# So what is it about commercial work?



## Msargent (Jan 16, 2009)

Do you get streched so lean before getting paid? getting 30-60-90 days out on final payment?


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## Mantis (Aug 4, 2008)

Msargent said:


> Do you get streched so lean before getting paid? getting 30-60-90 days out on final payment?


Most times doing commercial jobs, I dont expect anything before 30 days. Its very common for payment to be well over 30 days here. There is one commercial contractor we do occasional work that pays around 60 days and holds retainage. Last summer we didnt get that retainage paid until 6 months after the job was completed.


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## Msargent (Jan 16, 2009)

WOW and do you get a deposit usually?. Thanks for youre help


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## RCP (Apr 18, 2007)

No deposits, you have to be able to wait for payment. Many do draws on a monthly or bi-monthly schedule, if you don't get your invoice in on time, you wait.
You also have to work around other trades and deal with the damage and schedule changes.
Bid to the plans (note plan date on bid) and document any change orders.
Be specific on your bids, especially when it comes to exclusions.


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## Mantis (Aug 4, 2008)

Msargent said:


> WOW and do you get a deposit usually?. Thanks for youre help


Nope. We do the work, submit an invoice, and wait. Some commercial builders (and res too) want to get some money from building owner so they dont have to fork over their own cash to pay subs. So they'll stretch payment out as long as they can. You can try to request a draw once every 30 days for work completed. We have done that before on large jobs.

Sometimes you'll run into situations where a GC will do invoice runs on the 30th of the month, but you complete your job on the 5th. So, you submit your invoice on the 5th and have to wait til the 30th for it to be processed. Then you'll need to wait until the following 30th for the check to be released. There's 55 days.


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## Msargent (Jan 16, 2009)

So then the trick is to have multiple jobs running to keep cash flow comming in. Now way I could do that atm numbers are too tight and not enough years in business to fork out my own cash and go that long with payroll.You would need bank note to last that long with interest figuered into price.


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## Wolfgang (Nov 16, 2008)

^^^^ and those are just a few of the reasons I dont do commercial work.


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## upnorthmn (Jun 14, 2009)

The majority of our work is commercial. All of the above posts about payment are common in construction, government, institutional, etc. 5% retainage is held until the owner makes final payment to GC. (Usually months later)

Re-paint work through the owner seems to be about 30 days typically. 

GC's never gives a down payment.

Normally there isnt the personal "hand holding walkthrough" with the customer in a re-paint like there is in residential.

The owners typically cut your check when they are paying there other monthly bills. I always bill monthly on work whether its new construction or a big re-paint. There is no way I could make weekly payroll and pay monthly bills on-time without a line of credit through the bank available, when big labor(prevailing wage) and big material bills are happening.

The few residentials we do are nice with the coffee and the check waiting for you at the end of the job.


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## jason123 (Jul 2, 2009)

The one good thing about commercial for me is the atmosphere in 90% of the jobs they are,, you the boss do your work and answer to nobody, it feels a lot different than most res jobs, mind you some res jobs are pretty laid back too.. Small commercial jobs I have been paid pretty quick. My worst was invoicing the company than a month later them telling me I have to fill out this ins packet in order to even start processing ( what a shcam ) It took a long time.. To top it all of we get paid In US funds and our canadian banks love to hold those american cheques + your dollar is going into the bucket right now.


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## nEighter (Nov 14, 2008)

I have been hung up many times doing commercial. OH and boy I let them know if they jerk me around! One more reason I don't do little add on things for nothing anymore.


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## jmda (Nov 14, 2007)

We are doing some more commercial and one of the companies we have worked for recently is 60 day pay. Now I had just finished some nice residential jobs and financed it out of the profit, so when the check does come, it is pure profit. We plan to keep some of that in the company to finance the next project.

Obviously once you are doing commercial work regularly the checks will start to roll in from work 30 60 days ago and will pay your current operations.

We are hoping to get to that point.


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## nEighter (Nov 14, 2008)

that is the hardest part. Gettting your money up and keeping it there as a buffer. It is a beaotch starting out, but once it happens it is cool. You just have to keep your head about you and not spend it all.


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## drcustom (May 23, 2009)

*Commercial Doom and Gloom?*

Why so much gloom and doom about Commercial work?

I just started aggressively moving into the commercial market this past few years. Many of the posts on here and the PDCA have helped my transition greatly with things like.....tracking numbers, hiring and generally inspiring threads from companies who have grown and operate viable and highly succesful companies. Thanks! I still have tons to learn. Here's my two cents worth on Commercial work.

Are you self-employed or a business owner? I am trying to move to the latter.

