How to Quote a Smart-Home Project: Bill of Materials, Labour, Margin and AMC
A structure for a quote that survives the project: a room-by-room bill of materials, labour built from your own costs, the difference between markup and margin, clear exclusions, and an annual maintenance contract that says what it covers.
By Abhi Bavishi, Founder, Smartify
Technical review pending
At a glance
You will learn
- Build a room-by-room bill of materials
- Price labour from your own costs
- Write exclusions and an AMC that says what it covers
You need
- A completed site survey
- Your own cost records
Key takeaway
Quote only after a survey, keep markup and margin as separate decisions, and write down assumptions and exclusions.
Key terms in this lesson (4)
- AMC
- Annual maintenance contract: a recurring service you sell after handover. It should say what is covered, what is not, how a fault is reported, which equipment is included and how it renews.
- Bill of materials
- The room-by-room list of every item in a quote, with quantity, cost and price. Include shared items such as hubs, deeper boxes and backup power.
- Margin
- The share of the selling price that you keep. A product that costs 100 and sells for 150 has a 50% markup and a margin of about 33%.
- Markup
- What you add to your cost to set the selling price, as a percentage of cost. It is not the same as margin.
Short answer: survey first, build a room-by-room bill of materials, cost the labour, distinguish markup from margin, and document assumptions and exclusions. An annual maintenance contract must say exactly what work it covers.
A quote should let the client understand the purchase and let you deliver it from your own cost records. This lesson gives a structure, not market prices or target margins.
Before you price anything
- Complete the site survey. For retrofits, check neutral availability and each switchboard.
- Describe functions in the client’s words: what a switch, scene or internet outage should do. A functional layout gives acceptance tests a defined target.
- Choose the architecture and load-control arrangements before listing equipment.
The bill of materials (BOM)
| Field | Purpose |
|---|---|
| Room or zone | Shows what can be deferred |
| Exact item/model and function | Connects equipment to requested behaviour |
| Quantity | Comes from the survey |
| Unit cost and quoted price | Keeps cost and selling price separate |
| Supplier, lead time, warranty | Supports purchasing and programme |
| Dependencies/notes | Flags deeper boxes, wiring or other prerequisites |
Add shared equipment: hubs, controllers, border routers, bridges, access points, supplies and cables. Include boxes, conduit, connectors, labels and consumables. Add the backup power, contactors, protection and specified suppression required by the design.
List software licences and subscriptions, who pays and for how long. Label allowances for concealed work and explain what happens if they are exceeded. A KNX documentation guide connects the BOM to control philosophy, schematics, wiring schedules and functional layouts across first, second and final fix; use the same discipline to catch missing items.
Labour
Break labour into survey, design, programming, room-by-room installation, commissioning, training and handover. Estimate task time from completed-job records, then update those records after this project. Include the commissioning work, rather than treating handover as spare time at the end.
A technician’s wage is not the full hourly cost. Include tools, transport, supervision, idle time and rework in your own costing. Account for travel, access restrictions and waiting, or state exclusions clearly.
Make qualified-electrician work a visible line or named subcontract. The electrician decides the circuit and protection. Do not quote work you are not authorised or qualified to perform as though it were ordinary device setup.
Markup and margin are different numbers
Markup is added relative to cost; margin measures the difference relative to selling price. If cost is 100 and price is 150, markup is 50% and margin is about 33%. This illustrates arithmetic, not a recommended selling price.
Decide the margin needed to cover your costs and overheads, then calculate the markup. Keep product and labour margins visible separately. Compare quotes only after checking what each price includes: shipping, warranty handling and bench testing can be bundled differently.
Do not copy a percentage from another installer or country. A number without its underlying scope and cost basis does not tell you whether this job can be delivered profitably.
Assumptions, exclusions and variations
Record assumptions such as neutral availability, box depth, supplied internet and curtain-motor power points. Separate confirmed survey findings from items still unverified.
List exclusions: wall chasing/repair, painting, extra rewiring, client-supplied equipment and third-party accounts or services. Explain how a variation is priced, who approves it and what written approval is needed before work begins.
State quote validity and whether prices include taxes; confirm treatment with your accountant. Describe tested functions rather than promises that every LED works, every app has every feature or no servicing will ever be needed.
Payment and programme
Tie payments to visible milestones such as materials delivered, first fix, commissioning and handover. Choose amounts from your costs and project circumstances. Record equipment lead times and access dependencies so the client can see what determines the programme.
The AMC
An annual maintenance contract (AMC) sells recurring service after handover. Specify covered visits, remote support, firmware work, battery and backup checks. Name excluded parts, damage, new devices, internet and third-party services.
Define how faults are reported and the response time, without promising an unachievable repair time. Reference the covered device inventory. State term, renewal, price-change and cancellation arrangements, and distinguish the AMC from the manufacturer’s warranty: it does not extend that warranty.
Price the visits and support you can actually staff. Keep the service promise specific enough that both sides can tell whether it was delivered.
Common mistakes
Avoid quoting before surveying, pricing labour at wage alone, confusing margin with markup, or omitting infrastructure and licences. Include exclusions, written variation approval and a defined AMC. Promise a tested set of functions, not universal compatibility.
Where to go next
Check yourself.
Questions from real jobs. Think first, open the answer, then say how you did. The score is for you and stays on this device.
A product costs 100 and sells for 150. What are the markup and the margin?
A 50% markup and a margin of about 33%. They are different numbers, so decide both.
A client asks you to promise that every LED lamp will behave. What do you do?
Do not promise it. Describe a tested set of functions rather than outcomes the system cannot guarantee.