Business Advisory
Commercial Management for Construction Businesses
Many construction business owners reach a point where the business no longer feels as predictable as it once did. The revenue might be higher than it has ever been, the project pipeline may look healthy and there may be more people working in the business than ever before, yet profitability still seems inconsistent, cash flow remains under pressure and the owner finds themselves spending more time dealing with problems than leading the business.
The natural assumption is often that the business needs more people. A Contract Administrator, Commercial Manager, Procurement Manager or Project Manager gets added to the organisational chart, with the expectation that the additional resource will solve the problem. Sometimes that works. Just as often, the new recruit arrives in a business that has never properly considered how its commercial function should operate, who should be responsible for key decisions, what information management actually needs and how commercial accountability should flow through the organisation.
Construction businesses rarely stay the same for long. As they grow, the way projects are managed, how procurement decisions are made, how information moves through the business and who is responsible for commercial outcomes all become increasingly important. The systems and structures that worked when the owner could personally keep an eye on every project often begin showing cracks once the business reaches a certain size.
That does not mean the business automatically needs a Commercial Manager.
However, the business should take a closer look at its commercial structure, because one of the most common reasons construction businesses struggle to convert growth into profitability is that the commercial side of the business has not kept pace with the growth of the business itself.
How Construction Businesses Should Structure Their Commercial Function
Commercial management in construction means different things depending on who is using the phrase. Project delivery firms use it to describe the oversight of a single commercial building project: scheduling, budgets, site coordination. Recruiters use it as a category heading for Contract Administrator and Commercial Manager roles. Blaze Business & Legal uses it to describe the systems, processes, reporting, procurement, personnel, accountability and decision-making frameworks that influence commercial outcomes across a construction business, and whether those elements are working.
Blaze Business & Legal works with construction business owners and decision-makers who are asking a different set of questions: whether their commercial function is keeping pace with their business, whether their reporting is giving management the information needed to make confident decisions, and whether the structure around procurement, forecasting and commercial accountability is strong enough to support continued growth.
Rachelle Hare spent six years as a full-time Commercial Manager inside Tier 1 and Tier 2 construction contractors, after more than 25 years as a construction lawyer advising businesses at every scale. The perspective she brings is from the inside of the commercial function, not from the outside looking in.
What Blaze Business & Legal Does
Blaze Business & Legal provides strategic Commercial Management advice to construction businesses throughout Brisbane, Queensland and around Australia.
Many of the construction business owners and decision-makers we work with are experiencing similar frustrations. Projects are being delivered, revenue is being generated and the business appears successful from the outside, yet profitability is inconsistent, reporting is not providing the information management needs and key decisions continue finding their way back to the owner.
Some businesses approach us because they are considering recruiting a Commercial Manager. Others believe they need stronger project controls, better reporting, improved procurement processes or more commercial oversight across their projects. In many cases, they are not entirely sure what the underlying issue is, only that the business is not performing as well as it should.
Our role is to work with construction business owners and decision-makers to understand how their commercial function should operate, what commercial capability the business needs and what changes are likely to produce the greatest improvement. Sometimes that leads to the recruitment of a Commercial Manager. Sometimes it leads to a different structure, different responsibilities or improvements to the systems and processes already in place.
Commercial Management is not simply about employing a Commercial Manager. It encompasses the systems, processes, reporting, procurement, personnel, accountability and decision-making frameworks that influence commercial outcomes across the business. When those elements work together effectively, owners and decision-makers gain better information, managers make better decisions and the business is better positioned to protect profitability as it grows.
Why Two Similar Construction Businesses Can Produce Very Different Results
Construction business owners often look at competitors operating in the same market and wonder why their results are so different. The projects may be similar. The clients may be similar. The contract types may be similar. The people delivering the work may have comparable levels of experience. Yet one business consistently produces stronger margins, better cash flow and more predictable outcomes.
The explanation is rarely as simple as having better people or better projects. Businesses that perform consistently well usually have a stronger understanding of what is happening commercially across the organisation. They identify issues earlier, make decisions sooner and maintain greater consistency between project teams. Management receives information that supports decisions rather than simply reporting what happened last month.
Many construction businesses become increasingly dependent on individual people as they grow. A project manager develops their own systems. A contract administrator creates their own reporting processes. Procurement decisions are made differently across different projects. Valuable knowledge sits inside the heads of key personnel rather than being embedded within the business itself.
That approach can work for a surprisingly long time. Eventually, inconsistency starts appearing in project outcomes. Some projects perform well. Others do not. Management struggles to understand why. The business begins relying more heavily on certain individuals and less on consistent commercial systems and processes.
Commercial Management addresses those issues by creating greater consistency across the business. It establishes how information should flow, who is responsible for commercial decisions, how performance should be measured and what management needs to know in order to make informed decisions. The result is a business that is easier to manage because owners and decision-makers are no longer relying on guesswork, assumptions or individual personalities to understand what is happening.
