Starting an engineering firm --- Have any advice? 1

[Eaglo333]

Hello Eng-Tips,

I'm starting an engineering firm. Does anyone have any advice or information on insurance requirements, etc...?

Thanks for all of the help.

E.

 

[cvg]

there is a search button at the top of the page. Insurance has been discussed ad nauseum

 

[jdgengineer]

The advice you'll get will vary from person to person and will also largely be dependent on your goals and situation. Are you planning on starting as a one man shop running out of your house or bringing on partners and staff from the beginning? The complexity of your situation will likely drive a lot of your decisions so its hard to give any real advice without knowing your specific situation.

 

[zdas04]

Eaglo333,
jdengineer's statement couldn't be more correct--your situation determines how you start up. Even down to "do you have someone in responsible charge with a P.E.?" If not, don't put the word "Engineer" in your business name.

For any business structure, the primary reason for failure is under-capitalization. When I started my company I made sure that I had enough money in the bank to cover company expenses for 6 months and personal expenses for a year. Good thing too, because in my industry, you invoice at the end of the month and they tend to pay a month or two after the deadline for payment (i.e., the contract says 30 days from receipt of invoice and most big companies call that 30 days from approval and take 60 days to approve it). Spouses get really upset when your accounts receivable are $50 k, but you still have to sell her car to pay the light bill.

[bold]David Simpson, PE[/bold]
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

 

[imagitec]

As David alluded to, cash is the life blood of any business, engineering included. I've posted a little bit about sales and marketing for engineering in replies to the thread How/where can engineering design firms for sale be identified?

The other part of the equation is managing cash. You will also be responsible for making your own estimated tax payments, including an extra share of FICA, and other fun things.

You may want to check out Cashflow for Freelancers. I haven't read the book, but I listened to the author's interview about variable cash flow on The Business of Freelancing podcast. It was good.

Incidentally, the author, Diana Huff, does marketing for small, family run manufacturers at Huff Industrial Marketing. So she not only has experience as a freelancer/consultant, but is also familiar with the kind of "hard" engineering that many of us do here and the market for it (as opposed to software engineering, web design, and the other types of freelancing that get more coverage and have more dedicated resources than engineering).

- Rob Campbell, PE
Learn precision engineering at [link practicalprecision.com]practicalprecision.com[/url]

 

[oldestguy]

Aside from money and insurance, do you have sufficient backup information (such as experiences resume, positive clients, etc.) to bring in new clients?