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Pondering Commercial Work

 
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Old 12-29-2010, 07:04 PM   #1
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Pondering Commercial Work


From time to time I get calls from companies asking if we do commercial work and would remodel their bathrooms. Offices, restaurants, bars, nursing homes, etc...

I always explain to them that we do residential work and thats the end of it.

The calls seem to be picking up in frequency though and I'm starting to wonder if we should look into the commercial side.

I'm aware we would have to bone up real good on ADA and all the rest of the regulations, get familiar with more commercial products such as urinals and such. Seems like that would be easy enough.

I'm wondering though about the licensing and insurance issues. What's it take to get a commercial license if you have no experience at commercial work? I'm guessing that permits need to be pulled on all commercial jobs, or is something like bathrooms such a small thing that it's not messed with?

I'm not sure if in the end it would even be worth it considering the horror stories about slow payments and such.

What do you think?
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Old 12-29-2010, 07:10 PM   #2
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Re: Pondering Commercial Work


I did stricly commercial work before the economy crashed, and I lost my clients.

I funded the whole deal, invoiced every thirty, they held for thirty, then cut check.

At any given time I was 75-90 days out,....I know that sounds awful, and at first it seemed that way to me too.

But I was able to charge alot more, higher rates, higher mark ups,...And after a couple cycles of making REAL profits, I didn't mind it anymore.

I just got used to it, at first it can be a viscious cycle, but hanging tough will generally pay off.


If I were you, I wouldn't turn it down.
Sure theres negatives to anything, but great doors could open up for you along the way.

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Old 12-29-2010, 07:15 PM   #3
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Re: Pondering Commercial Work


Mike,

From your talk here I don't think you would have a problem with doing the commercial work.

I always check the companies credit before I accept work from them.

90 days seems to about normal as far as payments are concerned, so prepare yourself. If that means charging more than residential, then do it.

I do know that standards are realistic on commercial work. You don't have a homeowner saying that tile is off by a 1/16.

Give a few a try and see how you do...

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Old 12-29-2010, 07:15 PM   #4
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Re: Pondering Commercial Work


I should mention to,..typically your going to get alot more volume of projects doing commercial versus, residential.

Talk about repeat business,...Personally the company I was working for had over 50 stores across the states, among other stores that I wasn't involved with.

I had 4 different stores to be at, at any given time.
Not very many residential customers are going to throw that volume at you.
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Old 12-29-2010, 07:18 PM   #5
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Re: Pondering Commercial Work


Quote:
Originally Posted by Framer53 View Post

I do know that standards are realistic on commercial work. You don't have a homeowner saying that tile is off by a 1/16.

Not that I don't agree, but some of the worst tile jobs I've seen, have been in commercial settings.

Seems to me, speed is of the essence, more so in commercial, than residential.
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Old 12-29-2010, 07:23 PM   #6
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Re: Pondering Commercial Work


I'd go for it.

I haven't done tons, but what commercial I have done, has been very worth while.

Money is a bit of a wait, but if it doesn't turn you upside down while waiting, knowing you have money coming in 3 months can be nice.
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Old 12-29-2010, 07:23 PM   #7
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Re: Pondering Commercial Work


Mike, I have a limited acquaintance with commercial work. There's definitely a learning curve, but there are some good things about it.

Permitting is usually very similar to what you're used to in residential.
The money is better, which helps offset having to wait for it an extra week or three.
You don't have to deal with Aunt Bessie and her three ****sus.
Often, there's a maintenance guy who can help you out with the odd bit of info or an extension cord.
Free coffee! Sometimes even a decent cafeteria.

Can't help with licensing; there is none here.
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Old 12-29-2010, 07:24 PM   #8
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Re: Pondering Commercial Work


Quote:
Originally Posted by CCCo. View Post
I did stricly commercial work before the economy crashed, and I lost my clients.

I funded the whole deal, invoiced every thirty, they held for thirty, then cut check.

At any given time I was 75-90 days out,....I know that sounds awful, and at first it seemed that way to me too.