The Questions Construction Business Owners and Decision-Makers Usually Ask When Performance Starts to Plateau
Construction business owners rarely start searching for Commercial Management because they are interested in the discipline itself. The search usually begins because something in the business is not working as well as it should. These are the questions we hear most often.
- Why are some projects producing strong margins while others struggle?
- Why does profitability vary so much between project teams?
- Why does revenue continue increasing while cash flow remains tight?
- Why am I still involved in so many decisions?
- Why do project managers and finance staff seem to have different views about project performance?
- Why do commercial issues continue appearing after they have already affected the project?
- Why does every project seem to operate differently?
Those questions often point towards deeper issues within the business. Reporting may not be providing useful information. Responsibilities may be unclear. Procurement decisions may be inconsistent. Forecasting may not be identifying emerging problems early enough. Managers may be operating independently without sufficient oversight or accountability.
The owner can usually see the symptoms long before they can identify the cause, and that is often the point where construction businesses begin examining their Commercial Management arrangements more closely.
Why the Commercial Structure That Worked at $5 Million Often Stops Working at $20 Million
Many construction businesses grow gradually rather than through a single period of rapid expansion. Additional projects are secured, new staff are employed and responsibilities are delegated over time. Because those changes happen incrementally, it is easy to assume the systems and structures that supported the business at one stage will continue supporting it indefinitely.
At around $5 million turnover, owners typically remain heavily involved in day-to-day commercial decisions. They know what is happening across most projects because they are directly involved in many of those conversations. Reporting tends to be relatively informal and key decisions are often concentrated in a small group of people.
As the business grows, that approach becomes harder to sustain. Project managers begin taking on greater responsibility. Contract administrators become more important. Procurement activity increases. More subcontractors are engaged. More projects are operating simultaneously. Decisions that were previously made by the owner now need to be made by other people.
The challenge is not delegation itself. The challenge is ensuring the business still receives the information, oversight and accountability needed to make informed decisions after those responsibilities have been delegated. Many owners reach a point where they feel less connected to what is happening within the business. They receive more reports than ever before, yet often have less confidence in the information they are receiving. Different projects appear to operate differently and management spends increasing amounts of time trying to understand why.
This is often where stronger Commercial Management becomes important. It provides the structure that sits between project delivery and business performance, ensuring that commercial decisions are made consistently, information is reported appropriately and management has the visibility needed to lead the business effectively as it continues to grow.
Five Commercial Management Failure Patterns in Growing Construction Businesses
Construction businesses at different scales and in different sectors face different commercial challenges. The specifics vary from a civil contractor running multiple regional projects to a commercial builder delivering single large-scale works. The patterns underneath, however, appear with striking consistency across the businesses Blaze Business & Legal works with.
Reporting That Records History Instead of Supporting Decisions
Management receives detailed reports covering last month’s financial performance, procurement updates and project summaries, yet gains little insight into what is likely to happen over the next three months. Forecasting is prepared as a reporting exercise rather than a management tool. Reports vary in format across project teams, making it difficult for management to compare project performance or identify where attention is required before problems become visible in financial results.
Procurement Decisions Varying Across Projects and Teams
As businesses grow, procurement responsibilities evolve organically. Project managers make some decisions. Commercial personnel make others. Certain suppliers are used because they have always been used. Procurement approaches vary significantly between projects, regions and individuals. The financial impact of these variations (small on any single project but significant across 15 or 20 projects over two years) rarely attracts the same attention as a major dispute or a failed project. By the time the cumulative effect is visible in financial performance, the pattern has often been repeating for years.
Different Project Teams Producing Different Outcomes Without a Clear Explanation
One project manager delivers strong results consistently. Another struggles to achieve comparable performance with similar resources and similar work. The immediate assumption is often about the individuals involved. In many cases, the explanation lies in inconsistent contract administration standards, different forecasting approaches, varying levels of commercial discipline, or commercial issues being escalated differently depending on who is managing the project. Without consistent commercial systems, it is difficult to understand what is driving performance differences and what needs to change.
Commercial Issues Identified After They Have Already Affected the Project
The warning signs are generally present well before a project becomes a problem. Margins begin deteriorating, forecasts become less reliable, procurement costs climb, variations remain unresolved and cash flow pressure builds. Businesses with strong commercial management structures identify these issues earlier because responsibilities are clearer, reporting is more effective and accountability is more consistent across the organisation. Earlier identification gives management more time and more options to respond before issues become embedded in project outcomes.
The Owner Cannot Step Back Because Delegation Requires Confidence in Information
Many construction business owners reach a point where they would like to reduce their involvement in project-level decisions and focus on the direction of the business. Delegation only works when management has confidence in the information being received. If project reporting is inconsistent, forecasting is unreliable or commercial issues are being identified too late, owners remain involved, and the reason is rarely the people themselves. The cause is usually that the information arriving on their desk does not give them enough confidence to step back. The issue is commercial visibility, not personnel capability.
