Commercial management for construction businesses

The Institute of Commercial Management (ICM) defines commercial management as: 'The identification and development of business opportunities and the profitable management of projects and contracts, from inception to completion.'

In construction, commercial management generally refers to the overseeing and management of a project's finances as it progresses. It can also refer to the long-term management of business opportunities that will enable the organisation to develop and grow.

The commercial manager must maximise business potential in terms of growth and profitability, while monitoring and controlling internal processes as well as managing external relationships with subcontractors, clients, and so on.

Due to the complexity of valuing and costing construction projects, commercial management has developed into a technical discipline, most commonly undertaken by quantity surveyors. Often quantity surveyors progress to become commercial managers, with responsibility for a commercial team and reporting to the project manager.

A successful construction project is one that is delivered on time, to budget and at the required quality. Commercial managers balance these drivers with longer-term strategy of the business and the client's own commercial drivers. If a project achieves, or exceeds, the anticipated return for the business, with the client relationship maintained or improved, then the commercial management strategy will be seen to have been a success.

In its widest sense, commercial management can be considered to cover:

• Accounting.
• Assessment of financial viability.
• Budget planning, monitoring, and forecasting.
• Estimating, tendering and procurement.
• Cash flow forecasting.
• Contract administration, valuation, variations, disputes, claims and negotiation.
• Risk management and value management.
• Supply chain management.
• Business development and planning.

[edit] Related articles on Designed Buildings Wiki

• Accounting.
• Budget.
• Business plan.
• Capital costs.
• Commercial manager.
• Commercial management and quantity surveying course essentials.
• Construction buyer.
• Consultant team for design and construction.
• Cost consultant.
• Cost engineering.
• Hiring an architect as a commercial client.
• Interview with Liam Huntley - Commercial Manager.
• Letter of credit.
• Managing the procurement process.
• Organisation.
• Payment.
• Project manager.
• Quantity surveyor.
• Turnover.
• Valuation of interim payments.
• Whole-life costs.