Money Terminology to Know in the Construction Industry  

A contractor should be licensed. When looking for a quality contractor, many clients consider a lot of variables before hiring one, and they check in on your licensure. After a client chooses you to work on a job or project, the scope of the project will be discussed, along with a timeline and costs.  

When it comes to dealing with money on a construction job, there’s many different terms used including bid, quote, estimate, and proposal. As a contractor, you need to know all these terms and the difference between them. You also want to explain and rely this information to your clients, so there is no confusion about costs.  

As a Florida contractor licensing company, our team at Licenses, Etc. Have helped thousands of people get their contractor licenses, so we know this business well. For this article, we wanted to explain these different monetary terms to you, so both you, as the contractor, and the client, knows what you are referring to or what they are looking at.  

Bid – A bid is something submitted to a general contractor by a subcontractor to do part of a project. A bid also refers to a document that offers to do a job at a certain price in a certain time frame. 

Quote – A quote is a number the contractor will give a client based on numbers from a supplier regarding materials. A quote is usually only good for about a month. After a month, the cost of supplies will change as prices for materials fluctuate due to supply and demand. 

Estimate – An estimate is a combined total of the materials and labor to complete a project. An estimate can also include taxes, overhead, subcontracts, equipment, and more. Most estimates are free, but some contractors charge because it takes a while to put together a good estimate. 

Proposal – A proposal is a thorough, detailed document that is submitted to win business. In the proposal, there are quotes and estimates that include price of materials, labor, subcontractor costs, taxes, overhead, and more. A proposal can be a contract if there is a place for the customer/client to sign. 

When you are educated in the difference in these terms and words, you will be able to understand what you need to give the client and/or what the client wants from you.  

 Looking to get your contractor’s license? There’s so many jobs in the contracting field; it is a rewarding career and the job market in this industry continues to grow each year. There is a need and demand for skilled, licensed contractors.  

We are a contractor licensing company who help contractors all over the country get their licenses. To get your Florida contractor’s license or contractor license in another state , click our Florida contractor’s license page or call us at 239-777-1028.