From the Building Site – Rachelle Hare
During my time as a Commercial Manager, I regularly encountered businesses that believed they had a profitability problem when they really had an information problem. Management could tell me exactly what happened last month because the reports were excellent at recording history. What they struggled to identify was what was likely to happen next month, where profitability was beginning to deteriorate and which decisions required immediate attention. Once management receives the right information at the right time, many commercial decisions become much easier to make.
Why Growing Construction Businesses Need Stronger Commercial Management Systems, Processes and Leadership
Commercial Management is often misunderstood because many people associate it with a specific role rather than a business function. A Commercial Manager may form part of the solution, but Commercial Management is much broader than a job title. It encompasses the systems, processes, reporting structures, procurement arrangements, responsibilities and leadership mechanisms that influence commercial outcomes throughout the business.
As construction businesses grow, those elements become increasingly important because owners and senior managers can no longer rely on direct involvement to understand what is happening across every project. Information must move through the organisation efficiently. Responsibilities need to be understood. Commercial issues need to be identified early. Procurement decisions need appropriate oversight. Reporting needs to support decision-making rather than simply record historical performance.
Businesses that invest in these areas are often better positioned to manage growth because they are less dependent on individual people and more dependent on consistent commercial processes. The discussion then becomes less about recruitment and more about capability. The focus shifts towards understanding what commercial capability the business needs, where it should sit within the organisation and how it should support project and business performance.
Where Construction Businesses Commonly Lose Profit
When construction business owners start examining profitability, they often focus on the projects that performed poorly. That is understandable, because the impact of a poor project is usually visible and immediate. What is less obvious is that many businesses lose profit through dozens of smaller decisions, processes and commercial practices that occur repeatedly across multiple projects. Those issues rarely attract the same attention as a major dispute, delayed project or problematic subcontractor. Over time, they can have a far greater impact on profitability because they become embedded within the way the business operates. Understanding where those losses commonly occur is one of the first steps towards improving commercial performance.
Procurement
Procurement decisions influence far more than the price paid for labour, materials and subcontractors. They affect programme certainty, quality outcomes, project risk, cash flow and ultimately profitability. Many businesses focus heavily on procurement during tendering and contract award stages, then allow procurement practices to vary significantly between project teams. Different managers develop their own approaches, supplier relationships and purchasing processes. Some projects achieve excellent outcomes while others pay more than necessary or accept additional risk without realising it.
As businesses grow, procurement becomes increasingly important because the financial impact of those decisions is multiplied across a larger number of projects. A procurement process that is slightly inefficient on one project may have a negligible impact. The same issue repeated across twenty projects can become a significant drag on profitability. Commercial Management creates greater consistency, stronger oversight and clearer accountability regarding who is responsible for procurement decisions and how those decisions should be made.
Contract Administration
Many construction businesses underestimate the financial value of strong Contract Administration until problems begin emerging on projects. Contract notices, variations, extensions of time, contractual obligations and project correspondence all have a direct impact on commercial outcomes. When these functions are performed inconsistently, opportunities can be missed, risks can increase and disputes become more likely.
Contract Administration is often viewed as an administrative activity rather than a commercial one. Effective Contract Administration protects contractual entitlements, improves visibility over project risks and supports better commercial decision-making throughout the life of the project. Businesses experiencing inconsistent project outcomes frequently discover that Contract Administration standards vary considerably between project teams, and that inconsistency can create very different commercial outcomes across projects that appear similar on the surface.
Variation Management
Variation Management continues to be one of the most common areas where construction businesses lose money. Most owners understand the importance of identifying and pricing variations. The difficulty usually lies in the systems, processes and accountability surrounding those activities. Variations may be identified late, documentation may be incomplete or project teams may have different approaches to recognising and managing changes in scope. These issues rarely appear significant when viewed individually. The cumulative effect can be substantial, particularly on projects where variations occur regularly throughout the project lifecycle.
Businesses with stronger Commercial Management structures generally establish clearer responsibilities regarding variation identification, pricing, approval and reporting. Management receives greater visibility regarding variation performance and issues are identified earlier, when there is still an opportunity to influence the outcome.
Forecasting
Forecasting is one of the most valuable commercial tools available to construction businesses. Many forecasts are prepared as reporting exercises rather than management tools. They record assumptions, produce numbers and satisfy internal reporting requirements, yet provide limited insight into what is happening within the project or business. Effective forecasting gives management a clear view of where profitability is heading, what risks are emerging and what decisions may be required in the coming weeks and months.
