The job we priced before the materials went up

The quote went out in February and came back accepted in March, which felt like a win. Then the customer's architect went back and forth over a detail, then they went on holiday, then the scaffolder we wanted was booked, and we finally got on site in the second week of June.

Four months is not an unusual gap between quoting a job and starting it. Nobody thought about it. The price on the acceptance was the price, and the price was fine when we wrote it.

The quote that sat in a drawer for four months

The figures below are illustrative and rounded, but the shape of them is the one every builder recognises.

We quoted £18,400. Behind it sat a cost build-up done properly, on a spreadsheet, in February: materials £7,200, labour of twenty-two days at £220 a day giving £4,840, plant hire £900, skips and waste £400, and £2,000 of overhead recovery. Total cost £15,340, leaving £3,060 of margin, which is 16.6% of the price. Not spectacular, but a real number on a real job.

By June the merchant's price on the same schedule of materials had moved 17.5%, so the £7,200 became £8,460. Plant hire had gone up £120. And a delivery that slipped put three men waiting for the best part of a day, which with the knock-on cost us another £660 of labour we could not recover.

New cost: £17,380. The price was still £18,400, because that is what we had signed. Margin £1,020, or 5.5%. We did the job well, the customer was delighted, and we made almost nothing.

The job did not go wrong. The quote did, four months before anyone picked up a tool.

Where the money actually went

It is worth being precise about this, because the instinctive reaction is that materials inflation ate the margin, and only about two thirds of it did.

The materials increase was £1,260. The plant hire increase was £120. Together, £1,380 of genuine input cost inflation, which is roughly 45% of the original margin. The other £660, more than a fifth of the margin, was the day the delivery did not turn up. That was not inflation. That was a supply chain that had got less reliable while our programme assumed it had not, and we had no float in the labour plan to absorb it.

So the lesson is not only about price. It is that a quote is a set of assumptions about cost, availability and timing, all of which decay, and we had priced as though only one of them existed.

Estimate, quote, fixed price: three different promises

This is where a lot of small firms get themselves into trouble, because the words get used interchangeably on site and they mean genuinely different things in a contract.

An estimate is an informed guess. It is not a binding offer, and it can be revised as the job becomes clearer, provided you tell the customer promptly rather than at the end. A quotation is an offer at a stated price; once the customer accepts it, you have a contract at that figure and you cannot raise it unilaterally because your costs rose. And a fixed price, in construction language, means specifically that the price is not adjustable for changes in the cost of labour and materials. It does not mean there can be no variations for changes in the work itself.

We had issued a quotation. We had also, without thinking about it, given a fixed price, because there was nothing in the document saying otherwise. Silence on cost changes is not neutral. Silence means you carry them.

If you are working for a consumer rather than a business, remember the other clock running alongside: for work agreed in someone's home there is normally a fourteen-day cancellation right, which is the trap we wrote about separately and which is worth knowing before you start ordering.

The clause we now put on every quote

Two sentences, in the terms on the back of every quotation, and they have never once cost us a job.

The first is a validity period: this quotation is valid for thirty days from the date shown, and assumes a start on site within eight weeks of acceptance. That alone forces a conversation instead of a surprise. Put the date on the quote in large type, not in the footer.

The second is a fluctuation provision: where the start on site is more than eight weeks after acceptance, material costs will be re-priced against supplier quotations current at the date of order, and any change will be notified in writing and agreed before materials are ordered. The important half of that is the agreement step. You are not reserving the right to send a bigger bill at the end; you are reserving the right to have the conversation before you spend the money. Customers accept that far more readily than people expect, because the alternative — a builder who quietly cuts corners to protect a dead margin — is worse for them too.

The practical version of the same idea costs nothing: where you can, place the order for the big-ticket materials at the point of acceptance rather than the point of starting, take a materials deposit to fund it, and ask the merchant to hold price against a purchase order. A price held for ninety days on a purchase order is worth more than any clause.

Provisional sums, done honestly

For the genuinely unknown — what is behind the plaster, what the drains are actually made of — use a provisional sum, state clearly what it covers and how it will be adjusted against actual cost, and show it as a separate line so the customer can see it is provisional.

What you must not do is use provisional sums to make a headline price look competitive when you already know roughly what the work involves. That is not risk management, it is a bait price, and it damages the one thing a small builder actually sells, which is the belief that the number on the paper is the number at the end. The quote we won because we were the most expensive is the other side of exactly this coin.

What we would tell someone quoting today

Date every quote and give it a life. Re-price the materials schedule against current supplier prices before you start, not after, and do it as a five-minute job rather than a big exercise. Build a float into the labour plan for the delivery that does not come, because it will. Take deposits and stage payments so you are not funding the merchant out of your own overdraft, which is the other quiet cost of a long gap between quoting and starting.

And keep the cost build-up, not just the price. The reason we could see exactly where the £3,060 went is that we had the February spreadsheet. Firms that quote from experience and a round number never find out which assumption broke, so they make the same mistake on the next one. If you want the front end of this done properly, how to write a quote that wins the job covers the structure, and pricing for profit covers the margin you should have been protecting in the first place.

Common questions

Can you increase a price after the customer has accepted your quote?

Not unilaterally. Once a customer accepts a quotation you have a contract at that price, and rising material or labour costs are your risk unless the quotation says otherwise. You can only change the price where the work itself changes, where the customer agrees a variation, or where your written terms contain a fluctuation clause allowing costs to be re-priced in defined circumstances. That is why the clause matters: it is not about charging more later, it is about creating a contractual moment where the increase is discussed and agreed before materials are ordered rather than presented as a shock at the end of the job.

What is the difference between an estimate and a quotation?

An estimate is an informed guess at the likely cost and is not a binding offer, so it can be revised as the job becomes clearer, provided you tell the customer promptly rather than at the final invoice. A quotation is a firm offer at a stated price which, once accepted, forms a binding contract at that figure. In practice the label alone will not save you: what matters is whether the document reads as a firm price and whether the customer reasonably understood it that way. If you genuinely mean an estimate, say so clearly on the document and explain what would make the figure move.

How long should a builder's quote stay valid?

Thirty days is the common default and works well for most domestic and small commercial work, but the more useful control is a second condition tied to when work actually starts, such as assuming a start on site within eight weeks of acceptance. Material prices and subcontractor availability are what move, and both are functions of the start date rather than the acceptance date. Print the quotation date prominently rather than in the footer, and if a customer accepts near the end of the validity period, re-check the materials schedule against current supplier prices before you commit to a programme.

What is a fluctuation clause and should a small builder use one?

A fluctuation clause allows the contract price to be adjusted for changes in the cost of materials or labour between agreement and delivery. Standard construction contracts have long included them; small firms working on their own terms usually do not, which is why the risk lands entirely on the builder. A short, plain version is enough for most domestic work: state that where the start on site is more than a defined period after acceptance, material costs will be re-priced against current supplier quotations, notified in writing, and agreed before ordering. The agreement step is what makes it acceptable to customers.