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What does it mean to be 'commercial' and how does it benefit your business?

Do you adopt a 'commercial' mindset when entering into and delivering contracts for main contractors or clients? If not, you could be harming your business profitability and long term success.

Let's start with looking at what it actually means. According to Dictionary.com, the word commercial is defined as:

"of, relating to, or characteristic of commerce. engaged in commerce. prepared, done, or acting with sole or chief emphasis on saleability, profit, or success: a commercial product; His attitude toward the theatre is very commercial."

Note the inclusion of the words 'profit' and 'success' - positive objectives that every business is striving for. So why then is 'being commercial' often regarded as something that only bigger businesses need to be concerned about, or that it is seen as over the top and would simply mean we would have less time to do our day job, whatever that may be?

Being commercial is associated with being contractual. Unsurprising, perhaps, when you consider that contracts are essential to protect both the employer and supplier in a commercial relationship - but what does a contract do exactly?

First and foremost, contracts set out the obligations and entitlements. If you are entering into a contract you will have obligations (duties) to carry out and complete to a certain standard, by a specific date. You are expected to comply with directions and receive instructions from your employer, and you must observe, perform and comply with the stated procedures. You must also work safely in accordance with site rules, and there will also be an obligation for you to insure and protect against injury to persons and property.

What you get in return are rights or entitlements. These are chiefly to be paid the contract price, to be paid it in instalments, and to be paid any variations. You have the right not to be hindered or prevented from carrying out the works, and your entitlements must be assessed fairly and objectively. And you will also want to ensure recognition of legally enforceable rights.

In order to comply with a contract and be entitled to all these things, you must play by the rules -unfortunately, that is not always easy to do, even to the point of understanding the rules of the game in the first place!

Remember that 'being commercial' is about being focused on "profit or success" and this makes it vitally important to use contracts and know the rules of the game. Only when we know the rules should we start the game. And once we are expert at the rules, we can play the game more strategically to our commercial advantage.

There are lots of factors to consider in the contracting game, but ultimately it is about having in place a fair contract which is balanced and will compensate you - providing the rules are followed. That means being clear about everyone's expectations for control of time, money and quality.

Arriving at a fair contract will require some focus and dedication, but it is an investment in time that will pay dividends. You may also want to use the services of our contract specialists in our Quantum CPM team to help you - they offer a contract vetting service which will help identify any onerous terms and conditions and clarify your obligations.

Developing your knowledge of how contracts work can also be extremely beneficial, and this is something Quantum Consult can help you with through our commercial best practice training. This is a full or half-day training session that we deliver at clients' own offices, or elsewhere, designed to provide contractors and sub-contractors with a solid foundation knowledge of contracting.

This provides specialist training, based on our 25+ years' experience, in everything from the common terms and definitions used in contracts and what effective record keeping looks like, to working effectively in the commercial environment, managing individual behaviours and handling change as the contract progresses.

To arrange a training seminar to help you run your business with a more commercial mindset, or if you have any questions on successful contracting in the construction industry, please contact us.