Commercial Contract Pricing: How to Price PM, Contractor, and Recurring Work
Commercial contracts generate higher average tickets, predictable revenue, and near-zero marketing costs. This guide covers how to price, structure, and negotiate recurring commercial work.
Use the guidance with your local numbers.
Resource pages explain the planning model, but local disposal rates, labor costs, truck setup, service area, and customer demand still decide the final operating choice.
Executive summary
Price commercial work as a separate line of business with its own cost structure, margin targets, and payment terms. The goal is not to match residential per-job revenue — it's to build predictable baseline revenue with near-zero marketing cost and higher effective margins when customer acquisition cost is factored in.
Numbers to watch
Track commercial and residential as separate P&L lines. Compare gross margin after customer acquisition cost — commercial typically runs 50–65% gross with near-$0 acquisition cost, while residential runs 45–55% gross but costs $100–$150 per new customer. The effective margin difference is what makes commercial pricing work at a 10–20% discount.
Execution channels
Six modules, one focused interface. No add-ons, no upgrade prompts, no per-feature pricing — just the tools that run your business.
Budget scenarios
Six modules, one focused interface. No add-ons, no upgrade prompts, no per-feature pricing — just the tools that run your business.
How the work moves.
A practical sequence for turning this resource into an operating decision.
Pricing Framework Build (Week 1–2)
Complete commercial pricing framework documented on a professional one-page sheet ready for client presentations
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The standard is 10–20% below retail residential rates. This works because your customer acquisition cost for commercial work approaches $0 after the initial sale. When you factor in the $100–$150 you spend acquiring each residential customer, your effective gross margin on commercial work at a 15% discount is often higher than residential at full price. Never exceed 20% off — below that, margins erode to unsustainable levels.
NET-30 is the industry standard for commercial work. Some PMs will push for NET-45 or NET-60 — resist this for new relationships. Offer a 2% discount for NET-15 payment as an incentive for faster payment. Invoice within 24 hours of job completion to start the clock immediately. Build a follow-up sequence: friendly reminder at day 15, direct follow-up at day 25, escalation at day 35. Never let receivables exceed 60 days without direct contact.
At minimum: $1M–$2M general liability (most PMs require this), workers' compensation (required in most states once you have employees), and commercial auto insurance. You'll also need to provide Additional Insured endorsements naming the PM company and/or property address on your GL policy — this costs $25–$50 per endorsement from your insurer. Have all documentation ready before your first outreach. Showing up without insurance docs is an automatic rejection.
Build a 60-day cash reserve before pursuing commercial contracts. At $2,800 per month in commercial revenue on NET-30 terms, you need approximately $5,600 in reserves to float two months of labor and disposal costs before the first payment arrives. Invoice within 24 hours to start the payment clock. Offer 2% NET-15 for early payment. And never extend beyond NET-30 for new relationships — trust must be earned before offering longer terms.
It depends on your total revenue, but the math is straightforward. If your business does $30,000 per month, 25% recurring is $7,500 per month. At an average of $1,500 per commercial client per month (roughly 4 jobs at $375 each), you need 5 active commercial clients. At the PM level, 3 relationships managing 200+ units each can generate $7,500+ per month. Quality relationships matter more than quantity.
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Commercial Revenue Starts with Professional Systems
ScaleYourJunk handles invoicing with NET-30 tracking, CRM with commercial pipeline management, and load-based booking that PMs can use directly.