Residential work is for householders. Commercial work is for businesses, property managers and general contractors. They behave differently in four ways.
Payment timing
Residential customers commonly pay at completion. Commercial customers pay on terms, frequently thirty days or longer, and sometimes only after their own customer has paid them.
That gap has to be funded — see working capital and days to get paid. A business moving into commercial work at the same volume needs materially more cash than it did.
How work is won
Residential turns on reputation, response and reviews. Commercial turns on relationships, bidding, and meeting requirements: insurance limits, licensing, bonding, safety documentation.
The sales cycle is longer and the work arrives in larger pieces.
Concentration
A residential business with two hundred customers loses one and barely notices. A commercial business with six can lose a quarter of its revenue in a phone call — see customer concentration.
The paperwork
Commercial work generally means the customer's contract rather than the business's own, with terms on retainage, change orders, insurance, indemnity and dispute resolution that were written for the customer's benefit — see customer contracts and retainage.
Lien rights matter more here, because the amounts are larger and the payment chain has more links in it.
Consumer protection cuts the other way
Residential work carries obligations commercial work does not: cancellation periods, deposit limits, and required disclosures on home improvement contracts.
Running both
Common and workable, provided the differences are recognised in pricing and in cash planning. The failure mode is running commercial work on residential assumptions and finding the business short of cash while profitable on paper.