Question On Quotes - Using Disclaimer That This Is Just An Estimate

We generally provide a final quote with some cushion built in to cover unexpected expenses in the install phase.

We do a quote as a “Not to exceed” price. We make sure to account for everything possible, but there are times where we have overlooked things. If they are minor, we absorb the costs. If it is something major, we will discuss it with the client as soon as possible to see if we can agree on a resolution that works for both of us. 

#1, good topic. Essentially, this is the difference between a firm fixed price quote and a time and materials one. Buyers tend to like the former since the risk for labor and other contingencies is put on the seller. Of course, as Andrew mentions, sellers tend to build in cushion to reflect that risk/uncertainty.

Try it with the estimate / disclaimer approach and see what prospects say. If they agree, better for you but you may find some (many) want a fixed quote.

Thank everyone for the responses. They are very helpful.

Ask yourself, which would you choose if you were buying for your own project?

As an end user/consumer - when I'm going to make a large purchase I want a firm quote.  I'm okay with additional charges if something comes up that no one could have predicted but I feel like a security professional should be able to design a project that covers all contingencies within reason and quote it accordingly.  If I get an open ended "here's how much we think it will cost" estimate I immediately get suspicious that its being underpriced on purpose to win the job and then I'm going to get hit with change orders and overages as the project progresses at which time I will already have paid a lot of money in the deposit and invested a lot of time so I'll be handcuffed into going over budget. I wouldn't sign off on an estimate like that.

Everyone in our company seems to do it a bit differently.  My personal method is to account for everything I can and add a small amount of padding for consumables and unforeseen items.  I add a decent amount of qualifications/disclaimers to cover typical and possible challenges that may occur on a project. For example I declare up front that are rates are based on our IBEW local and do not include shift premiums,  overtime, holidays, or weekends which add additional cost.  I do my best to let the customer know what costs they may have beyond us from other trades that may need to be involved but that do not fall under us.  My quotes are verbose and tell the customer exactly what we have in the project down to mount and cable numbers, door hardware, etc. This detail helps the customer know that I have thought out the quote fairly heavily.  However, If I catch word that data is on the street being shopped verbatim from my quote their next quote is a simple flat price and a list of disclaimers.

I see merits in the model of quotes just being an estimate.  I have a hard time going with that method.  With larger customers their budgetary numbers are set in stone years out and change orders are difficult for them to process through the system.  Because of those challenges they know they may pay more up front but also not die a death of a thousand cuts in change orders. If I miss something I eat it.  More often than not it works in our favor.  One fixed price with a healthy margin is best for all.

Obviously if the scope significantly changes such as adding a new door or camera location that is obviously a change order.