Commercial energy projects versus domestic work

Aug 29
3 min read

Updated: 3 days ago

Introduction

A domestic installer wins a commercial project. It is worth twelve times a typical job, and the business treats it as the same work at a larger scale. Payment terms are sixty days, retention is held, the specification changes twice, and the project consumes the entire team for a quarter.

The revenue is real and the business nearly fails on cash flow. Commercial and domestic work share the technology and share very little else, and installers moving between them are frequently surprised by every difference except the job size.

1. Commercial energy projects versus domestic differ in how they are won

Two entirely different sales processes.

Domestic work arrives through search, referral and comparison sites, decided by one household in weeks. Commercial work comes through tenders, specifiers, consultants and relationships, decided by several people over months or years. The relationships that produce those invitations take years to build and cannot be bought quickly.

2. Expect a much longer sales cycle

Plan the pipeline accordingly.

Budget cycles, approvals, board decisions and procurement processes mean a commercial enquiry may take a year to convert. A business with only commercial work in its pipeline has nothing arriving for the first several months.

3. Understand the cash flow difference

Where the danger sits.

Domestic customers pay deposits and settle on completion. Commercial clients pay on invoice terms, hold retention, and may require staged applications. Growth in commercial work consumes working capital rather than producing it. A business funding its own growth from cash flow will feel this within one large project.

4. Price for the contract, not just the installation

The costs that do not appear domestically.

Site inductions, method statements, risk assessments, insurance levels, programme meetings, and compliance documentation. These are real hours and they are frequently omitted from a price built up from domestic experience.

5. Read the contract properly

An unfamiliar risk.

Liquidated damages, retention, payment terms, variation procedures and liability caps. Domestic work rarely involves negotiated contracts, and installers signing standard commercial terms without advice accept exposures they have not priced. A few hundred spent on advice before signing is cheap against a liquidated damages clause.

6. Be honest about capacity

The mistake that damages both sides.

A project consuming your whole team means domestic work stops, referrals dry up and the recurring base weakens. Deciding what proportion of capacity commercial work may occupy protects the business that is paying the bills.

7. Recognise the different technical demands

Not simply a larger version.

Three-phase supplies, integration with building systems, metering requirements, and performance obligations that may be contractual. Assuming domestic competence transfers directly is where projects go wrong technically.

8. Build relationships with the people who specify

Where commercial work originates.

Consultants, energy managers, facilities teams and contractors decide who gets invited to price. This network takes years to build and is the actual asset in commercial work, more than any single project.

9. Decide deliberately whether to do both

They compete for the same attention.

Running both well requires different people, different processes and different cash management. Many installers do it successfully, and the ones who struggle are usually those who drifted into commercial work rather than choosing it.

Start with a small commercial project rather than a transformative one. A modest job teaches you the contracting, the documentation and the payment behaviour at a scale where mistakes are survivable, and it gives you the reference that makes the next one possible.

Conclusion

Treat commercial work as a different business rather than as domestic work at a larger scale.

Expect a longer sales cycle driven by budgets and approvals, plan for payment terms and retention that consume working capital, price the contract administration as well as the installation, read and take advice on commercial terms, decide what share of capacity commercial work may take, recognise the different technical requirements, build relationships with specifiers and consultants, choose deliberately whether to run both, and begin with a small project rather than a large one.