What is commercial management? (Plus job role and skills)

By Indeed Editorial Team

Published 13 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Commercial construction projects require significant cooperation among all stakeholders, including accountants, project managers, designers, labourers and investors. Design and build construction companies are particularly reliant on this cooperation to ensure that they complete the build as scheduled, within budget and that the finished product meets investors' expectations. Appropriate management of the commercial aspect of a construction project is vital, as it ensures that the project is financially viable. In this article, we describe what commercial managers are, answer the question 'What is commercial management?' and highlight the skills necessary to be successful as a commercial manager.

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What is commercial management?

In answer to the question 'What is commercial management?', it involves searching for and developing prospective projects and overseeing all stages of these projects until completion. Commercial policies – the rules and regulations governing a company's internal and external operations – usually govern how to manage commercial operations.

Companies have many policies that cover any type of contract they may enter. Business management happens at the transactional level by monitoring trade connections to ensure they adhere to a company's objectives or rules and to understand and control a contract's financial and risk implications.

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What is commercial management in construction?

The objective of every firm is to maximise efficiency and find market opportunities that could improve its income. This applies to commercial building projects, so construction companies try to ensure the financial viability of a project, make strategic decisions on its development and use data to support these decisions.

The financial management team is vital in commercial construction, as they communicate with architects regarding a design's viability and manage the business's operations. Senior managers monitor site supervisors' costs to ensure cost reductions elsewhere in the project offset any increase in labour or material expenses. The management team helps keep the project running smoothly, ensuring the budget is practical and attainable.

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What is a commercial manager?

Commercial managers supervise the teams that tender for contracts, explore new areas of interest that could be profitable and analyse any growth and development opportunities. Their primary duties include negotiating and finalising contracts, managing the finances of a project to ensure it stays within budget and assessing staff and contractors. These professionals often require excellent financial reporting and risk management skills to succeed in their positions.

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What are a commercial manager's roles?

These roles may include the following:

  • deciding which contracts could bring the greatest profit

  • acquiring licences and permissions

  • calculating resources (time, money, labour and materials)

  • recruiting and managing contractors, employees and suppliers

  • directing and inspecting a project

  • evaluating the development of employees

  • analysing data and creating reports

  • ensuring adherence to legislative, safety and construction regulations

  • maintaining connections with clients and seeking new opportunities

  • identifying and reporting on areas a company could improve

  • bidding for projects and negotiating contracts

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What does a commercial manager do in construction?

These managers analyse a project's variable and fixed expenses. They calculate a project's expenses and predict any income from the completed building, using this information to show investors that the project is viable. This income could come from renting any units in the building or from other activities, such as selling individual units to produce a profit for investors or the building's owner. Commercial managers also enforce a contract's conditions after investors have approved it, ensuring all contractors adhere to what it stipulates.

Managers can apply penalty clauses – legally enforceable sections of a contract – that set completion times and prices for labour or materials, enabling them to know what a project is likely to cost and avoiding overpaying. They also update the owner and project manager on the project's financial status. They might introduce innovative business strategies in these reports showing the owner how they could improve their future revenue from the project. Managers may also help owners analyse the project simply by incorporating the above concepts in financial reports.

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Critical skills for commercial managers

Soft and hard skills are both important to succeed in this role. Below you can find some examples of key skills managers use in their day-to-day job:

Risk management

Any construction project could expose the owner and the construction team to financial or other risks. Commercial managers are responsible for minimising these risks and protecting stakeholders. They are also responsible for ensuring a project remains free from any legal problems.


Successful commercial managers often have strong sales skills, which are helpful when negotiating contracts. Each commercial building project has several agreements with different contractors. Commercial managers negotiate with these contractors, determining which has the best offer and conducting further negotiations. They often have the knowledge and ability to draft a strong contract.

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Financial analysis and planning

These are essential skills for a commercial manager. The commercial management team uses financial forecasting to create a realistic budget for a project. These skills also allow the team to keep their financial operations within budget.

Project management

Although this is primarily the responsibility of project managers, it is also an important skill for commercial managers. Good project management skills can enable commercial managers to create and adjust plans for a project as it progresses. This means they can suggest new ideas or strategies, especially when unexpected costs arise or timelines are short.

Tips for becoming a successful commercial manager

Below are some tips that could help you succeed in the role:

Analyse your strategies

Many commercial managers spend most of their time developing a business. Try to ensure that you spend at least half of your daily time analysing and adjusting your business strategies. Ensure you keep distractions to a minimum, and allocate time to this process to help you utilise your time effectively. Keeping a diary of your work day can be a great way to help you ensure you spend enough time on this important process.

Empower your team

Empowering your management team could help you succeed as a professional commercial manager. Good commercial managers regularly share information with their team and lead by example instead of exercising authority. Transparency may earn you their loyalty and respect, leading to better engagement and furthering the company's mission.

Hold meetings with your team to hear their opinions on a project and what you could do to improve it. Holding frequent performance evaluations, providing information and automating work can improve your team's efficiency. Maintain an open-door policy to help you resolve any problems before they negatively affect the team.

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Stay updated

Successful commercial managers regularly update their industry knowledge, improving their efficiency. Industry-specific information enables them to learn about competitors and how they could create a competitive advantage. Research your industry in detail, and set up a system that notifies you when your sector is in the media. Take note of projections for the economy and current events. To learn what leaders in your field are thinking, follow them on social media and join relevant forums to establish yourself as their peer.

Build your network

Good commercial managers have excellent interpersonal skills, leading to good client relations. They often attend industry events and develop their social media presence, understanding that each individual they engage with is a prospective client or business partner. Build as many networks as possible, strengthen your negotiation skills and remain professional in every situation.

Leverage technology

Many successful commercial managers eagerly adopt new technologies. Deploying new systems can be time-consuming, but good commercial managers know the most recent developments and incorporate them successfully. You could seek IT solutions, new project management, social media and content management tools and read tech and marketing blogs to learn how online solutions could improve output and revenue.

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