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Invoicing. It’s a hassle. But no matter what trade you’re in, it has to be done… but, what should you include when creating your invoice?

Here are our top tips on what you should include on your trade invoices.

These are things you must include on your invoice:

1. 1. You must include the date for the invoice and a unique invoice number — These will help you at the end of the year with your tax return and if you ever need to find a particular invoice. These must follow on from one another (e.g. ABC1, ABC2, ABC3 etc…), and if one is spoilt or cancelled, it has to be kept as a record for HMRC.

1. 1. Your business name and address — this probably seems obvious, but you’d be surprised at how many tradesmen forget this.

1. 1. The name and address of the person you’re invoicing — again very obvious, but worth remembering.

1. 1. A list of products and services you provided — line by line and the cost of each of these. Not only is this a requirement, but it can help if your customer disputes the price, as they get all the information.

1. 1. Total amount of the invoice — because you need to show the price, right?

1. Terms of payment for the invoice — for example if your customer pays in one lump sum, or week by week. This again is especially helpful if you have problems getting payments from customers.

These are things that we think you should include on your tradesman invoice:

• Company email address, everything is online these days, and it looks far more professional to have a dedicated email for your business.
• Your payment details, bank details/online payments etc… You might still deal with checks so this may not apply to you, but it can save a lot of doubling up if you provide the information straight away for customers.
• Due date of payment – again this can help with late payments and customers not knowing a payment schedule.
• Logo and presentation. So these aren’t technically things to include. But they are an important part of presentation for you and your business. And they also make it more likely (along with your good work of course) for customers to recommend you – as you look professional all round.

We’re proud and excited to announce that YourTradebase has now helped our customers create, send and win more than £50,000,000 worth of quotations and estimates.

50,000,000.

50 million.

50 with 6 zeros.

Yikes!

When we started building YourTradebase we had a simple goal: help people who run trade and service businesses tame their paperwork and run more efficiently.

We knew YourTradebase could help with that. What we didn’t expect was how much that help would be worth for our customers.

To our customers: Thank you. We hope you continue winning more work in 2017 and beyond, and that we can continue to be a part of your success.

Should you be sending quotes or working out estimates? Providing a fixed quotation for the cost of work or estimating all the costs? Estimates vs. Quotes – what’s the difference and which should you use…?

Odds are that as a tradesperson or small business, you spend a good deal of your valuable time writing out estimates or quotes for potential new customers.

However, there can be a lot of confusion between the two.

Contrary to what you might think, there is a world of difference between providing a quote and giving an estimate.

So, the question is: Do you know the important differences between an estimate and a quote?

Quotes vs. estimates explained

For small businesses which provide any kind of service (rather than a set price product as shops do) providing customers with an idea of what they can expect to pay for a particular job is a fact of life.

It can be a time-consuming, thankless job – especially if you’re not all that comfortable with putting pen to paper in the first place.

Understanding the difference between quotes and estimates, using the right one at the right time and making sure they have all the necessary information is critical.

We’ve written this simple, easy to understand guide to estimates vs. quotes to help you out –  here’s what you’ll learn:

• What the differences are
• When to use an estimate and when to give a quote
• Why it matters
• Important details you need to include

You’ll also find the answers to the most frequently asked questions about estimates and quotes.

What’s the difference between an estimate and a quote?

The first thing to understand about quotes and estimates is that they are NOT just two different names for the same thing.  Estimates and quotes each have distinct uses, benefits & disadvantages. Knowing these is key to avoiding problems that can cost you time, customer goodwill and even money.

Let’s look at estimates, first:

What’s an Estimate?

An estimate is basically a ‘guesstimate’ or rough, educated guess based on what a job MAY cost. Often it is supplied either before you know all the details of a particular piece of work (such as during an initial call from a prospective new customer) or during a site visit.

Estimates are your first thoughts on costs and can change drastically when you get further information, when unexpected complications crop up during the work or the scope of what you have been asked to do increases.

Key point: An estimate is an informal idea of price based on limited information. Consider it a starting point in terms of costs, which can go up (or down). Estimates CANNOT be used as a legal standpoint for price.

For example, let’s imagine that you’ve been asked to plaster an average size bedroom.

Mrs. Smith calls to ask about the cost of skimming her spare bedroom. She doesn’t have exact measurements but says it’s ‘average sized’. In addition, she mentions that there’s still some old wallpaper in place that needs removing.

