You don't just transition from residential to commercial. You have to have someone who has substantial experience in commercial to teach you the differences. The codes are different, the power is different, tools are different and the costs of mistakes are much higher. Your best bet is to find an outfit that does only commercial and merge the two and cross train them.
Look at your business demographic. Pull all your email contacts and previous residential customers who may also have businesses and make an announcement as to your intention. Start with whom you know first. Send to everyone you've dealt with. Don't take on to much. Commercial businesses are usually are on tighter schedules.
I would suggest getting involved as an electrical apprentice with a person or company that has a lot of commercial experience.
The electrical principals are the same in both residential and commercial electric but the materials and meathods can be quite different. Learning from experienced electricians is allways your best start.
We do both residential and commercial. Nothing different than mode of payment, I believe. Residential is like a cash and carry. Commercial may take some time. But make sure you get the quote signed/approved by the customer beforehand.
Julia. We do about 70% high end residential (Big Sky Ski Resort custom homes in Montana) and about 30% Commercial & service work. We have found that the residential and service base is more profitable and quicker paying than most commercial projects. As Tony noted below, you are hung out to dry for payment, much of the time having a considerable amount of paperwork to process ie; submittals, O&M's, change orders and on D&B jobs, weekly payroll. All this would be worth the doing except that for some reason our competition seems to think it's the holy grail to work on a large commercial project and bids these things into the dirt. I don't know about your operation, but we can't take a job at 20% OH&P. I would say to just target those commercial accounts that you have a relationship with. Design/build is a good niche and a customer usually appreciates your efforts to layout their project and understand they are paying a little more for the service.
Hopefully you already have commercial experience or have hired someone that knows the ropes. I have done some networking with the local chamber of commerce and other groups. Also the property management groups that maintain many malls and strip centers, but they are slow to pay 30-90 days. You could also start bidding work with your local general contractors, that's usually a lot of bid work and only about a 10% return due to competition.
There are two basic types of commercial work available to electrical contractors in NJ and surrounding areas. The two types are, bid and spec, and mom and pop.
Bid and spec is basically becoming a free pricing service for all the GC's ( general contractors) you plan on bidding to. It takes time and money to hone your skills and become proficient at preparing a bid package and being competitive as well as profitable. The latter being the most important. What good is it to win all the jobs and not make any money on them? Or to make a very small margin. All the effort and expense it takes to operate a professional business with a good reputation makes it very unappealing to work "cheap". Yet many of our competitors do just that. It is too bad there are no standards for charging a fair rate and not allowing anyone licensed to undercut in the area.
The second type of commercial work is "mom and pop". This is the same thing as residential only it is a commercial property. Sometimes it is a house where a business is operating out of it. But the idea is that you are working for a person that makes the decision and can write you a check when you are done. That is the best way to operate your business. No or little receivables. I don't understand why so many contractors are willing to be a bank and finance the job for who they are working for.
I believe we should always get a deposit and progress payments leaving as little at the end as possible. That way it keeps us secure from getting ripped off in the end.
Sometimes mom and pop need a price or take bids, and that is a decision you have to make.
Someone called me to give an estimate on installing a line in the garage for a kiln and troubleshooting some other issues in her home. I gave her a ballpark on the line for the kiln and our rates to do the repairs. I told her the other items need to be worked on the determine the issues. She insisted on me coming by to give a "free" estimate, which is not free, it means I am paying for it. She also got some other electrical contractor to go there and give her a free estimate on it and she isn't satisfied with that. She wants me and who knows how many more people to come and be a free pricing service.
I have been at this on my own for over 30 years and don't need any more practice. I am usually booked up for a week or two in advance and don't need to waste my time on stuff like that. That is a decision you have to make every day to not waste your time. Many folks want me to come in the night to give a free estimate on work. It's free and still has to be at my inconvenience and after hours or weekends. Commercial work eliminates that type of thing. Regular business hours make it easier. But you must avail yourself for emergencies and service your customer expediently.
To start with you need to know what commercial electrical work is. Its a very tough market to compete in because so many people work out of there garage with no office. they just send guys straight to job. So no office is needed. Better know what your doing if you want to be competitive.
Begin with smaller commercial projects that are similar to residential projects so that you can gain the experience that comes with the codes and materials used in a commercial project. Our work is predominately commercial so when we have a residential project we find that there is more interaction with the client because of their ownership of the property. We have crews specialized in both types of services.
Hi Julia, if you’re a big enough company, consider hiring an estimator with commercial experience. Look for someone who already has good network of contacts in that field. You will cover having the leads potential and someone who will price things so you can still turn a profit on the job.
I believe this type of move is a marathon, not a sprint so you have to be patient.
