Can you afford that discount and still make the job worthwhile?

The customer asks you to sharpen the price

The scope is unchanged, but the customer wants a lower figure. You want the work, and the percentage reduction sounds manageable. Before agreeing, look at what remains after the relevant costs rather than judging the discount against the size of the contract alone.

This is particularly useful when you are already worried that a full order book is producing little return. A discount is a commercial choice, not automatically a mistake. The question is whether you understand the contribution you are giving up and what, if anything, changes in return.

Calculate the effect on one quotation

Take a hypothetical quote of $20,000 with $16,000 of direct costs, both excluding GST. Its contribution before shared costs is $4,000. A 5% price reduction removes $1,000 from revenue. If the direct costs remain unchanged, the contribution becomes $3,000: a 25% reduction in that contribution.

Those figures illustrate the arithmetic only. They do not set an acceptable margin for your business. The original and revised contributions must still be considered alongside shared expenses, risk and the resources required. A discount also does not guarantee that the customer will accept the quote or pay sooner.

Source: Business Victoria: Calculate your breakeven point, margin and markup

Check whether anything else actually changes

Ask what the revised offer includes. Is the scope reduced, the schedule genuinely easier or a particular cost removed? Record a proposed change separately from a hope that the job will become simpler once work begins. Use realistic evidence for any cost saving you include.

If the scope changes, confirm that the new price and description match. Do not leave a reduced price attached to the original full scope by accident. Where a contract already exists, review the actual agreement and obtain advice as needed rather than assuming a fresh quotation replaces existing obligations.

Consider the work you would displace

A discounted job may occupy people or equipment needed elsewhere. Look at the actual coming programme, including work already committed. Compare realistic alternatives, not an imagined full-price contract that may never arrive. Equally, do not treat an empty week as proof that any price is sensible.

Timing matters as well as contribution. Check when you must pay for materials and labour and when receipts are expected. A job can make a positive contribution on paper while requiring cash the business cannot safely provide. Keep that funding question visible in the decision.

If different people can offer discounts, make the costing assumptions available to them. A consistent decision record helps the estimator and business owner discuss the same scope and contribution before a price is promised.

Put a clear decision in writing

Before responding, write the original price, proposed reduction, revised relevant costs and expected contribution on one page. Note the assumptions and any scope or payment changes. Check the arithmetic with someone who understands the quotation before relying on it.

Today, do this for the discount currently on your desk. If the reduced offer does not support the work, consider a clearly defined alternative scope or decline future work rather than promising an unsustainable result. If repeated discounting is part of wider financial pressure, contact CRP about turnaround support with the quotation and your cost assumptions. The objective is an informed decision, not winning a job at any cost.