Engineering Business Marketing 1

[bigTomHanks]

I'm in the planning stages of starting a consulting business to provide companies with technical guidance on improving their processes. I plan to create a report with recommendations on how to improve their business and then sell machine design and project engineering services to them based on my recommendations. I have a BS in Mechanical Engineering without a PE license so I know I can't offer "engineering" services but don't want to limit myself to "Mechanical Designer" work either. What would be the best way to market myself in this situation? Also what kind of insurance do I need to carry when doing this type of work and where does one purchase it from?

 

[MacGyverS2000]

and then sell machine design and project engineering services... without a PE license so I know I can't offer "engineering" services

Aren't these at odds with each other, marketing (et. al.) being irrelevant?

Dan - Owner

http://www.Hi-TecDesigns.com

 

[bigTomHanks]

Yeah I see your point. Basically I want to design and build machines/equipment and perform modifications to existing ones as a business. I have some ideas for products around some hobbies of mine but feel that it would be best to use my experience at process improvement/root cause analysis to work with companies to solve their problems which should open the door to building some machinery/equipment for them. Ideally I hope to find a niche with enough demand to build a traditional machine/fabrication business around. I'm not sure what the limitations of what I can do without a license are but when I think license I think primarily of building construction. Am I wrong to think that I could provide "process improvement" report generations services to a company without a PE license?

 

[GregLocock]

I thought a PE license wa sto do with services tot he public rather than to other companies?

Cheers

Greg Locock


New here? Try reading these, they might help FAQ731-376

http://eng-tips.com/market.cfm?

 

[CELinOttawa]

The requirement to be licensed varies by jurisdiction, but most require you to have your professional license to apply specialist engineering knowledge in your work. There are frequently exceptions for people hired as employees to provide services to their own employer and who's products will be tested, etc. Think automotive and aerospace industries.

Check the laws in your jurisdiction, and maybe even apply for your PE. If your local jurisdiction will permit what you are doing, you won't be as mobile in your consulting as you would be with the P.Eng. Nearly every jurisdiction grants temporary licenses for out of jurisdiction P.Engs who are consulting within their jurisdiction.

 

[tygerdawg]

IMHO your chosen field of machine design / process improvement is not the same as bridge building or structural engineering involving "Public Safety". So it can be argued....etc. The fact of the matter is that there are thousands of companies and free lancers trying to do exactly what you want to do. Part of my repertoire of "Engineering Services" include your topics. I have a PE, but I have spent my career in Manufacturing Engineering and have never stamped a drawing. Nor had the need to, ever. So my official status is "Inactive". I keep the PE to show potential clients that I passed a competency test once upon a time. That sets me apart from the herd of those who didn't. But most folks in manufacturing don't have / don't know / don't appreciate a PE so it doesn't matter much.

The issue of insurance is arguable for this endeavor and depends on what type of work you do and your level of tolerable risk to your business. Besides a Liability Insurance policy (for when you knock over a ladder while touring a facility), the insurance you seek is "E&O" or "Errors & Omissions" insurance (for when you royally screw up). Many sources for this, many prices, search the forums for many discussions. I had a policy quoted years ago from my broker who provided my Liability policy. I chose not to get it because I was freelancing doing small machine design projects that I felt did not fall into the "Public Safety" aspect. I also aggressively managed my own risk by telling potential customers "No, thanks" to risky projects. The typical dollar value was low. But grow the business large and your project dollar value is large, it makes sense to acquire E&O.

Advice about your marketing. What worked (the 2nd, or 3rd time I "started") was to start small and build a loyal clientele who can provide referrals. Else you will be like any of a hundred other jokers out there telling potential clients that they can work miracles and solve all problems...if they'd only give you the purchase order. The response is usually Yeah, right . But if your potential client was referred by a happy customer...that's a whole 'nother thing.

Then the whole market: machine designers & system integration is a tough business. My experience is that those companies have a half-life of about 18 months. Until you are large enough to have sufficient cash flow cushion, it is very harsh & risky (IMHO). One misstep, and blooey. If possible, seek a niche and do superlative work at it.

TygerDawg
Blue Technik LLC
Virtuoso Robotics Engineering

http://www.bluetechnik.com

 

[zdas04]

I have a bunch of insurance, but I only have it because the companies I do work for require it (and, no, their requiring it does not create an obligation on their part to pay for it). If you find work, the client will most likely have a Master Service Agreement that you have to sign. It will have an insurance clause. You have to decide if purchasing the amount of insurance that that contract required is good economics or not. Sometimes the limits are negotiable, the existence of the insurance is never negotiable (one company wanted $15 million liability which was going to cost me $40k on a $20k project, we got it lowered to the $3 million that everyone else in this industry requires).

My company is MuleShoe Engineering and in order to have that name there has to be a P.E. in responsible charge of the company. I could have called it "David's Consulting" without a P.E. A friend of mine got a pretty substantial fine from the State when his P.E. left and there wasn't a P.E. as an officer of the company with "Engineering" in the name. He only did work for companies (didn't even have a Yellow Pages ad), but the name of the company was "holding itself forth to the public offering engineering services". Even if the stuff you are doing is generally done by company (i.e., "exempt") engineers, doing it for someone else is "holding forth" and generally covered.

Differentiating yourself from the herd is a major problem. I did it by writing papers, presenting at conferences, being active in engineering societies, and being active on eng-tips.com. I've never gotten work from a cold call/e-mail/letter. I've heard it works for others, but I've never seen it work.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

 

[IRstuff]

Some states, like California, have industrial exemptions that include consultants for companies. So long as you stay within the bounds of the law, there ought not be an issue:

6747. Exemption for industries
(a) This chapter, except for those provisions that apply to civil engineers and civil engineering, shall not apply to the performance of engineering work by a manufacturing, mining, public utility, research and development, or other industrial corporation, or by employees of that corporation, provided that work is in connection with, or incidental to, the products, systems, or services of that corporation or its affiliates.
(b) For purposes of this section, “employees” also includes consultants, temporary employees, contract employees, and those persons hired pursuant to third-party contracts.

TTFN
faq731-376

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[zdas04]

IRStuff,
I've seen boards (in other states) interpret that section to mean "contractors that work for a single client at at time", so it is a good idea unless you are working for a single client (usually spending considerable time in their offices) to assume that the industrial exclusion doesn't apply.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat