Why Your Quotes Keep Missing the Mark

A bathroom renovation quoted at £8,500 ends up costing £9,200 to deliver. The plumbing behind the wall was worse than expected. An extra day of labour, specialist parts, and the margin evaporates. The business absorbs the £700 shortfall, files away the lesson mentally, and moves on to the next job. Six months later, facing a similar project, the same estimation mistake repeats.

This pattern is not unique to trades. A consultancy quotes a brand strategy project based on two revision rounds. The project actually requires 3.4 rounds on average, but nobody has measured this. An agency scopes a website build at 80 hours. The delivered project consumes 96 hours, with the difference absorbed as "client relationship investment." These are not isolated incidents. They are systematic errors that compound into serious financial consequences.

The problem is not that business owners are bad at estimating. The problem is that most estimation happens from memory and intuition, missing patterns that only historical data reveals.

The Real Cost of Getting It Wrong

Estimation errors cut both ways. Underquoting erodes margins directly. The work gets done, the invoice goes out, but the profit that should have been there has already leaked away in untracked hours and unaccounted costs. Overquoting loses winnable work. The client chooses a competitor, and revenue that could have been earned disappears entirely.

Consider a business completing 100 projects annually at an average value of £10,000. A 5% average estimation error, which many would consider acceptable, represents £50,000 in annual margin leakage. That figure assumes errors are evenly distributed between over and under. In practice, optimism bias means most businesses skew toward underquoting, making the real impact larger.

The compounding effect makes this worse. Each underquoted project does not exist in isolation. It consumes capacity that could have been applied to correctly priced work. It creates cash flow pressure that limits investment. It establishes expectations with clients who will resist future price corrections. A business running at 5% estimation error for five years has not lost £250,000 once. It has lost the opportunity to reinvest that money into growth, equipment, hiring, and competitive positioning.

Overquoting carries its own compound cost. Every lost bid represents not only the immediate revenue but the relationship that might have led to referrals, repeat work, and market reputation. A business that consistently prices 10% above market does not lose 10% of opportunities. It loses the opportunities where price is the deciding factor, which are often the price-sensitive but high-volume segments that could have provided stable utilisation.

Why Memory and Intuition Fail

The experienced business owner has completed hundreds of projects. That experience feels like it should translate into accurate estimation. Often, it does not.

Memory exhibits predictable biases. Recent projects loom larger than older ones. A kitchen installation that ran smoothly last month influences the next quote more than the five kitchens before it that each presented different challenges. Dramatic projects, whether dramatically good or dramatically bad, stick in memory while routine work fades. The bathroom renovation that went perfectly and the one that became a nightmare both get remembered. The fifteen projects in between, each with their own small variances, blur together.

Optimism bias affects even experienced estimators. When scoping a project, the natural tendency is to envision the scenario where everything goes according to plan. The materials arrive on time. The site conditions match expectations. The client makes decisions promptly. The team works at peak efficiency. This best-case scenario becomes the quote, despite the statistical improbability of everything aligning perfectly.

Forgotten costs compound the problem. The time spent writing the quote itself. The project management hours. The emails and phone calls that do not feel like "real work" but consume capacity nonetheless. The travel time between sites. The admin required to close out the job. These costs are real, they affect margin, but they rarely make it into the mental calculation when a price is being assembled.

Risk factors receive inconsistent treatment. One project gets a 10% contingency because the client seems demanding. The next gets none because the work appears straightforward. These adjustments happen by feel rather than by evidence. Without data on which project types or client characteristics actually correlate with overruns, contingency becomes arbitrary.

What Historical Data Actually Shows

When businesses start tracking quoted versus actual costs systematically, patterns emerge that intuition missed entirely.

Project type patterns are often the most surprising. A kitchen fitter might discover that their Victorian terrace installations consistently run four days longer than new-build equivalents, despite feeling similar in complexity during the quoting phase. The hidden variable is usually access, existing infrastructure, or unforeseen conditions behind walls and under floors. Once identified, this pattern can be priced into future quotes.

Client type patterns reveal themselves with similar clarity. New clients, on average, require more communication time than established relationships. The ramp-up period of learning how a new client makes decisions, what their approval processes look like, and how they prefer to receive information represents real cost that first-project quotes rarely capture.

Seasonal patterns affect some businesses more than others. A landscaping company might find that spring projects, when the ground is wet and the days are short, consistently take longer than summer equivalents. A consultancy might discover that projects spanning December deliver slowly due to client availability.

Team member patterns can be uncomfortable to acknowledge but financially significant. Different people work at different speeds. A two-person team might have a 20% variance in productivity between members, which directly affects whether a project hits its quoted hours.

The most valuable insight often comes from examining "similar projects" more rigorously. The statement "I think similar projects took about three weeks" is qualitatively different from "12 comparable projects averaged 19 days with a range of 14 to 26 days, and the three that exceeded 22 days all involved listed building consent." The first is a guess. The second is intelligence.

Building the Loop That Improves Every Quote

The businesses that achieve consistent estimation accuracy are not those with more experience or better instincts. They are those that have built a feedback loop from completed projects back to future quotes.

The loop starts with capturing actual costs, not invoiced amounts. What was invoiced is what the client paid. What was actually spent, in labour hours, materials, subcontractor costs, and overhead, determines whether the project was profitable. These are not the same number, and conflating them masks the true picture.

At project completion, a systematic comparison between quoted and actual creates the raw data. This need not be elaborate. The essential question is: what did we quote, and what did it actually cost to deliver? Recording this for every project, even in a spreadsheet, builds the dataset that makes pattern recognition possible.

Analysis converts data into insight. After 20 projects, patterns begin to emerge. After 50, they become statistically meaningful. After 100, a business has genuine intelligence about its own performance. The consultancy that discovers their brand strategy projects consistently run 18% over in revision cycles can adjust future quotes accordingly. The contractor who finds that jobs requiring council planning approval average 23 additional days can price the timeline risk. The agency that identifies one service line with 8% margins and another with 24% can make informed decisions about where to focus.

Adjustment closes the loop. Insights that do not change behaviour have no value. The point of discovering that Victorian terrace kitchens take four extra days is to add four days to the next Victorian terrace kitchen quote. The point of learning that new clients require 15% more communication time is to build that into first-project pricing.

The compounding effect works in reverse once the loop is established. Each completed project makes the next quote slightly more accurate. Over 50 projects, these small improvements compound. A business that improves estimation accuracy by 15% across 100 annual projects at £10,000 average recovers approximately £150,000 in margin that would otherwise have leaked. That recovered margin can fund better equipment, skilled hires, or competitive pricing that wins more work.

The Skill That Pays for Itself

Accurate estimation is not innate talent. It is a learnable skill backed by systems. The tradesperson who tracks their projects systematically will out-estimate the more experienced competitor who relies on memory. The agency that analyses its completed work will price more accurately than the larger firm operating on intuition.

The businesses that improve their estimation are not those that try harder to guess correctly. They are those that stop guessing. They measure. They compare. They adjust. They build a record of what actually happened and use it to inform what they expect to happen next.

Every completed project contains information that could improve the next quote. Most businesses discard this intelligence by not capturing it. The question is not whether the data exists, because it does, in timesheets, receipts, and project records. The question is whether it is being connected and applied.

The gap between quoted and actual is not a mystery to be accepted. It is a measurement to be taken, a pattern to be identified, and a problem to be solved. The businesses that close this gap do not work harder at estimation. They work smarter, building the feedback loop that turns every finished project into a better prediction for the next one.