By James Solomons, Head of Accounting, Xero
Small businesses win work by using sales quotes. Yet they often don’t realise that how they prepare quotes can cost them business. Many lose revenue by not following up on quotes or turning quotes around fast enough.
In a recent survey* small businesses stated that their number one financial challenge is cashflow and getting paid. Getting on top of the quoting process can reduce the number of days to acceptance which in turn reduces the number of days to getting paid and improves your cashflow.
So, getting on top of your quotes can really make a difference. Here are some tips to help you prepare quotes that get accepted:
1. Ensure your quote is properly constructed
A quote is often the first impression of your business that you give to prospective clients. Every quote that you send out should tell the client a little bit about your business. It should detail all the prices and all the costs and services that they’re going to expect to get - don’t be afraid to surprise them and add a little bit more value. Be transparent and include terms and conditions in plain English. Make sure the branding of the quote is consistent with your business’s brand. And, most importantly, use a call to action at the end via an acceptance or modification process. If it’s clear and simple you can be sure that the sale can be made first time and there will be less back and forth.
2. Make sure you send a quote within 24 hours
One way to speed up this process is to consider using cloud software to quickly prepare and send out quotes on the spot or immediately after an initial meeting. By making it easy to create a quote, you can quickly respond to an opportunity, anytime anywhere. And spend less time returning to the office to construct a quote.
3. Speed up the process by embedding a quoting engine on your website
You may not always be able to meet your client in person so this added tool will allow customers to do business with you 24/7.
4. Make sure you follow up within 2 to 3 days of sending
There’s no right or wrong number of days on how long you should wait before following up, it can depend on your business or industry. But I would recommend that you strike while the iron’s hot - once you’ve quoted follow up the day after to ensure that the client has understood and received it. This is a good way to ensure you’re getting in front of your client and gives the quote every chance of being accepted.
5. If you’re not winning quotes ask the questions and learn from mistakes
Take steps to ensure that next time you send out a similar quote you’re going to win that business. By asking the right questions you might find you need to improve the sales process, quoting process or content that’s in there.
Finally, if you’re managing your finances through spreadsheets, you probably aren’t always aware of your workflow and where quotes are sitting in the sales process. You need to have this information at your fingertips at all times with accounting software. This makes it easy to track the status of a quote, follow up on the ones that have been sent but not accepted, and generally keep your business moving.
*The results of this study were taken from a random US sample of over 500 small business owners. The research was commissioned by Xero and independently conducted by market research company, Zogby Analytics.