Finding Clients in the Market 4

[Terratek]

I've been at this engineering thing for about 10 years. I work for one of the bigger companies doing what I do, and in one of the larger metro areas. Sometimes, I feel like I must know everyone in the business, considering the hundreds of jobs each year that my department chugs through (which I am involved in all of them as the dept manager). This is not correct, though. There are just oodles of people that have repeat work in the same metro that I've never heard of. I can easily identify 20 plus competitors that I know of that have regular work. All the work that gets done by everyone combined is hard for me to fathom. In my seat, it seems like I could throw a rock and hit a client. But at the same time, if one starts their own business, they might not be able to get any work and fail.

All this just to ask those self employed engineers about how their businesses were begun, what it looked like then and how it looks now. Kind of open ended, but I'm always inspired to hear these stories while I plot my own long term goals.

 

[beej67]

I'm in a different field than you, but I will share my experience.

I was department manager of a smaller water resource department in a mid size site civil firm, that focused on private land development projects. We set our firm up so my department of three handled 100% of the stormwater for the entire 40 person company, which included 4 site civil design teams who had projects all across the southeast. On our projects, the site civil tasks were all similar but the hydro was very different, so we found some business efficiencies in letting the designers pin their ears back and do the site while farming all the stormwater related "reinventing the wheel" to my group. Me and my guys did 80+ hydro studies per year, all the major culvert design, flood studies, and anything else related to stormwater, as a support group for their efforts. Thing ran like a dream. We got very good at what we did. They used our hydro expertise as a marketing point.

I always wanted to expand my department by taking on the hydro work from other smaller firms that I knew didn't have the expertise we did, but discovered nobody would bite because they were afraid of losing jobs to a competitor.

My company was hit very hard by the great recession. Most of the small shops we were aware of went out of business in this region, many of the mid sized shops got bought out by the big outfits who had paths to suck on the ARRA teet, and we went from 40+ employees down to around 7. I hoped they'd lay me off so I could start my own firm, but they never did because I could also do all the site civil tasks, so they basically had me doing everything. Company became half management, everyone furloughed, nasty situation. Anyone in our game went through that or worse in 09. So I up and left them, told them I'd still do their stormwater on a subcontract basis, and told them to rehire someone else to draw parking lots and profile sewers. Didn't make a whole lot of money in 2010, but it did give me the time to set up all my business infrastructure, accounting, website, etc. As I told them in the meeting when I broke the news, "if you're a surfer, the best time to paddle is between waves." Which at the time was just something I pulled out of my ass during the meeting, but it turned out to be pretty true.

So as their business picked up in 2011 and beyond, I did their hydro and flood work on a subcontract basis, for a lower overall fee than I was billing against the jobs back when I worked there. The catch, though, was I was taking all the multiplier (you know all about that if you're a manager) and putting it in my pocket instead of paying it up to the managers salaries and overhead. So I worked less, made more per hour for what I did, and their profitability looked better, so everyone was happy.

Over the prior decade I'd made some good contacts with our other midsize competitors, and as an adjunct professor I'd made some additional contacts with entry level folks and small shops in the area, so I made sure all of them knew what I was offering. Since I knew the budget side, I made sure I could meet their hydro needs for less than their budget would have been for hydro, and they also got a level of expertise on their projects that they couldn't afford to maintain full time on staff if they were a small or mid sized shop. Because of how my prior company was set up, I was very in tune with how to collaborate during the design process and adapt to design changes on their end that would affect my work.

So for the first few years, I mostly worked for them, but as I developed my business I expanded my client base. I still mostly do work for other engineering companies, but I supplement that with legal testimony, education, and the occasional full civil design when it falls in my lap, although I don't market that service because I don't want to end up in competition with my clients. I also can afford to do work for single family homeowners and HOAs, who have shallow pockets, because they often don't need much and their jobs are simply too small for a big company to fool with. Since all the money goes in my pocket, it's still good work for me.

The total number of projects I work on, on an annual basis, has gone down, but the money I pocket on it has gone up, because I'm reaping more of the rewards of my own labor by extricating myself from the "timesheet / multiplier / profitability" monkey business that larger engineering companies use to track their revenue. Instead of part of my paycheck going to pay for rent and IT, I keep that part and even get a write-off. IT is amazingly cheap when you're small, and working from home is a huge improvement in anyone's quality of life.

Most of my marketing is still word of mouth. I buy lots of folks lunch and explain who I am and what I do. I make additional contacts whenever I run into someone new in a collaborative job with one of my existing clients, and I be sure to take the time and explain my operation to them. I get work because what I do is valuable, and meets a need in the small to mid sized engineering marketplace.


Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East -

http://www.campbellcivil.com

 

[oldestguy]

Not sure if you have a question, but some observations from me might help. Contacts, contacts, and contacts are required. What organizations are you in and how active are you? Do you participate at all with your company business development? Remember when getting started there is a lot of leg work and what you are doing now ought to be s good start. Early on and maybe for a long time there is no such thing as a 40 hour week. Explore insurance needs and the cost. In your line this is mandatory. How is the savings account? It has to carry you for a long time, usually. Finally I think 10 years experience is barely enough.

 

[kipfoot]

In my seat, it seems like I could throw a rock and hit a client.

I recommend that you not do this when you're just starting out... later on you may have no other option.