From the Building Site — Rachelle Hare
During her time as a Commercial Manager, Rachelle regularly encountered situations where management reports suggested projects were performing adequately while forecasting indicated emerging problems that had not yet become visible in financial results. Those insights often created opportunities to intervene early and prevent more significant issues from developing.
Project Controls
Project controls encompass many of the systems and processes that give construction businesses the ability to monitor performance, manage risk and maintain visibility over project outcomes. The specific controls vary between businesses and project types. They may include cost tracking, programme monitoring, procurement controls, forecasting processes, reporting requirements and approval frameworks. Regardless of their form, project controls exist to provide management with confidence that projects are operating as expected and that emerging issues will be identified before they become major problems.
Businesses often discover that project controls evolve differently across different teams. One project may have excellent controls and strong commercial discipline, while another relies heavily on the experience and judgement of individuals. Over time, that inconsistency makes it increasingly difficult to understand what is driving project performance and where improvements should be focused.
Commercial Reporting
Commercial reporting should give management a clear picture of what is happening across the business and what decisions require attention. Many reports focus heavily on historical information while providing limited guidance regarding future performance. Management receives detailed explanations of what happened last month but gains little insight into what is likely to happen next month. Strong Commercial Management bridges that gap, with reporting becoming a decision-making tool rather than a record of past performance. Management gains greater visibility over project trends, emerging risks, procurement concerns and forecast outcomes, and is able to address issues before they have a significant impact on profitability.
When businesses improve Commercial Management, they often discover that profitability gains do not come from a single dramatic change. They come from addressing dozens of smaller commercial issues that have been quietly affecting performance across multiple projects for years.
Case Study A – The Business That Did Not Need a Commercial Manager
A Queensland civil contractor turning over approximately $18 million had delivered profitable work consistently for several years. Project margins were beginning to vary significantly between jobs, and the owner believed the business needed a Commercial Manager to bring consistency back to commercial outcomes.
After reviewing the commercial structure, the issue was consistency rather than capability. The business had capable people performing most of the required commercial functions across projects. Responsibilities were unclear, however, and reporting was developed independently by each project team. Forecasting assumptions varied between projects, making it impossible for management to compare project performance or identify trends before they appeared in financial results.
Adding a Commercial Manager into that structure would have added another layer of management without addressing any of the underlying issues.
Case Study B – The Owner Thought the Problem Was Cash Flow
A construction business approached Blaze Business & Legal because the owner was concerned about ongoing cash flow pressure. Revenue was growing, work was plentiful and the project pipeline looked healthy, yet the business constantly felt like it was operating with less financial breathing room than expected.
The initial focus was cash flow. As the review progressed, it became clear that cash flow was a symptom rather than the underlying issue. Forecasting processes varied between projects, procurement decisions were being made inconsistently and management reporting was not providing a clear picture of emerging commercial risks. None of these issues appeared significant in isolation, but together they were affecting project performance across the business.
Senior Commercial Leadership Without a Full-Time Hire
Rachelle Hare brings 25+ years as a construction lawyer and six years as a full-time Commercial Manager inside Tier 1 and Tier 2 contractors, including Acting General Counsel at Thiess and DHA, with CASG and AGS. She provides External Commercial Manager services to construction businesses that need senior commercial expertise on a fractional basis: agreed hours per week or days per month, delivered remotely, without the overhead of a permanent appointment.
For businesses considering whether to recruit a full-time Commercial Manager, an external arrangement is often the right starting point. It delivers the commercial leadership the business needs while preserving flexibility as the organisation continues to grow.
Call Rachelle direct on (07) 3063 3373
- 25+ years as a front-end Construction Lawyer in top-tier law firms
- In-house at Tier 1 and Tier 2 Construction Contractors and Commonwealth clients
- Acting General Counsel at Thiess and DHA, with CASG and AGS
- Six years full-time as a Commercial Manager
- Fractional basis for construction businesses $5M to $100M+
How Construction Businesses Usually Strengthen Their Commercial Function
Once commercial issues have been identified, the next question is usually how the business should respond. This is often the point where discussions about Commercial Managers, Contract Managers and other personnel begin. The answer varies considerably between businesses because the underlying issues vary considerably as well. Some businesses require stronger systems and reporting. Others need clearer accountability, better procurement oversight or more consistent project controls. Some do need additional personnel because the business has outgrown its existing structure.
Commercial Management should be viewed as a business function rather than a single role. That function can be strengthened in many different ways depending on the size, complexity and needs of the business. Recruitment may form part of the solution, but it is only one of many tools available to improve commercial performance. Understanding which tool is most appropriate requires a clear understanding of the problem being solved, the capability already existing within the business and the outcomes management is trying to achieve.