Hence your estimate might look like this:

What’s a Quote?

A quote (or quotation) is an exact price for the job being offered. As such it is fixed and CANNOT be changed once it has been accepted by the customer (unless the customer changes the amount/type of work required or you discover something completely outside of the scope of what was agreed).

Quotes are only issued after an onsite visit or where you are confident that you have established exactly what is needed.

Key point: It’s important to remember that quotes are presented formally and represent a contract between you and the customer. As such they can be used as legal standpoints for price should a dispute arise.

Understandably, quotes give customers peace of mind; safe in the knowledge that they know exactly how much the work will cost before the job begins.

In our example with Mrs. Smith, following a visit to her home, you might have discovered that her spare bedroom is larger than average and that there is a substantial amount of old wallpaper that will take a bit longer to remove that you initially thought.

As such, you can see from the example below that your written quote has more detail and is a much more accurate reflection of the true cost of the work needed (in this case adding another £75 to the price) :

Estimate or Quote? Key Points to remember…

• Estimates are a rough idea of price. They should be used as an initial GUIDE PRICE ONLY.
• Quotes are legally binding and should ONLY be used when you are certain of the costs involved.
• NEVER label a written estimate as a ‘Quote’ – You can be held to the figure provided.
• ALWAYS ensure that the customer understands whether they are getting an estimate or a quote.

Frequently asked questions about estimates vs. quotes

Understanding the difference between an estimate and a quote is just the first step on the road to realising the potential of making both work harder for you. Admin and enquiries take up valuable time, so we’ve detailed some of the most commonly asked questions about estimates and quotes below. These not only expand on certain elements and why they are important but also give a few helpful suggestions too.

Should I always provide a written estimate or quote?

As the saying goes: verbal agreements aren’t worth the paper they’re written on. Estimates and quotes should always be provided in writing. If a query or problem arises later on it’s a good idea to have something in writing to fall back on – these make resolving any misunderstandings easier. Don’t forget to keep copies of all your estimates and quotes.

Is it OK to handwrite my quotes or estimates?

While handwritten documents are still acceptable you should ensure that these are both readable and professionally presented – nothing turns off a potential client faster than trying to decipher illegible scrawl on a scrap of paper. Your quotes and estimates should be a reflection of the level of professionalism your customers can expect from your services. Always use headed stationery with your business name and full contact details included. Anonymous blank paper makes customers nervous about the validity of your business.

What details should I include in my estimates or quotes?

Always make it clear whether you are providing an estimate or a quote, as in the examples above.

Since estimates are rough approximations of cost they should be reasonably clear but don’t have to be as detailed as a quote. Describe the job clearly in general terms. Estimates should always include a disclaimer that the price is subject to change depending upon a more detailed quote being prepared.

Once you have a better idea of exactly what’s involved then a detailed quote should be supplied. Be as specific as possible, including:

• The customers details and the address/location of the work to be carried out
• A reference number (if needed)
• The date
• A breakdown of the elements (including labour, materials or special costs)
• An accurate description of what is covered by the quote and (if necessary) what is not
• The total price
• Any VAT element should be detailed. Remember you can only charge VAT if you are registered for VAT with HMRC. You must show your valid VAT registration number on all documents.

Do I need to include my terms & conditions in both?

If you have formal terms and conditions drawn up always include a copy with your estimate or quote. This not only gives your customer with a very positive impression of your business being upfront and honest, it also provides them with information such as your normal payment terms, deposits required, penalties for non-payment, etc.

Do estimates and quotes both need dates?

Dating estimates and quotes helps you determine exactly when you prepared them. However, it’s also a good idea to specify the period for which your estimate or quote is valid for – Normally, this can range from 30 to 90 days after the date on the document, depending on your business or preference. Fees and costs naturally increase over time so setting a limit on how long your price is good for protects you from being caught out by old estimates or quotes which are now unrealistic.

Is your head still in a spin over quotes and estimates?

It’s easy to join the 1,000’s of small businesses that benefit from YourTradebase – the online tool that makes it simple to create (and manage) all your quotes and estimates in one place. 

Why not try our completely free trial, and see for yourself?

No matter who you are or what your business does, marketing is an essential tool to help you grow. For tradespeople and those in the service industry, traditionally the best method of finding work has been through word of mouth. This is a very effective marketing tool (yes, that’s right, you may already be marketing without realising it) but it doesn’t mean that you can’t explore other avenues for getting more work.

