How do I read a welding shop’s quote-to-win ratio before I buy?
Ask for a log of quotes sent and jobs won, by customer and job type. Divide wins by quotes within each group, then ask what explains the pattern: pricing, response time, capacity, or quoting work the shop does not want. One overall ratio on its own says very little.
A quote-to-win ratio only helps if the quotes are recorded. Ask whether the shop keeps a quote log and whether it includes lost, expired and no-response quotes, not just the winners. If records are thin, ask the estimator to rebuild a recent sample from email.
Break the ratio down. Repeat customers usually win at a different rate than new ones, and small repairs differ from large fabrication jobs. A very high win rate can mean the shop quotes too low, while a low one may mean slow replies or quoting work it cannot do well. Ask what feedback the shop gets from customers who say no. Also check the time between enquiry and quote, because speed often matters more than a few dollars.
Finally, ask how quoting works day to day. Is it one person, usually the owner? How is the cost estimated, and does the final job cost match? Compare quoted margins with actual margins. Your accountant can help you read the numbers properly. If the ratio depends on the owner’s relationships, plan for that after the sale. Ask also whether the shop ever walked away from a quote because of capacity, since a busy shop may show a modest ratio for good reasons.
Key takeaways
- Make sure lost and unanswered quotes are included in the log.
- Split the ratio by customer type and job size.
- Compare quoted margin with actual job margin and note who does the quoting.
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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?
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