Understanding the Difference Between Contract Administrators, Contract Managers, Commercial Managers and Heads of Commercial
One of the reasons Commercial Management can be confusing for construction business owners is that many of the roles involved appear similar from the outside. The titles sound related, the responsibilities often overlap and different businesses use different terminology for what are sometimes very similar positions. This creates a problem when owners begin recruiting or restructuring their commercial function, because it becomes easy to focus on job titles rather than understanding what responsibilities need to be performed within the business.
A Contract Administrator is typically focused on the administration of the contract itself. Depending on the business and project, that may include notices, correspondence, extensions of time, variations, subcontract administration, document control and supporting project teams with contractual requirements. Strong Contract Administrators play an important role in protecting contractual entitlements and maintaining project records, particularly on larger or more complex projects.
A Contract Manager generally operates at a higher level and takes greater responsibility for contractual strategy, risk management and commercial outcomes arising from the contract. Contract Managers are often heavily involved in managing client relationships, resolving contractual issues, overseeing claims and ensuring contractual obligations are being met throughout the project lifecycle.
A Commercial Manager’s responsibilities are typically broader again. While contracts remain important, the focus expands to include forecasting, procurement, commercial reporting, project performance, margin management, risk identification and supporting management decision-making. Commercial Managers often sit between project delivery and business leadership, giving management a clear picture of how projects are performing commercially and where attention may be required.
A Head of Commercial usually has responsibility for commercial performance across the business rather than within a single project. The role often includes oversight of Commercial Managers, Contract Managers and Contract Administrators, together with responsibility for commercial systems, reporting, procurement strategy, governance and consistency across multiple projects.
The boundaries between these roles are not always clear. Different businesses structure them differently and the responsibilities can vary significantly depending on size, project type and organisational maturity. That is one of the reasons Blaze Business & Legal focuses on understanding what capability the business needs before discussing specific job titles. For a more detailed comparison of these roles, see our guide on Commercial Manager vs Contract Manager vs Contract Administrator.
Link: /commercial-management/commercial-manager-vs-contract-manager-vs-contract-administrator/
Should Commercial Managers Be Assigned to Projects or the Business?
One of the most common questions construction business owners ask is whether Commercial Managers should be embedded within individual projects or operate across the business as a whole. There is no universal answer because the most appropriate structure depends on the size of the business, the type of projects being delivered and the commercial challenges the business is experiencing.
Many contractors begin by assigning Commercial Managers directly to projects. This can work well where projects are large, commercially complex or require significant day-to-day commercial oversight. The Commercial Manager develops a detailed understanding of the project, works closely with the project team and remains actively involved in commercial decision-making throughout the project lifecycle.
The challenge with this model is consistency. As businesses grow, multiple Commercial Managers may begin operating independently across different projects. Reporting evolves differently. Forecasting methodologies vary. Procurement approaches diverge. Commercial decisions are made using different assumptions and management receives information that is difficult to compare across projects.
Some businesses respond by moving Commercial Management responsibilities into a central business function. Commercial Managers continue supporting projects, but they operate within a common framework, use consistent reporting methodologies and receive direction from a senior commercial leader.
A hybrid approach is also common. Commercial Managers support individual projects while a Head of Commercial or Commercial Director provides oversight across the broader business. This allows project teams to receive dedicated commercial support while maintaining consistency across reporting, forecasting, procurement and commercial decision-making.
The most appropriate structure depends on what the business is trying to achieve. Businesses experiencing inconsistent project outcomes often benefit from stronger commercial oversight across multiple projects. Businesses delivering highly complex projects may require dedicated project-level commercial resources. Understanding the difference is important because it influences recruitment decisions, reporting structures and long-term organisational design.
See also: Should Commercial Managers Report to Project Managers? /commercial-management/should-commercial-managers-report-to-project-managers/Case Study C
Commercial Managers Were Operating Independently Across Projects
A contractor delivering approximately $40 million of work each year had embedded Commercial Managers within several major projects. Each Commercial Manager was capable, experienced and well regarded by their project teams. Despite this, management struggled to compare project performance and lacked confidence in the consistency of commercial reporting across the business.
A review identified that each Commercial Manager had developed slightly different forecasting methodologies, reporting formats and commercial processes. Management was receiving information in different formats and making decisions using inconsistent data.
Do You Really Need a Commercial Manager?
Many construction business owners arrive at this question because they are considering recruiting a Commercial Manager. That may ultimately be the right decision, and it may also be the wrong starting point. The better question is whether the business has the commercial capability it needs to support profitable growth.
Commercial capability can come from people, systems, processes, reporting structures, accountability frameworks and leadership. A Commercial Manager may strengthen that capability, but they are only one possible solution. For example, a business experiencing inconsistent project outcomes may need stronger project controls rather than another manager. A business struggling with procurement may need clearer procurement ownership and better procurement processes. A contractor heavily dependent on the owner may need better reporting and accountability before introducing additional personnel.