Developing a comprehensive marketing strategy

Marketing is a billion pound industry in the UK. TV and magazine campaigns might be an expense that’s out of your reach but there are effective ways of marketing without spending a fortune. Before you start, you need to think about your strategy carefully in order to develop a more coherent plan.

You need to think about:

• Who is your main client base? Where do they live? What do they do and what is the best way of reaching them?
• How much time and money can you commit to your marketing campaign?
• Can you promote and market your own business or would it be easier to outsource to specialists?
• What are the most effective forms of communication for your particular field.

Once you have answers to the above questions, you will be able to develop a more effective marketing campaign.

The most suitable advertising methods

Depending on your strategy, you will now have to consider the best way to promote or advertise your business. Loosely speaking, advertising can be divided into two groups: traditional and modern. Let’s look at them both individually and the specific methods that they use.

Traditional advertising

With the advent of online marketing there is a debate about the validity of traditional methods. But as you’ll see below, some things never change and sometimes the old ways are still very effective.

Business cards
The simplest forms of advertising are the most effective. This is certainly true of business cards. These are a very effective tool for keeping your business in the minds of the customers, displaying all the essential contact information in one convenient and affordable place. When working on a job, be sure to give your client a few cards for themselves and to pass on to others. Keep a stack handy so that if you do receive any enquiries, you can easily hand over your information.

There are plenty of places where you can get simple, affordable cards printed, with even some online options delivering right to your door.

Leaflets
Big or blanket leaflet jobs can be expensive and time consuming and often rely on luck. You could print out a hundred leaflets and get ten jobs as a result. Or you could spend days trudging round the houses delivering thousands of costly leaflets for nothing.

Leaflets work best when they’re targeted. When working on a job, hit the street where you’re working. Create a leaflet saying that you’re in the area and are available. That way potential clients have an instant connection to you and can ask about your work more easily. People tend not to like ringing up cold from leaflets.

Signs
Putting a sign up outside any job you’re doing (with permission from the client, of course) is surprisingly effective. Effort and outlay is minimal but it’s a good way of getting your name out there locally.

The same goes for vans, t-shirts and merchandise. It all helps to build your brand (more of which later on).

Print advertising
Sticking an ad in the local paper or yellow pages is having diminishing returns but could still be worth the money. Try to target specific publications or look out for local street press, which will often be cheaper than national titles.

Networking
It’s a word that sends shudders down the spine. But networking doesn’t have to be about ‘doing lunch’ and laughing politely at other people’s bad jokes. Buddy up with other local businesses, make friends and offer incentives that mutually benefit. If you’re a plumber, team up with a decorator and offer to share work. These kinds of two-way relationships can be very effective.

Phone numbers
Believe it or not, people do still use the phone to get in touch. So you do have to think carefully about which number you use. The reality is that these days most people only really use their mobiles but having a landline contact always gives off a more professional air. Try to list both and make sure you have an answering service or voicemail so that you don’t miss calls.

Modern advertising

We live in brave new world, where the internet and social media wield incredible power. But it’s power that you can easily use to your advantage.

Websites
There’s no excuse for not having a website. These days you don’t need a computing degree to make one, with plenty of online platforms such as WordPress and Wix that offer easy to use website building. Use templates to create a basic site in minutes – they’ll even take care of the hosting for you – all with one payment. Your site doesn’t have to look like the Apple homepage – you just need to have a simple, clear and easy to use web presence with contact details up front. Load your site with images too, as these are more effective than words. A website is also a handy branding tool.

Keep it fresh, with regular new content. Start a blog, upload pictures and don’t just leave it sitting there. Clients are always put off by sites that look like they’ve been neglected.

Social media
Again, like websites, you don’t need to be running viral marketing campaigns but you do need to have a social media presence. Set up a Facebook account, Twitter and Instagram – post pictures of jobs (with permission), follow people, like posts and generally get your name out there. It only takes a few minutes a day and you can even do it on the move.

Once you get the hang of it or if you’re feeling creative, a funny video or clever idea can get big traction. If it does go viral, it’s marketing gold and costs virtually nothing.

You can also use social media and your website to publicise positive feedback. Letting other potential customers see positive comments about your work has huge marketing potential.

