How can I confirm an electrical contractor’s open quotes are realistic?
Pull the open quotes and compare each with the cost of similar finished jobs. Check the labour hours, material allowances and assumptions behind them, then see how often the seller’s past quotes matched the final result. Ask which customers have actually responded.
An open quote is a promise to do work at a stated amount, and a quote that was too low becomes your problem after closing. Ask for the list with the customer, date, scope, total, expected labour and material figures, and any exclusions. Check whether anyone has followed up with the customer.
Test the numbers against history. Choose a few completed jobs of a similar type and compare the original quote with the actual costs. If the seller regularly lost money or ran over on labour, the open quotes may repeat the mistake. If the seller built in an allowance for surprises, find out how large it was.
Look at the quote terms. Do they expire? Do they allow for changes in material costs? Does the customer have to accept in writing? A quote that has been sitting for a long time may no longer be live. Ask the seller how many quotes typically convert, and to whom. Treat the pipeline as unproven until a signed contract exists, and discuss with your lawyer how accepted work after closing is handled. Ask also about any quote that was promised verbally but never written, since those have a way of becoming expectations the new owner is asked to meet.
Key takeaways
- Compare each open quote with the actual cost of similar finished jobs.
- Check expiry, material cost changes and acceptance terms.
- Treat a quote as unproven until the customer has signed.
Related reading
15 pages on the same subject, grouped by topic.
Due diligence
Buying
- GuideBuying an electrical contractor in Canada
- Expert answerHow do I find an electrical contractor for sale near me?
- Expert answerHow do I judge an electrical contractor’s room to grow before buying?
- Expert answerWhat insurance records should I ask for when buying a plumbing or electrical contractor?
- Expert answerWhat should I focus on in the first months after buying an electrical contractor?
- Expert answerHow do I confirm a seller actually controls the domains in a portfolio?
Selling
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Business Development Bank of CanadaGovernmentAfter buying a business, what is the next step?
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.