Other businesses do need additional commercial resources because the workload, complexity or risk profile has outgrown the existing structure. At that point, a Commercial Manager, Contract Manager, Head of Commercial or other commercial specialist may provide significant value. The challenge is determining which applies to your business. Recruiting a Commercial Manager when the underlying issue relates to reporting, accountability or procurement often leads to disappointment because the role is expected to solve problems it was never designed to solve. On the other hand, businesses that delay strengthening their commercial function can find themselves placing increasing pressure on owners, project teams and management as complexity continues to grow.
Commercial Management should therefore be viewed as a business capability rather than a position description. Once the capability requirements are understood, it becomes much easier to determine what resources are needed to support them.
Should You Employ, Engage or Outsource Commercial Management?
Businesses that decide additional commercial capability is required generally have three broad options available to them.
The first is to recruit a full-time Commercial Manager. This can work well where the business has sufficient workload, complexity and commercial activity to justify a dedicated resource. A full-time Commercial Manager becomes part of the leadership team, develops a detailed understanding of the business and can provide ongoing support to project teams and management.
The second option is to engage a part-time commercial resource. This approach is often used by growing businesses that require additional capability but are not yet ready for a full-time appointment. It can provide access to experience and support while maintaining greater flexibility.
The third option is to engage an External or Fractional Commercial Manager. This model is becoming increasingly common amongst construction businesses that require senior commercial expertise but do not need a permanent full-time role. The most appropriate solution depends on the size of the business, the challenges being faced and the outcomes management is trying to achieve. Cost is obviously relevant, but it should not be the only consideration. A poorly structured full-time role can become an expensive overhead, while a well-designed external arrangement can deliver significant value. Equally, some businesses reach a point where dedicated internal commercial leadership becomes essential.
Understanding where your business sits requires more than a recruitment discussion. It requires a broader examination of how the commercial function currently operates and where improvements are likely to have the greatest impact.
See also: Full-Time vs Fractional Commercial Manager /commercial-management/full-time-vs-fractional-commercial-manager/
Most Construction Businesses Start by Recruiting. We Start by Asking Different Questions.
When commercial issues begin affecting performance, many businesses move quickly towards recruitment. The conversation often starts with questions such as whether to recruit a Commercial Manager, whether another Contract Administrator is needed, or whether a Procurement Manager should be engaged. Those questions are understandable, but they assume the solution before the problem has been fully understood.
At Blaze Business & Legal, we generally start somewhere else.
- What commercial issues is the business experiencing?
- Where is profitability being lost?
- What information is management receiving?
- What information is missing?
- How are commercial decisions currently being made?
- Who is accountable for procurement, forecasting, reporting and commercial performance?
- How does the owner receive visibility over what is happening across projects?
- What capability already exists within the business?
The answers to those questions often reveal opportunities that would never emerge from a recruitment discussion alone. Sometimes the conclusion is that the business needs a Commercial Manager. Sometimes it needs stronger reporting, clearer accountability or better procurement oversight. Sometimes it needs a Head of Commercial rather than another project-based resource. Sometimes it needs a completely different structure. By understanding the problem first, construction business owners and decision-makers are far more likely to invest in solutions that produce meaningful improvements rather than simply increasing headcount.
Commercial Management Strategic Review
The Commercial Management Strategic Review is designed for construction business owners and decision-makers who know the business could be performing better but are not entirely sure why.
Some clients approach us because they are considering recruiting a Commercial Manager. Others are experiencing inconsistent project outcomes, concerns about reporting, procurement challenges or difficulties stepping back from day-to-day decision-making. Many simply want an independent assessment of whether their current commercial structure remains appropriate for the size and complexity of the business. The review examines the way Commercial Management currently operates within the organisation and assesses whether the structure, systems, processes and personnel are supporting the business effectively.
Who the Review Is Designed For
The review is typically appropriate for construction businesses that are growing and becoming more complex, experiencing inconsistent project outcomes, have concerns regarding reporting or forecasting, are considering recruiting commercial personnel, want greater visibility across projects, are reviewing their organisational structure, or want independent advice regarding their commercial function.
What the Review Covers
The scope of each review varies depending on the business and the issues being examined. Areas commonly reviewed include the current commercial structure, project delivery arrangements, commercial responsibilities, reporting and forecasting processes, procurement responsibilities and controls, accountability frameworks, existing commercial resources, information flows throughout the business, and commercial risks and capability gaps.
What You Receive
At the conclusion of the review, Blaze Business & Legal provides a Commercial Management Strategic Review Report. Depending on the scope of the engagement, the report may include key findings and observations, assessment of the current commercial structure, analysis of commercial responsibilities, review of reporting and forecasting practices, procurement observations, identification of commercial risks and capability gaps, recommendations regarding personnel, systems and structures, a suggested future-state commercial structure, and prioritised recommendations and next steps.