Online tradesmen sites
The online equivalent of word of mouth. Sites like Checkatrade are increasingly used by customers looking to learn more about your reputation. Ignore them at your peril. One bad review can undo the good work of years of happy customers. These sites are not always fair – and some clients will just never be satisfied. But you can always engage with bad reviews and use the platform to your benefit. Publically ask them to explain why they aren’t happy, and offer to resolve the matter. This kind of PR can turn a negative into a positive very quickly.

Any or all of the above marketing tools can be very effective, if used correctly. It may be too time consuming to utilise them all, so you may have to pick and choose your best strategic options.

The power of branding

You might think that branding is only for the big boys. But company logos, colour schemes and merchandise are very powerful tools.

Logos
Design (or have designed) a logo that tells people what you do and communicates the personality of your business. It should ideally have your name and a tagline – so you’ll need to work on your copywriting skills. Remember, ‘every little helps’ so ‘just do it’ because a tagline ‘does exactly what it says on the tin’ – you get the point.

Your logo should also represent quality. This is where a bit of design skill comes in. A tacky, poorly designed logo can seem to indicate a similar lack of quality in your work – even if that is not the case.

Colour scheme
Think Eddie Stobart’s lurid green and red trucks or Dyno-Rod’s bright orange vans. Colours can be very powerful. Try and choose colours suitable for your line of work. Bright orange works well for a drain cleaning company. Pastel blue not so much. Look around at products you use for clues as to a suitable palette.

Merchandising
T-shirts, mugs, calendars, pens – you know the sort of thing. But it does work, and it’s not that expensive. It’s all part of an overall branding strategy. Keep it within the colour scheme, use your logo and get your contact details on it.

As you can see, marketing doesn’t have to be complicated. You already know most of it because you experience it every day. How often do you use a pen picked up from reception desk or look online for a review?

As a business owner, you just need to think about your wider strategy for presenting your best side to the public – and how you can do this in the most effective way for your marketing budget. Get it right and you’ll soon start seeing the rewards.

So, you’ve come up with a good idea for a business, done your research and identified a gap in the market where you can be successful. That’s the hard part done right? Wrong. In fact, developing a model is just the beginning of the process. The hard work starts with creating a business plan, which can help to turn a good idea into a successful business.

What is a business plan?

This is a written document that describes your business. It will cover everything from your core objectives and sales strategies to financial forecasts and market research. It’s not something you can scribble down on the back of a napkin, it involves some hard work in order for you to be taken seriously. A thorough business plan will also help you to:

• Clarify your business ideas
• Identify potential problems within the model
• Lay out clear goals and objectives
• Track progress as you develop

If you’re going to need investment or a loan in the future, it will be an essential part of securing either. Plus, it’s a handy way of convincing customers and clients that you’re serious.

How to write a business plan

Before you start, spend some time considering:

• What information you need to include
• How you are going to present this information

If you are clear about these two points, writing your plan will be significantly easier and you will be less likely to have to change your plan during the process.

The template

Executive Summary

A business plan starts with an executive summary. This is the last part of the plan to be written but goes on the first page. The idea is to outline your business proposal and highlight the key areas of your model, including:

1. Your product and its benefits
2. Your market
3. Your structure
4. Your experience or track record
5. Financial projections
6. Funding requirements

Remember that some readers may never get further than this section of your plan so make it eye catching, captivating and accurate.

The business

You need to give some background to the business. Explain where the idea came from, your inspiration, your experience, any work carried out to date and details about the structure or people involved at this stage.

Explain clearly what your product is, how it differs from others and where your potential market is found. You need to be clear about who will buy your product/use your services and what the benefits are for customers. You should also indicate how you would be able to adapt in the future should conditions change.

Indicating a detailed knowledge of the industry in which you work is essential. Being able to demonstrate this understanding – by explaining regulation, changes in technology etc. – will reassure potential investors.

Markets and competitors

No matter how good your product, service or idea, if the market doesn’t exist then it wont succeed. Do you research and demonstrate that you have focused on the right segments of the market you aim to target. Indicate where the customer base is, whether it’s growing or declining and outline factors that affect it. Illustrate important trends visually and how these may be influenced.

Know your customers. Outline their key characteristics and demographics i.e. age, sex, income, aspirations. If you have existing customers of clients then use this information to back up your findings. Primary research is invaluable for building trust and authenticity.

Knowledge of the competition should include:

• Who they are
• Where do they operate?
• What do they charge?
• Advantages and drawbacks of their products
• Differences in operations

Sales and marketing

How will you position your product and meet your customers need? What will you charge? What will be your minimum order figures?

