Chapter Twelve

Commercial, Industrial, and Government Business Markets

By Beth Borrego / Published May 2021

It goes without saying that commercial, industrial, and government business represents a substantial market for the service industry across all markets. Tapping into these markets means calling on commercial businesses and government agencies rather than homeowners, so the approach is entirely different. 

     Let’s start by looking at property managers. Property management companies often handle multiple large properties and neighborhoods in a geographic area. The property manager is assigned by the company he or she works for to specific communities, working with the board of directors for each homeowners association to guide them through the process of acquiring services for their communities by way of annual contract, project, or incidental purchase. It would be the property manager’s responsibility, for example, to request and gather bids for landscaping and snow plowing every one or two years. Property managers may also procure services from pressure washing companies, painters, asphalt companies, window cleaners, gutter cleaning companies, trash hauling companies, roofing and siding companies, commercial lighting companies, and the list goes on. 

     There are several ways to introduce your company to property managers and the companies they work for. In the past many companies called into the offices to see if they could reach the property managers that way. Since COVID-19 many offices are sparsely staffed or closed, open only to staff, and many staff are working from home and using Zoom. If you do decide to make telephone calls, be prepared before you begin by knowing what you plan to say, and keep it brief. It is helpful if you have the names of the property managers, but if you don’t, it’s not impossible to get that information. You’ll want to keep your message short and concise. You’ll first reach the receptionist, often referred to as “the gatekeeper,” who is someone to befriend. Be polite and respectful of her time. In a sentence or two, let her know what you do and ask if it’s something that any of the property managers ever needs or currently may need. Tell her that you understand that the property manager you may need is extremely busy, and ask if you can leave a voice mail so that you don’t interrupt them. All of these small steps help to get you in the door and eventually on the phone or in front of the right person. If you can get an email address or a fax number, that’s a plus. Follow up any conversation with your next step, by sending the receptionist (whose name you should also have) a thank you note with your business card. How often do you think that happens? Not very often. Once you have had a positive experience by phone, try setting up a face-to-face or Zoom meeting to introduce yourself briefly and to say hello. It’s a great opportunity to meet others in the office and to drop off a few business cards or a brochure. You might also bring the receptionist a small bag of wrapped candies to put in the candy dish that is so often found sitting on the reception counter, or perhaps give her a bag of microwave popcorn with your business card stapled to the wrapper. If the office is not open to the public, then you can mail it, or perhaps send a gift card. Always keep your gatekeeper happy. She can connect you to the people who spend money or shut you out in a heartbeat. 

     Once you have reached a property manager and have begun to develop a relationship, you’ll want to meet the rest of the property managers in the office. Ask if you can have a five-minute slot at the next office meeting, either in person or via Zoom, if you promise not to take too much time. All you want is an introduction and to exchange cards with everyone else on the team. If it is a morning meeting, bring muffins or donuts and a container of juice if the meeting is in person. Make your introductions, tell them very briefly what it is you do, and then keep your promise and leave. Property managers are extremely busy people, managing multiple properties, with each community consisting of hundreds of people living in them and calling on any given day with questions or concerns. Add to that any current projects with vendors that are taking up their time with concerns and requests. They’ll appreciate you more if you don’t try to occupy too much of their time and if you provide them with exactly what they asked you for, fast, when they asked for it, the first time around. If you make them look good, you’re valuable to them.

     Look for networking opportunities in your target market area. For example, BOMA, the Building Owners and Managers Association, is a very large and influential group that has a presence in most metropolitan areas. Other connections include the Building Industry Association, the NAIOP Commercial Real Estate Development Association, the National Property Management Association, and the list goes on. Some of these associations also have resources you may wish to advertise in; for example, BOMA has a buyer’s guide. Listing your company in this guide puts your business at the fingertips of many property managers.

     It’s clear that it makes good business sense to contact the property management companies in your area to see what your company needs to do to get onto the bidder’s list. Many service companies work almost exclusively for property management companies. One thing to remember is that these companies typically pay net 30 or a little longer. This becomes important when predicting cash flow, since it may impact your business if you don’t have a surplus of working capital. 

     There are also commercial accounts that are dealt with at a corporate level, which means that you will need a salesperson who understands your business calling on prospects to introduce them to your company in order to determine if there might be a compelling reason to do business together. Businesses such as large restaurant chains, fleets of cars and trucks, commercial facilities with flatwork and parking garages, and graffiti removal are just a few of the examples of commercial pressure washing work. 

