Pricing Commercial Work

How should you price commerical work, wether it be for restaurants, doctor's offices, hospitals, colleges, etc.?


When I price for large jobs, I price each item individually. As  one man shop I am not a factory. I'm not set up as a factory. I do one piece at a time. If their are some parts of the job that you believe that you can do quicker by doing in quantity, you can certainly consider giving a discount for that part of the job, but you are under not obligation to do so. My thought is that in doing commercial work there is a lot more planning and paperwork involved that would offset any savings in time spent. So I rarely give discounts. I just try to figure a reasonable price for the job. Whether you bid for a home or a dental/doctor's office etc. the principle is the same. You bid a price that you can make a reasonable wage at. For commercial work I would bid higher,  partly because there is usually a little or a lot more red tape and paperwork that you have to do.

Get everything approved in writing BEFORE you do anything

The big thing is to NOT NOT NOT do any work for anybody and for any client until you have the details work out and approved by you and by the client. The surest way to get into big trouble is start to do work for a client before you get the details all written up, approved, and payment arrangements agreed to and signed by both parties. Of course, you can do it any way that you like. But my strong suggestion is to NEVER-NEVER-NEVER put out any money on any job until you receive a deposit which will more than cover all the supply costs (and other costs) of the job. If the job is too big to ask for a full deposit, then break the job up into smaller sections, get the full deposit to cover the costs of the small section of the job. Also, explain to the client that in breaking up the job that the fabrics or vinyls used for the job might at some time be discontinued or unavailable. In this case I'd recommend to them that they purchase all the materials (hopefully through you) for the entire job in advance. If they desire, they can keep the materials at their place, and you only take the materials needed for each section of the job at a time.

Scheduling Your Jobs

If you want to keep your main upholstery business alive, I would suggest that you carefully space any large jobs that might come in. If you, for example, take in a job for a large busines, motel, hospital, etc. that would take you some months to complete, think about the affect that it would have on your retail clients. A large job would be better planned for a slower time of year, such as during the first couple of months of the year. In contrast, if the large job manager wants the job done during your busy season, it might be better to pass on the job, unless they are willing to work with your schedule.

Payment Arrangements

As the owner of a business you have the right to ask or insist on any reasonable payment arrangements that work for you. You are under no responsibility to submit to the requests/demands/requirements of any client. My main rule of thumb is that I have to survive financially. I absolutely won't do work for anyone if they insist on paying me 30/60/90 days out. Each upholsterer has their own way of handling payments. I'm mostly 50% down and the balance on completion no matter who I'm doing the work for. That has been my policy for many years. However, that can vary a little if the client has a proven track record and we have a good relationship. For instance, right now I'm doing a job of 99 cushions for the local college. Because the supervisor really wanted us to do the job, so that she wouldn't have to submit the job to a required bid process (of jobs over a certain value) this job is stretching over 4 years (27 cushions per year, divided into 9 cushions per Invoice). AT the beginning I went to the college measured all the cushions, used their dining hall map to layout which cushions went where. Then I did a cutting layout of all 99 cushions. I also made a QuickBooks Estimate detailing all 99 cushions, which is what I use to bill from each time. On the first year they bought the vinyl for all 99 cushions through one of my suppliers, who gave me a commission for selling the vinyl for them. Also, at the beginning of each fiscal year they purchase the foam for the cushions for that year, which they pay for in advance. We are in the third year of the process. On the first year I made out Work Orders for each 9 cushions. They paid a 1/2 deposit on each invoice and paid the balance on completion, along with the deposit on the next set of 9. The second year and following years, by their request, we have changed the billing process. It works better for them to pay for each thing in full, not in a deposit then pay the balance. They still pay for the foam in full in advance (which as normal I sell at about twice my cost). On the labor/supplies part of the job I don't require a deposit but present them with an invoice/work order for the full amount at the completion of each 9 cushions. They send a payment within about 1 1/2 to 2 weeks, which is workable for me. They have proved themselves reliable in promptly paying the invoices so I was willing to change my billing format to what works better for them.

If a client, business, or organization has a proven track record, or if I have other reasons to trust them, I may change my billing process to accommodate what works for them. However, in no case will I put money out in advance to buy anything for their jobs until I have received a deposit to more than cover the cost of materials, etc.