But I was able to charge alot more, higher rates, higher mark ups,...And after a couple cycles of making REAL profits, I didn't mind it anymore.

I just got used to it, at first it can be a viscious cycle, but hanging tough will generally pay off.


If I were you, I wouldn't turn it down.
Sure theres negatives to anything, but great doors could open up for you along the way.
X2 on the pay schedule, X2 on the profit increase mine was 20% Then they offered more work at a high rise they had but the remittance went from 30 day net to 90 day net. I just couldn't bring myself to accept those terms no matter how much work they had. Even if they had non-stop work I would get paid 4 times a year? Commercial work is great if you can get them to accept YOUR TERMS
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Old 12-29-2010, 07:26 PM   #9
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Re: Pondering Commercial Work


Mike, Sounds like you are getting calls from the business owners themselves. Dealing with a small commjercial business is not very different than dealing with a HO. It's the bigger jobs where Architects & a GC are involved that the pay tends to get bogged down. One thing about commercial work is it tends to move right along. Not a great deal of time spent on decision making as a HO might. Down time usually means delayed opening, closed or perhaps limited access.

It is generally tough to get around having a permit with commercial work. Too much visibility. But it all depends what you are doing & how your AHJ works. As for your licensing, I don't know, only one level of GC or subs out here. Your lic. is good for anything, but getting bonded may be another question.

With your attitude, knowledge & abilites you should go for it. I believe you will excel.
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Old 12-29-2010, 07:28 PM   #10
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Re: Pondering Commercial Work


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Even if they had non-stop work I would get paid 4 times a year?
That's not really a factor once you get rolling. Never been in exactly that situation, but for 15 years I worked as a sub, getting paid every 30 days.

Just a matter of budgeting.
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Old 12-29-2010, 07:30 PM   #11
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Re: Pondering Commercial Work


I have done a little commercial, my brother does it solely.
Just realize you are financing them and do what the banks do, charge them for it.

If it is going to be 90 days then figure out your costs of borrowing for 90 days and charge it to them, plus a little.

If you can not do that then it really is not worth it.
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Old 12-29-2010, 07:36 PM   #12
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Re: Pondering Commercial Work


When you start use your operating capitol very carefully, if done right and you set your accounts up right the only thing you will be out of pocket on is payroll...

I don't turn anything down... look at it as a challenge, you are stepping up to the next level. That should be exciting and fun doing the same 'ole, same 'ole gets boring, push yourself and it will pay off.... the trick is keeping a balance of commercial and residential to keep the cash flow flowing...
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Old 12-29-2010, 07:45 PM   #13
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Re: Pondering Commercial Work


Mike,
I have done very little commercial on my own, but I was a Carpenter in a large insurance company for 6 years.

If you are dealing with corporations, the money can be very good.
Where I worked I did mainly repairs (lots of doors), and other mundane BS. When they did a build out a commercial construction company would come in and do it.

When I heard what these guys got I almost died.
A 12'X12' office built into a corner.
2 walls.
One door.
Steel track shot right over the existing carpet.
Top track screwed to the ceiling grid.
So you have 24' of wall, and a steel door frame with a wood door.
They would add a light if necissary, and a VFD to control the air.
Grand total- $42,000.00

So there can be good money.


But also, lots of times these jobs need to be done after hours.
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Old 12-29-2010, 07:51 PM   #14
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Re: Pondering Commercial Work


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But also, lots of times these jobs need to be done after hours.
Yep.

And at one bank I did some work at, I was locked out and had to wander around for an indefinite amount of time until the tellers were done cash out.

Annoying.
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Old 12-29-2010, 08:00 PM   #15
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Re: Pondering Commercial Work


I can honestly say, commercial work was the best thing I ever did, or had to do.

In three months time,
I was able to pay ALL my bills, direct & indirect overhead, materials needed, and sink 15 grand away in my personal account.
Free and clear, working at my pace, and my schedule.

October of '08,...all my work got cut.

I had that client since '04. (great relationship while it lasted)

What I'd give to roll back the clock and be doing it again.


