An estimate: a rough figure
An estimate is a rough figure given before the details are known: before a site visit, or before the specification is settled. It tells the client the size of the cost and does not bind the business to that exact number.
So an estimate is best written as a range rather than one number, with what could move it: the real measurements, the condition found, or the materials chosen.
A quote: a fixed price for a defined job
A quote is a promise of a set price for a set job, good for a set time. If the client accepts it before it expires, the price is the one written on it, as long as the job is the one it describes.
That is why a quote needs what an estimate does not: itemised lines, a scope that says what the price covers and what it does not, an expiry date and how payment works.
A proposal: why this approach
A proposal is a longer document: how you understand the problem, the solution you suggest, the steps, who will do the work and their experience, and then the price. It is used when the client has not yet decided exactly what they want, or is comparing different approaches rather than prices for the same thing.
A proposal often ends in a quote: once the client is convinced by the approach, they need a set price to approve.
A bid: a price in a competition
A bid answers a tender or a request for quotes: the buyer sets the specification, the conditions and the deadline, and the bidders compete on the buyer's terms, not their own. A bid is submitted in the format asked for and usually cannot be changed afterwards.
The differences at a glance
These questions tell them apart in usual practice; the details can differ from one country to another:
- Is the price binding? An estimate is not; a quote and a bid are once accepted; a proposal is, as far as it states a set price.
- Who sets the terms? In an estimate, a quote and a proposal, the business does; in a bid, the buyer does.
- How much detail? An estimate is a few lines; a quote has items, scope and terms; a proposal explains the whole approach; a bid holds what the tender asks for.
- When is it used? An estimate in the first conversation; a quote once the job is known; a proposal while the approach is still being chosen; a bid when there is a tender.
Which one to send
If the client asks roughly how much it will cost before the details are known, the answer is an estimate, and it should say plainly that it is one. Once the job is known and the client asks for the price, the answer is a written quote.
The common mistake is to send a rough number in a short message that the client reads as the final price. Naming the document at the top - estimate or quote - with the expiry date and what the price covers, prevents that dispute.
Where Naam fits
Naam is a quoting tool: itemised lines, a scope that says what the price covers and what it does not, an expiry date and a payment schedule. The client approves a specific version of the quote from the link, and their name and the time are recorded, so there is no argument later about which price was agreed.