough. It takes two minutes, protects the customer relationship and ensures you get paid for all the work you actually do.
Post-calculation: learn from every project
The most important habit of all: when the project is finished, compare the actual hours and material costs against the quote. Did you land 20% over on hours? Then you know exactly what to adjust in the next quote for a similar job.
That requires hours and materials to be logged per project — not in a notebook, but in a system where the numbers can automatically be held up against the quote. After 5–10 projects with post-calculation, most people quote noticeably more accurately.
Base your estimates on your own numbers
With Svendetid you create quotes with AI-based estimation, log hours and materials directly on the project, and see in black and white whether the quote held up. Try it free for 14 days — no commitment.
See Svendetid →FAQ
How do I avoid underquoting my bids?
Estimate with your real hourly cost (all expenses divided by billable hours), include hidden hours like driving and clean-up, add 10–20% margin on materials, add a 10–15% buffer for unforeseen conditions, and require written acceptance of all extra work. Then post-calculate every project so you continuously adjust your experience-based numbers.
How big a buffer should I put in a quote?
10–15% on ordinary renovation jobs is a good starting point. On older properties or jobs with many unknowns, 20% can be reasonable — on new builds and routine work it can be smaller. Alternatively, scope the quote tightly and settle the unforeseen as extra work.
Should I quote a fixed price or work on time and materials?
A fixed price wins the job more often but puts the risk on you — so it requires accurate estimation and clear scoping. Time and materials moves the risk to the customer but requires trust. A middle ground is a fixed price on the well-defined work and time and materials on the unforeseen.
What do I do if I have already submitted a quote that is too low?
An accepted quote is binding, so you cannot simply raise the price. Deliver what was agreed professionally, but make sure everything outside the quote's scope is settled as extra work with written acceptance — and use the post-calculation to price the next job correctly.
How much margin should I add on materials?
10–20% on top of your purchase price is the industry standard. The margin covers your time for ordering and transport, your outlay and your guarantee for the materials. Also remember a reservation for price increases if execution is months away.
Accurate quotes start with accurate numbers. Track hours per project, post-calculate, and let every finished project sharpen the next quote — Svendetid combines quotes, time tracking and post-calculation in one app, built for Danish tradespeople.