     If you are interested in performing restaurant work, for example, then consider joining a local restaurant association to get a member’s list to market to. There are also restaurant trade shows you might consider participating in. As you grow your business, consider buying out smaller competitors. Be sure to thoroughly research any company you consider acquiring. While acquisitions can be profitable and result in new business right away, you’ll want to avoid buying accounts that are too low in price.

     Commercial builders also go out to bid for the various portions of their scope of work and typically request bids so that they can quote on projects, such as constructing shopping centers, multi-story commercial buildings, and housing developments. Specialized industrial applications also exist and can be very lucrative as well. Special niche services such as washing water towers, railroad cars, and ship hulls are just a small fraction of the work that is out there. 

For any opportunity you bid, you should be prepared to address certain points within your proposal:

• Scope of work
• Operational plan
• Frequency of service
• Timing of work (evenings, weekends, holidays, etc.)
• Payment terms
• Pricing for the services you are quoting

     Be sure to also include a copy of your general liability insurance and worker’s compensation coverage. A list of references for your prospect to contact is also a good idea. Paper and electronic copies of the quote make for an attractive presentation, and a PDF is a file type that anyone can open easily with a PDF reader such as Adobe. Electronic documents may be passed to other team members or decision makers for review prior to any internal meetings regarding the bids they have received. Anything you can do to en-hance your professionalism and your presentation can be highly beneficial. 

     Before bidding on a contract, make sure you address and answer some basic questions about the proposed work. These questions will aid you during preparation of the bid and will allow you to more accurately calculate a price that is fair for you and considers your business’s financial variables. 

• How difficult will the project be, and why or why not?
• Will I need special chemicals?
• Will I need tools I don’t have, and will I rent them or procure them? What are these costs?
• Are there time constraints that make this more difficult, and what are they?
• Is water available on site, and if not, what is the solution and its cost?
• Will protection from chemicals or other work exposure be necessary?
• Is water reclamation needed?
• Is noise a factor, and are ordinances in effect due to surrounding residential areas?
• What is the likelihood of additional business based upon a successful outcome of this project?

     Various government agencies are also lucrative prospects. City, county, state, and federal governments all go out to bid on numerous kinds of blue collar, contractor trade jobs. Many of these opportunities can be viewed online. The Small Business Administration believes that small businesses are the backbone of American commerce. The federal government is mandated to provide programs especially for small businesses, which are coordinated and overseen by the Office of Small Business Utilization, or OSBU. Some of these outreach opportunities include training, counseling, small business set asides, and sub-contracting opportunities, to name a few.

     The Federal Acquisitions Stream-lining Act of 1994 was designed to simplify government buying procedures. The most noteworthy portions of it outline the monetary thresholds and guidelines for each one. The government defines micro-purchases as government purchases up to $2,500 in individual items or multiple items whose aggregate total does not exceed $2,500. These purchases are no longer set aside for small businesses, and it is also worth noting that many of these transactions are made with a government credit card. Purchases ranging in price from $2,500 to $100,000 are set aside for small business, unless the procurement officer cannot successfully get two quotes that are competitive for the goods or services they wish to procure. 

     It’s important to know the terminology used by various government agencies. An RFQ is a request for quotation and is issued when the government is gathering prices for planning purposes but may not be spending immediately. An RFP is a request for proposal and is used when the government formally goes out to bid. The government must formally and publicly post an RFP and solicit proposals based upon the guidelines specified within the individual RFP. This is typically done when the project total is more than $25,000. They may also be issued when price is not the only factor and other criteria must be considered in the purchase decision. 

     Government sales can be lucrative as a revenue stream for small businesses, and many small businesses sell residential, commercial, and government work. Some of the local entities you may wish to look into as bid sources are states, local districts, cities, municipalities, counties, townships, universities, school districts, hospitals, police and fire departments, correctional facilities, and public utilities. These local government bids are a wonderful place for small business, small minority-owned, small women-owned, or small disadvantaged businesses to begin government work.

     As we have seen, if residential work is not what you wish to focus on, or if you simply wish to sell your existing services to additional markets in order to grow your business, then commercial, industrial, or government business might be a great fit for your company.