Most importantly, how do you plan to sell to customers?

• Phone
• Online
• Face-to-face
• Through an agent

Include details of how long the sales process will take and how you will build up a contacts base for future business. Many new businesses underestimate this area and don’t last as a result.

You should also have a plan to promote or advertise, which should be detailed and fully costed.

Operations

Here you need to make clear how the business will work on a day-to-day basis. What will the internal structure be? How will the business be managed and what experience will you have in the team?

You also need to think about what facilities and equipment you will need to run the business, how many staff you will require and where the business will be based. Demonstrate research and costings for location, required space and any machinery that you will need.

Payment is another key issue that needs to be addressed.

• How will you be collecting money from clients?
• Will you accept card payments or simply cash?
• Will you offer customers financing options?
• How will staff and invoices be paid?

Financial forecasts

In many ways, this is the most important part of your business plan. Potential investors need to know how much money the business is going to turnover. Of course, with any forecast there is an element of doubt and insecurity. However, you can’t just pluck these figures out of thin air.

Figures should be realistic and broken down into component parts. Show your cashflow forecast – how much money will be going into and out of your account. This is determined by levels and timing of sales, wage payments, bills and other factors. Remember that it is very easy for experienced investors or banks to see through poorly collated financial data. Never try to pull the wool over their eyes. It won’t work.

Outline your profit and loss forecast, giving a clear indication of how the business will move forward both initially and in the coming years. Larger start ups will need to include projected balance sheets.

It’s worth remembering that these are just forecasts and are not set in stone. They should be accurate but are also subject to revision.

Financing the business

Utilising the above financial information, you should be able to clearly demonstrate how much investment or financing the business needs. You should also be able to indicate what kind of financing will best suit your needs and when this will be required – fixed interest loans, overdrafts etc.

Clear indication of how this money will be used, with detailed break downs of costings will reaffirm your point. Make sure this is comprehensive and don’t omit important details such as salaries, insurance, stock etc.

Risk assessment

Any business you start will be a considered risk. Banks and investors know this but they also need to see that you have considered where it could go wrong. Think about what might happen if your supply chain is interrupted or if a new competitor undercuts you.

For example, what happens if?

• Sales are lower than expected
• Interest rates go up
• Laws change
• You have staff shortages

You need to put contingencies in place for every eventuality.

Tips for creating your business plan

Not everyone has experience creating business plans and they can be daunting. However, they follow a fairly set formula and as long as you put the work in, do your research and don’t cut corners, they are fairly straightforward to create.

However, there are certain tips and factors that can improve your business plan and give it a better chance of impressing potential investors.

Keep it short

It might look like the above plan requires pages and pages of info but that’s not necessarily true. Keep information clear and concise. Most business plans are way too long and people can lose interest. As long as the data is accurate, well researched and can be understood easily, plans don’t have to be huge.

Make it look professional

Keep your plans neat and tidy. Use a uniform font, make sure it is thoroughly checked for mistakes and that it’s formatted well. Include a cover and a contents page – making sure pages are numbered correctly. You can even give it a title. A professional looking plan stands more chance of making a good impression.

Put it to the test

Read it. Read it again. Then leave it for a while. Then go back and read it once more. Does it all sound good to you? Does it give a clear indication of what you want to achieve?

Give it to friends, family and colleagues to look over and take their criticism on board. If they find certain parts of it confusing, chances are so will other people – and they know you best.

Your business plan should be the rock on which you build your success. It’s a formal record of the work you’ve put in to get the business off the ground. If it’s good, it can secure investment, outline your goals, point out possible mistakes in your thinking and help you identify areas you need to work on.

As your business grows, you can use your plan as a yardstick to measure growth and success. It can even help to realign your focus. In the future, you will hopefully be able to look back at your plan as the guidebook for your success.

YourTradebase was built with a simple vision: To make paperwork easier for trades people.

By building an easy-to-use tool to reduce admin headaches, we were sure we’d be able to help trades save time and win more work.

So we’re delighted to announce a milestone that we’re all very proud of…

Over £30 million worth of quotes and estimates have now been sent – and won – using YourTradebase.

We’re working hard to make YTB even better – and we’re confident we can help businesses win lots more work in the process!

Here’s YourTradebase by-the-numbers:

We want to say a huge thanks to our customers – and we can’t wait to help you win the next £30,000,000 worth of work 😀

– The Team at YourTradebase