I prefer commercial work (small to medium) for the following reasons:

1. Usually bidding against other reputable and well ran companies. Not competing against the guy who just bought a rig and doesn't carry insurance, out to make a quick buck.... happening often in this economy.

2. Many can still be custom and require detailed and quality work. Not just slap it on.... blow and go. 

3. Effeciency - One $15k commercial job could equal 4 residential jobs. There is one site to drive to, one product order, one crew, one work plan.

4. Gives you time to market, run your business with out the tool in your hand and grow as a company.

I have had issues with cash flow. Planning well helps. Talking to super/gc and developing a relationship also helps. Before submitting a proposal I find out when draws take place. I will adjust my price accordingly.

I have had jobs that took out draws every 60 days! I worked out a deal with the super to submit my invoice upon delivery of materials, so I could get paid with in a week of completion vs waiting an additional 60 days. He held the check and released it upon final touch-ups. 

It is hard with the finances, but worth it. I am hoping to have some cash equity built up soon so I don't have to deal with these issues. 

Optimism!


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## WisePainter (Dec 27, 2008)

Commercial is for those that don't want to live past 55...I quit after I realized every day in commercial was costing me a year off of my life...


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## Softy (Jul 19, 2009)

WisePainter said:


> Commercial is for those that don't want to live past 55...I quit after I realized every day in commercial was costing me a year off of my life...


 and I bet when painting you have beer and cigarette in one hand and paint gun in other...


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## Joepro0000 (Jul 27, 2009)

jmda said:


> Obviously once you are doing commercial work regularly the checks will start to roll in from work 30 60 days ago and will pay your current operations.
> 
> We are hoping to get to that point.


Thats where we are at now, but still sometimes 1 GC with a super long'd delayed payment can make problems arise.

Another thing, change orders arise alot in commerical more than residential, and you can hit the jackpot on a job. We actually completed a job where out contract was around 13k, and we had another 14k in change orders.


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## Joepro0000 (Jul 27, 2009)

We do prefer small to medium size jobs though for cash flow problems.


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## Woody (Jan 7, 2010)

WisePainter said:


> Commercial is for those that don't want to live past 55...I quit after I realized every day in commercial was costing me a year off of my life...


You are "wise"


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## vermontpainter (Dec 24, 2007)

If there are any Hemingway fans here, the lure of commercial work is covered very well in The Old Man and the Sea.


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## MAK-Deco (Apr 17, 2007)

I guess you have to define commercial, just as there are many different aspect of residential there are different aspects of commercial.. and not to be confused with industrial which I always felt was a category of its own.


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## Woody (Jan 7, 2010)

I wanted to deal with the owner... I pre-fered repaints in commercial, or the industrial field. 
My motto was; "difficult job, NO problem"
Now I just sit at home...playing with my winker...ra, ra


Stay Frosty


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## antonito (Nov 2, 2009)

Joepro0000 said:


> Thats where we are at now, but still sometimes 1 GC with a super long'd delayed payment can make problems arise.
> 
> Another thing, change orders arise alot in commerical more than residential, and you can hit the jackpot on a job. We actually completed a job where out contract was around 13k, and we had another 14k in change orders.


This is what kills so many new companies. 60 days is how long you should have to wait, in theory. In practice, you'd better either have the credit or savings to not see that final payment for months, just in case, or you're going to be eating ramen noodles for a while when some schmuck in accounting decides to challenge your final completion date by moving the goal posts. Nothing like having to go back for a few hours every month to paint an electrical closet floor here, a vent shaft there, all of which is grounds for withholding your last 10% and the holdback. (not really, but go ahead and sue them)

As for extras, I had to laugh the other day. We had a job for $3,000 for a two room guardhouse, but had to tack on $15,000 to sand down and seal the wood ceiling which was called out as "prefinished".


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## SPM Group (Mar 11, 2010)

i'm glad to come across this post and hear some of the stories you've guys experienced..

I too have had the same problem with a GC. Only ours are stretched to 90 days and beyond.. even longer. Makes me wonder if the GC is ever going to pay us. Dosen't look like it and when that happens, it's a sad day for us. 

That's why I usually have a condition with GC's and let them know i need some form of payment to bring to balance closer to 0 rather than be at several thousands in the red..


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## brushmonkey (Jan 4, 2010)

That's the Fng truth! As painters we are usually the last on the list of importance in the grand scheme of it all & the last to get paid as they (clients) slowly run out of money from cost overruns. Ive had GC's try & deviate from the original contract (for less of course) because of this very problem. I'm sure everyone here has experienced this at one time or another.


WisePainter said:


> Commercial is for those that don't want to live past 55...I quit after I realized every day in commercial was costing me a year off of my life...


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