I guess the real bummer is, I have always lived within my means, so I can't take much blame for the economic situation.
Just took the cards I was dealt.
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Last edited by CCCo.; 12-29-2010 at 08:04 PM.
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Old 12-29-2010, 08:07 PM   #16
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Re: Pondering Commercial Work


Interesting how so many are saying the money is really good. I guess I was under the impression of them bidding it all out to lowest bidders all the time and grinding you down on stuff.

The reason I'm wondering about the licensing and such, is I'm just wondering if we could do one here and there just to get our feet wet and see how it goes, rather than have some long and expensive ramp up to get set up and then just to decide, nope, don't want to do it.
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Old 12-29-2010, 08:13 PM   #17
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Re: Pondering Commercial Work


Once you get an established relationship,...If they like your work, they will keep having you back.

Never bid nothing, set up an agreement from day one, called out on over 100 site visits, with no questions of cost.
Just send the bill.

Bath remodels might be alittle different, but I doubt its much.
Establish them relationships Mike, don't turn them away.

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Old 12-29-2010, 08:16 PM   #18
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Re: Pondering Commercial Work


I've spent a majority of my plumbing experience in commercial, mostly large commercial jobs like hospitals, clinics etc. Having done both sides of plumbing I don't think it's a big deal. You have a good head on your shoulders These type of jobs are when a new business moves in to a leased space and they re-arrange everything......including the bathroom, breakroom etc.

The tennant build-outs are pretty sweet if you have an efficiant company with a good crew. Margins are better overall but if it's your first time in commercial it's easy enough to bid where even if your off a little on the numbers it wont bite you too hard....it's a great place to start.

Restaurants I would avoid like Aids.

A couple of times starting out the "scope of work" bit me in the a$$ but I learned to be smart. Commercial is just different but not in the sense of being difficult.....if that makes sense.

FYI: I get faxed "invitation to bid" projects every week and most of them I toss out. Companies are taking advantage of the economy and wanting everybody to bid on a project. The last one was over ten companies bidding.....no thanks.

The bath remodels for a tennant build out is great though and you already have the tools and knowledge to get it done. Just read up on ADA and buy some safety equipment and know how to use it.

Go for it Mike, you got what it takes.

Mike
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Old 12-29-2010, 08:17 PM   #19
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Re: Pondering Commercial Work


I'll tell you this, when the commercial work dried up for me.
I over bid almost every residential job I bid in '09....The future was looking grim.

I finally basically cut my rates in half, to start winning jobs, and still get told I'm expensive, go figure.

My experience tells me the real bidding wars, are in the residential market.

If your used to the competive race we have to compete in already, commercial work should be a breeze for you to land.
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Old 12-29-2010, 08:19 PM   #20
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Re: Pondering Commercial Work


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I've spent a majority of my plumbing experience in commercial, mostly large commercial jobs like hospitals, clinics etc. Having done both sides of plumbing I don't think it's a big deal. You have a good head on your shoulders These type of jobs are when a new business moves in to a leased space and they re-arrange everything......including the bathroom, breakroom etc.

The tennant build-outs are pretty sweet if you have an efficiant company with a good crew. Margins are better overall but if it's your first time in commercial it's easy enough to bid where even if your off a little on the numbers it wont bit you too hard....it's a great place to start.

Restaurants I would avoid like Aids.

A couple of times starting out the "scope of work" but me in the a$$ but I learned to be smart. Commercial is just different but not in the sense of being difficult.....if that makes sense.

FYI: I get faxed "invitation to bid" projects every week and most of them I toss out. Companies are taking advantage of the economy and wanting everybody to bid on a project. The last one was over ten companies bidding.....no thanks.

The bath remodels for a tennant build out is great though and you already have the tools and knowledge to get it done. Just read up on ADA and buy some safety equipment and know how to use it.

Go for it Mike, you got what it takes.

Mike

Half of the above got erased somehow and I don't feel like figuring it out and re-typing it.

Mike

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