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Does everyone here do residential?9/1/20
How many here do commercial?.....or do you guys do both?.....I've done nothing but commercial for the last 30 years.
Commercial scares me. lol
Mostly residential. Some small commercial.
Commercial scares you?...why?.......getting paid??......that's the hard thing about doing commercial.
Mostly residential, some store front/restaurant work here and there
Mauricio, I just hate laminate work, and there's little ins and outs to commercial I'm just not familiar with. It's a different ballgame than residential face frame stuff.
We do 99.5% commercial and wholesale with only a tiny bit of residential to contractors. Very rarely we will get a local in wanting some cabs for themself that we will do as a courtesy but its like 1 a year (less if we can help it).
I think residential can be broken up into several segments though. Straight residential to the homeowner (I could never do it), and then through a contractor. There are even sub catagories to the contractor sales, do you have the homeowner in to design/pick cabs and layout and bill the contractor, does the contractor hand you a set of plans from the architect, how much interaction do you have with the homeowner, and so on. Selling direct to the contractor with no homeowner interaction isnt far off from commercial work as far as the arrangement. Just different materials.
I could probably tolerate more residential as long as the GC/Architect handle all the customer interaction and just hand me the drawings. Very rare around here. Most any contractor here wants to be able to dump their homeowner on you like your Home Depot and still make their margin on the cabs. Not happening.
We do mostly commercial (80 %) with a few residential jobs thrown in mostly for fill between commercial jobs. The thing about commercial is what I call the nut. It is how much you have to lay out before getting paid. You have to remember that you will work min. 30 days before you put in a pay app which is usually due on the 25th for work preformed thru the end of the month. Then that pay app has to be approved by the GC, sent to the Arch for his approval, which then has to be sent to the owner to issue payment. The owner may may have to get approval from whoever is supplying the construction financing as well. All said and done You submitt your pay app by the 25th and you are supposed to get paid by the 10th of the following month but it is usually the 25th or later when you get a check. So you are usually 60 days in the hole before getting a draw. That includes your material, labor and over head. Oh by the way when you do get that draw there is this thing called retainage, which means your draw gets cut by 10%. That is what the nut is, the bigger the job the bigger the nut. When you get into a large job there is a lot of people who can not or won't give themselves that much exposure. Of course that means less competition. You and the other su
(sorry posted before I was through) So in commercial you can have lot of money put out before it starts coming in. The good thing is that in commercial nobody cares how much money you make, only that you finish on schedule (or ahead), furfill your contract, and do not cause any problems. The only thing they ever ask is "can you be done by Tuesday" There is a lot more money to be made in commercial but there also is alot more risks as well. Oh yea one more thing about that retainage, I usually put 10% extra on every job, so when they deduct it, it does not hurt but six months from now when I open the mail box and get that retainage check it is like hitting the lottery.
After the recession I added this clause to my quote form. In most cases it has provided a strong argument for cash flow needs, sometimes i let GC pay materials direct and turn over subcontracts to GC for direct payment, I do not like managing a granite / Quartz supplier. remember most subs and materials supplier want to be paid on time whereas a GC has a time luxury of "Maybe When " on larger jobs 50-250 K this is not needed for the most part but I am not going to finance 2 vanitys or an 8 foot break room for 60-75 days.
anyone else notice how fast Wood went up recently American suppliers raise prices due to tarrifs and trade wars, I am not convinced We are winning anything...
this is my disclaimer
"Notes: In order to keep the GC Critical path of construction and Due to the current economy and distributors and suppliers not stocking beyond 15 to 30 days on custom materials Mcgrew may Invoice for stored materials if Notices to proceed or Needed Approvals are not provided On a timely basis for material procurement and Fabrication. This needs to be realized as to not cause delays in delivery of manufactured products. This quote is good for 30 days unless bid tab and more infor for scheduling is provided. Stored Materials are listed on the insurance binder provided"
i know the feeling about the small jobs, I just got done doing the paperwork for one corian countertop. A 32 page contract, e -verify for employee's, then a pay application, partial lein waiver, warranty form, final pay app, and final lein waiver, and then the warranty form, all had to be notarized. That took longer then making the stupid top. We did a high rise in Nashville where we set kitchettes and vanity cabinets and another company set the stone tops. It was one contract under the top company and he was lucky I was there, he had no idea how to do the paperwork, he would still to this day be waiting to get paid. It was for a major General Contractor and you know how they can be very picky about their paperwork (or just another way to delay paying you)
70 Commercial and 10 residential, 20 whole sale counters
10 % for shop drawings, 50 for materials draw before we start cutting. Generally 35 when install starts, 5 held until job is
I changed all jobs when Covid hit. No buying materials for any job without the clients money. Period.
I own a stone shop along with a cabinet shop and itís gotten a lot easier to work with cash on the books then looking at accounts recvble
If short answers on this thread were rewritten in right format they would actually made some very good haiku examples.
Get on the Woodweb
I try to stick with residential. I find commercial jobs on average can take longer to get paid in full and you have to always make sure to understand the all of the terms with commercial jobs that you don't typically run into with residential (workers comp, etc.)
This is a perfectly timed post for me, I have been thinking about how to present an opinion for a while.
We are generally the most experienced and highest overhead subs on the job, but thrown in with the dregs of the business.
The crux of my question is; has anyone here simply changed the rules on the commercial builders with any success?
I look forward to feedback, I have a lot to add, but when posts are too long they tend to lose some impact.
The payment terms for the big shops and large GC's are what they are. Our arrangement is pretty much like cabinetmakers but its one of the rare places where we are lucky to be in a smaller market. No work is started, no materials are ordered, without deposit.
Its plainly outlined in our bid in the first line to exclude our bid if they are unwilling to accept our payment terms.
We have never had anyone hold us out for the 10% retainage even when its offered. But again, most of our GC's are in the same boat and they understand the issues of a small shop. We are not their, or their customers, bank.
One exception I have seen is a local corian fabricator that requires a deposit with balance due upon completion. He is mostly commercial.
He made the change after the crash.
Funny you should ask. I built my career on commercial projects, sweet spot was 150.K to 600.K, largest was 2.2M Most recently I got fed up with the nonsense with architects and GC's. These days we are working the residential market exclusively. Always get a deposit, progress payments and when I go on the estimate if I cannot strike a rapport with the customer, I walk gracefully. After being in the workforce for 50+ years, I am simply done with the nonsense and my new customers appreciate our service.