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commercial work

3346 Views 3 Replies 4 Participants Last post by  Tmrrptr
how do you get paid for commercial jobs when your a small company? ask for money every week or all the money before the job is done? paying help would be hard to run a big job without getting paid. If I run 3 guys for 3 weeks and buy all material it would drain me waiting to get paid when the job is complete. I do residential smaller jobs so waiting for a check at the end of 1 or 2 weeks is no problem. I've never been stiffed because I do good work, but commercial is a whole different beast. I've done small commercial jobs. taking that next step to get bigger is going to be hard. any suggestions?
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I can only think of 2 ways to do larger commercial jobs.

A. convince the hiring party (GC, architect, etc.) to provide a down payment to cover materials and/or a portion of the labor

B. bank some capital befroe-hand to ride out the wait period on the payment.

Sad thing is, almost every commercial job I've done, when I ask for a down payment, the GC looks at you like your from outer space. WTF? Do you really think the GC does anything without getting some $$$ in hand before he starts? I highly doubt it. When I approach them with this, they look like they've been caught with their hand in the cookie jar. If they don't want to play ball by my rules, I go play elsewhere. The ones who value my service will now alway account for the fact that I want and get a down payment too.
From my experience, I know getting the bid approve by the corporate office takes a life time. Also, most will rebuttal the payment plain. Some will require backround checks. All will require ins. info.
In my experience, commercial is pretty much same as any other...
But you won't get any money up front.

It will pay in phases and stages, but they are professional at watching funds, so there will usually be a wait for money after you submit the bill for a progress draw... (and they know money is better off in their pocket than yours, drawing interest for THEM, so you may wait 30 days, or even 60 and 90 for some builders... jerks!)
When a builder gets strapped for cash, (they all will, especially now), I've seen them wait 'til the day before an expected payment was to be delivered, and have some 3rd level accounting person call with a ridiculous question regarding an invoice, and ask that additional extensive paperwork be completed and delivered before payment.
(I've had LARGE corporations claim something was misplaced, dropped on the floor, and even that someone went on vacation.)
And then there most likely will be a retention... of possibly 10%, that could be held back for a year, or even two! after final inspection, or even occupancy!!!
...You really got to watch that one!
Depending on the number of units, or other factors, it could end up being a LOT of money you will not get for possibly a LONG time!
...It WILL NOT be sent to you... unless you send the proper request for that money at the appropriate time.

Big builders have big lawyers that draw up their big contracts.
Lawyers LOVE to write things only another lawyer (on the clock) can decipher, at your expense.
Any subsequent dispute benefits all bottom feeders.

Watch for a contract that allows THEM to change terms and conditions for billing submission without your prior approval.
We've had them increase our amount of paperwork extensively which seriously affected our bottom line!

Good luck!
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