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Answers (1-10)
You don't just transition from residential to commercial. You have to have someone who has substantial experience in commercial to teach you the differences. The codes are different, the power is different, tools are different and the costs of mistakes are much higher. Your best bet is to find an outfit that does only commercial and merge the two and cross train them.
Look at your business demographic. Pull all your email contacts and previous residential customers who may also have businesses and make an announcement as to your intention. Start with whom you know first. Send to everyone you've dealt with. Don't take on to much. Commercial businesses are usually are on tighter schedules.
Jeff
I would suggest getting involved as an electrical apprentice with a person or company that has a lot of commercial experience.
The electrical principals are the same in both residential and commercial electric but the materials and meathods can be quite different. Learning from experienced electricians is allways your best start.
We do both residential and commercial. Nothing different than mode of payment, I believe. Residential is like a cash and carry. Commercial may take some time. But make sure you get the quote signed/approved by the customer beforehand.
Julia. We do about 70% high end residential (Big Sky Ski Resort custom homes in Montana) and about 30% Commercial & service work. We have found that the residential and service base is more profitable and quicker paying than most commercial projects. As Tony noted below, you are hung out to dry for payment, much of the time having a considerable amount of paperwork to process ie; submittals, O&M's, change orders and on D&B jobs, weekly payroll. All this would be worth the doing except that for some reason our competition seems to think it's the holy grail to work on a large commercial project and bids these things into the dirt. I don't know about your operation, but we can't take a job at 20% OH&P. I would say to just target those commercial accounts that you have a relationship with. Design/build is a good niche and a customer usually appreciates your efforts to layout their project and understand they are paying a little more for the service.
Hopefully you already have commercial experience or have hired someone that knows the ropes. I have done some networking with the local chamber of commerce and other groups. Also the property management groups that maintain many malls and strip centers, but they are slow to pay 30-90 days. You could also start bidding work with your local general contractors, that's usually a lot of bid work and only about a 10% return due to competition.
There are two basic types of commercial work available to electrical contractors in NJ and surrounding areas. The two types are, bid and spec, and mom and pop.
Bid and spec is basically becoming a free pricing service for all the GC's ( general contractors) you plan on bidding to. It takes time and money to hone your skills and become proficient at preparing a bid package and being competitive as well as profitable. The latter being the most important. What good is it to win all the jobs and not make any money on them? Or to make a very small margin. All the effort and expense it takes to operate a professional business with a good reputation makes it very unappealing to work "cheap". Yet many of our competitors do just that. It is too bad there are no standards for charging a fair rate and not allowing anyone licensed to undercut in the area.
The second type of commercial work is "mom and pop". This is the same thing as residential only it is a commercial property. Sometimes it is a house where a business is operating out of it. But the idea is that you are working for a person that makes the decision and can write you a check when you are done. That is the best way to operate your business. No or little receivables. I don't understand why so many contractors are willing to be a bank and finance the job for who they are working for.
I believe we should always get a deposit and progress payments leaving as little at the end as possible. That way it keeps us secure from getting ripped off in the end.
Sometimes mom and pop need a price or take bids, and that is a decision you have to make.
Someone called me to give an estimate on installing a line in the garage for a kiln and troubleshooting some other issues in her home. I gave her a ballpark on the line for the kiln and our rates to do the repairs. I told her the other items need to be worked on the determine the issues. She insisted on me coming by to give a "free" estimate, which is not free, it means I am paying for it. She also got some other electrical contractor to go there and give her a free estimate on it and she isn't satisfied with that. She wants me and who knows how many more people to come and be a free pricing service.
I have been at this on my own for over 30 years and don't need any more practice. I am usually booked up for a week or two in advance and don't need to waste my time on stuff like that. That is a decision you have to make every day to not waste your time. Many folks want me to come in the night to give a free estimate on work. It's free and still has to be at my inconvenience and after hours or weekends. Commercial work eliminates that type of thing. Regular business hours make it easier. But you must avail yourself for emergencies and service your customer expediently.
To start with you need to know what commercial electrical work is. Its a very tough market to compete in because so many people work out of there garage with no office. they just send guys straight to job. So no office is needed. Better know what your doing if you want to be competitive.
Begin with smaller commercial projects that are similar to residential projects so that you can gain the experience that comes with the codes and materials used in a commercial project. Our work is predominately commercial so when we have a residential project we find that there is more interaction with the client because of their ownership of the property. We have crews specialized in both types of services.
Hi Julia, if you’re a big enough company, consider hiring an estimator with commercial experience. Look for someone who already has good network of contacts in that field. You will cover having the leads potential and someone who will price things so you can still turn a profit on the job.
I believe this type of move is a marathon, not a sprint so you have to be patient.