Investment
Commercial Management Strategic Reviews start from $4,500 plus GST. Following an initial Strategy Session, Blaze Business & Legal will provide a fixed-price proposal tailored to the size of the business, the issues being reviewed and the scope of work required.
Case Study D
The Owner Couldn’t Step Back Because the Reporting Wasn’t Working
A contractor generating approximately $25 million in annual revenue approached Blaze Business & Legal because the owner wanted to reduce their involvement in day-to-day project decisions. The business had experienced project managers, capable commercial personnel and a strong pipeline of work, yet the owner remained heavily involved in matters that should have been handled elsewhere within the organisation.
Management initially assumed additional personnel were required. The review revealed a different issue. Reporting was extensive but inconsistent. Different projects used different methodologies. Forecasting assumptions varied. Information often reached management after decisions had already been made. The owner remained involved because they lacked confidence in the information being received rather than confidence in the people themselves.
“We were convinced we needed to recruit a Head of Commercial. Rachelle’s review showed us we had the capability already in the business. We just needed to structure it properly. We saved a significant salary cost and the commercial function is performing better than it ever has.”
Marcus T, Managing Director, Civil Construction Company, Queensland
Recruiters Often Ask the Wrong Question
Recruiters perform an important role within the construction industry. Once a business understands what capability it requires, a recruiter can identify suitable candidates and support the recruitment process. The difficulty arises when businesses begin recruiting before they understand what capability they need. A recruiter may be asked to find a Commercial Manager when the business really needs stronger procurement oversight. A Contract Manager may be recruited when the underlying issue relates to reporting and accountability. A Head of Commercial may be engaged before the business has addressed the systems and processes that are limiting performance.
These outcomes are not the fault of the recruiter. They occur because the business has not yet determined what problem it is trying to solve. Blaze Business & Legal works with construction business owners and decision-makers before recruitment begins. By understanding the commercial structure, responsibilities and capability requirements of the business, management can approach recruitment with far greater confidence and clarity.
Related Services
Commercial Management rarely operates in isolation. It intersects with many other aspects of construction business performance, including Business Advisory, Construction Business Improvement, Contract Management, Governance, Risk Management and Procurement. Construction businesses reviewing their commercial function often benefit from considering these areas together because improvements in one area frequently influence outcomes in another.
Commercial Management: Detailed Guides
The following pages address specific commercial management questions in full. Each one leads to the Commercial Management Strategic Review as the natural next step for construction business owners and decision-makers who want independent advice on their specific commercial structure.
Commercial Manager vs Contract Manager vs Contract Administrator
The titles overlap and different businesses use different terminology for what are sometimes very similar roles. Understanding the distinction is essential before recruiting or restructuring.
Read the comparison →Should Commercial Managers Report to Project Managers?
The reporting line shapes what information reaches management and how consistently commercial decisions are made across projects. The answer depends on the size and complexity of the business.
Read the analysis →Full-Time vs Fractional Commercial Manager
The decision is not only about cost. The right model depends on whether the business has enough commercial activity, complexity and internal structure to justify a full-time appointment.
Compare the models →Do Construction Businesses Need a Head of Commercial?
The role typically becomes valuable when multiple Commercial Managers, Contract Managers or commercial teams require coordination and consistent oversight across a growing portfolio.
Read the guide →How Procurement Affects Construction Business Profitability
Procurement decisions influence margins, cash flow and project risk across your entire portfolio. The cumulative effect of small procurement inefficiencies repeated across 20 projects is significant.
Read the analysis →How Project Reporting Can Let Down Construction Business Owners
The problem is rarely the quantity of reporting. Most construction businesses produce extensive reports. The problem is that reporting records what happened rather than giving management room to act before issues become embedded in project outcomes.
Read the guide →Recommended Commercial Structures for Construction Businesses
The commercial structure appropriate at $8 million differs significantly from the structure required at $30 million, $60 million and $100 million+. Guidance on what each stage should look like.
View the recommendations →How to Tell When Your Business Has Outgrown Its Commercial Systems
The transition happens gradually. The warning signs (inconsistent margins, unreliable forecasting, procurement decisions you do not know about) appear before the problems become serious.
Read the diagnostic →Does My Construction Business Need a Commercial Manager?
The better question is whether your business has the commercial capability it needs. A Commercial Manager is one way to provide that capability, and sometimes not the right starting point.
Read the guide →Commercial Management at Project Level
These pages address how commercial management should work within individual projects: the responsibilities, the reporting, and how project-level commercial performance shapes business outcomes.
Commercial Management in a Construction Project
Commercial management at project level and at business level are related but different disciplines. Understanding the difference shapes how responsibilities, reporting and oversight should be structured.
Read the guide →What a Commercial Manager Does on a Construction Project
The Commercial Manager’s role covers forecasting, procurement oversight, variations, contract administration oversight and commercial risk. It is a commercial support role, not a delivery management role.
