The Real Cost of a Bad Quote
A quote that's too low wins the job and kills your margin. A quote that's too high loses the job entirely. Here's how to find the middle.
Bad quotes come in two flavors and both of them hurt.
The first kind is too low. You win the job, you run the parts, and somewhere around the final inspection you realize the margin you thought was there has evaporated. Maybe you underestimated the setup. Maybe the material came in higher than expected. Maybe it just took longer than you planned. Either way, you've traded your time for less than it's worth.
The second kind is too high. You don't win the job. The customer goes somewhere else — maybe to a shop that's more efficient, maybe to one that's cutting corners you don't cut. You never know which.
Why underquoting is more common than people admit
Shops tend to underquote for a few reasons. The optimistic case is that the job looks straightforward in the quote phase and then reveals complexity during machining. Tight tolerances that weren't called out clearly. A finishing step that takes longer than expected. A second setup that wasn't accounted for.
The less flattering reason is that shops sometimes shade quotes low to win work, especially when the shop is slow. This works as a short-term strategy and fails as a long-term one. You end up busy doing unprofitable work, which is worse than being slow — because being slow at least gives you the chance to chase better work.
The margin discipline
The fix is treating your quote as a floor, not a guess. Start with every cost that's definitely going to happen — material, setup, machine time, finishing, inspection — and build up from there. Apply your markup on top. If the number feels high, resist the urge to shave it before you've verified which line items are actually negotiable.
Customers rarely push back on quotes they understand. A line-item quote that shows the work behind the number is easier to defend than a single lump sum that feels like you made it up.
What a bad quote really costs
Run 10 low-margin jobs in a row and you've kept the machines running while funding the business at break-even. The equipment is wearing. The employees are working. The overhead is ticking. And at the end of the quarter you have very little to show for it.
The cost of a bad quote isn't just the margin on that job. It's the capacity you used that could have gone to better work.
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