Read the guide →Not Sure Whether Your Current Commercial Structure Is Still Appropriate?
Many construction business owners and decision-makers can see the symptoms. Projects may be producing inconsistent results. Reporting may not be providing the information management needs. Procurement decisions may be affecting profitability. Owners may still be carrying more responsibility than they should. Determining why those issues are occurring is often much more difficult than recognising that they exist.
The Commercial Management Strategic Review provides independent advice regarding your commercial structure, reporting, procurement arrangements, personnel and commercial capability so you can make informed decisions about what changes are likely to deliver the greatest benefit. Book a Strategy Session using the button below.
FAQs about Commercial Management for Construction Businesses
Common questions from construction business owners and decision-makers reviewing their commercial function.
Commercial Management in a construction business involves the systems, processes, reporting, procurement, forecasting, accountability and personnel responsible for commercial performance. It sits between project delivery and business performance, giving management a clear view of how projects are performing, where risks are emerging and what decisions may be required to protect profitability and cash flow.
A Commercial Manager typically oversees the commercial performance of projects and supports management decision-making. Depending on the business, responsibilities may include forecasting, procurement oversight, commercial reporting, margin management, risk identification, contract administration oversight and supporting project teams with commercial issues. The exact role varies significantly between construction businesses, which is why understanding the business’s needs is often more important than focusing on the job title.
A Commercial Manager generally has broader responsibilities extending beyond the contract itself. While contracts remain important, Commercial Managers often focus on forecasting, procurement, reporting, commercial performance and supporting business decisions. Contract Managers tend to focus more heavily on contractual strategy, contract administration, claims, client obligations and contractual risk throughout the project lifecycle.
A Contract Administrator is usually focused on the day-to-day administration of the contract, including notices, correspondence, extensions of time, variations, subcontract administration and contractual record keeping. A Commercial Manager generally operates at a more strategic level and is concerned with broader commercial outcomes, project profitability, forecasting, procurement and commercial performance across the project or business.
Whether Commercial Managers should report to Project Managers depends on the structure, size and objectives of the business. Some contractors successfully embed Commercial Managers within project teams, while others prefer a centralised commercial structure with independent reporting lines. The most appropriate arrangement depends on the level of oversight required, the number of projects being delivered and the consistency management wants across the business.
Most projects do not require a dedicated Commercial Manager. Smaller projects may be adequately supported by Contract Administrators, Contract Managers, Project Managers or centralised commercial resources. Larger or more complex projects often justify dedicated commercial support. The key question is whether the business has the commercial capability required to support project performance and management decision-making.
A construction business may benefit from a Head of Commercial when it reaches a size or level of complexity where multiple projects, Commercial Managers, Contract Managers or commercial teams require coordination and oversight. The role often becomes valuable when management needs greater consistency across procurement, forecasting, reporting, commercial processes and decision-making.
A Commercial Management Strategic Review examines how the commercial function currently operates within the business and whether it remains appropriate for the size and complexity of the organisation. Reviews commonly assess reporting, forecasting, procurement, accountability, commercial responsibilities, project delivery arrangements, organisational structure and existing commercial resources. Blaze Business & Legal then provides a written report containing findings, observations and recommendations for improvement.
Many clients engage Blaze Business & Legal before recruiting a Commercial Manager because they want independent advice regarding what capability the business needs. In some cases, the review supports the recruitment of a Commercial Manager. In others, it identifies opportunities to improve reporting, accountability, procurement, organisational structure or existing personnel arrangements before additional recruitment occurs.
Blaze Business & Legal provides External Commercial Manager services for construction businesses that require senior commercial support but do not need a full-time internal appointment. Depending on the business and its objectives, External Commercial Management may provide access to experienced commercial leadership, strategic advice and commercial oversight while maintaining flexibility and controlling overheads.
Commercial Management issues often present themselves indirectly. Construction business owners and decision-makers may notice inconsistent profitability, unreliable forecasting, cash flow pressure, procurement concerns, varying project outcomes, reporting that does not support decision-making or an inability to step back from day-to-day issues. These symptoms warrant a closer review of how the commercial function is operating, whether or not a formal Commercial Management problem can be confirmed at that stage.
Commercial Management becomes increasingly important as construction businesses grow, take on more projects and delegate greater responsibility to managers and project teams. While larger businesses often have dedicated commercial personnel, smaller and mid-sized contractors can also benefit from stronger commercial structures, reporting systems and accountability frameworks. The focus should be on the complexity of the business and the challenges being experienced rather than turnover alone.
The first step is usually gaining an objective understanding of how the commercial function currently operates and where opportunities for improvement may exist. A Commercial Management Strategic Review can identify whether the business requires changes to personnel, reporting, procurement, accountability, organisational structure or broader Commercial Management arrangements before significant decisions are made regarding recruitment or restructuring.
