Advice Requested - Chance to leave salary and go independant 3

[ACuriousEngineer]

Hi,

I am seeking some advice as I have been made an offer that seems too hard to refuse. I am currently a salaried structural engineer on a reasonable pay level for my work. I have ~4 years of experience so I'm not a rookie but still have plenty to learn. I still have some room to grow in my current position but maybe only a couple more years. The firm doesn't leave me with too much to complain about.

Recently an independent consultant proposed a form of partnership. Essentially the person is looking towards moving away from full time work and would like somebody to look after their clients at times when they are unavailable. Medium term the opportunity is there for a handover of all clients. To go out on your own and have a good client base handed to you seems almost too good to be true. To avoid taking on past liability I'll be starting my own businesss rather than a direct partnership. I'll have to start building my own client base too, my networking on this aspect isn't extensive but it is there.

Do people here have advice regarding the choice? Pitfalls to avoid, recommendations on making the step into independant consulting? Any regrets for those who have left salaried work?

Thanks in advance.

 

[miningman]

Im not suggesting you decline this opportunity , but be aware of the greener grass syndrome.

 

[phamENG]

A very similar thing happened to me a couple years ago.

1) I didn't have a ton of experience either, but at 4 years you only just got your license. Are you sure you're ready?
2) Who is the person offering you all of their clients? When something seems too good to be true... My 'benefactor' was somebody I'd known my whole career. I knew why he was slowing down, and where his clients should have been going - and I knew why they weren't. Make sure you're familiar with the situation.
3) Only about 40% of what you'll do is actual engineering. Are you sufficiently familiar with all the other pieces? Running a business, tax and regulatory compliance, managing people, doing the bookkeeping, production (drafting, etc.), marketing and BD...

Sounds like you have some of the important aspects covered. Make sure you talk with a lawyer, of course. And get insurance quotes.

Don't believe the 'be your own boss' lines. Instead of having 1 (or maybe 3) bosses you have to answer to, you're going to have a lot. I think I have 30 at the moment. And they don't coordinate - or maybe they do and that's why I'll go 2 weeks with no phone calls and then without warning my voicemail box fills up in 3 hours.

Find clients that respect you. To many we're just a commodity to be shopped, used, and discarded once the permit is issued...unless there's a problem and they want your insurance. The good clients value not only your ability to stamp a set of drawings, but your technical knowledge and perspective as well. They understand you bring value to the table and your presence can make a project better. These sorts of clients are very hard to find.

Whatever you choose, good luck.

 

[ACuriousEngineer]

Thanks for your responses. One thing I should have been clearer about is that the offer isn't a take or leave it now situations. I have approimately a year to ready myself and before moving away from my current position if that is what I choose.

Im not suggesting you decline this opportunity , but be aware of the greener grass syndrome.

True. I'm watching that. I think the grass is reasonably green already where I am. But I do see this as an opportunity that is too good to pass up. I'll certainly be putting every effort into not burning bridges with my old company. Keeping that network alive could be beneficial.

1) I didn't have a ton of experience either, but at 4 years you only just got your license. Are you sure you're ready?

No. I am not 'ready'. Though I've probably had more eperience and responsibility than is typical for 4 years, I'm certainly quite aware of my limitations. But I also can make every effort to get as ready as I can.

2) Who is the person offering you all of their clients? When something seems too good to be true... My 'benefactor' was somebody I'd known my whole career. I knew why he was slowing down, and where his clients should have been going - and I knew why they weren't. Make sure you're familiar with the situation.

This benefactor is someone I've known for several years. I have trust in him. I know why he is slowing down, I need to get to know his clients. I will do this before choosing to take the leap. Some of his client's work would be an extremely smooth transition for me, the residential stuff less so.

3) Only about 40% of what you'll do is actual engineering. Are you sufficiently familiar with all the other pieces? Running a business, tax and regulatory compliance, managing people, doing the bookkeeping, production (drafting, etc.), marketing and BD...

No I am not sufficently familar with the other pieces. I'll absolutely need to. Managing people, drafting I have handled, marketing is something I've already seen opportunities to target. The business, tax, regulations, bookkeeping etc is a unknown for me, I know enough to know that there is alot to consider there!

Don't believe the 'be your own boss' lines

Thanks. Not poeople seem to let you in on that secret. Also in my current salaried role I am almost in the position of being my own boss as I have control over my own time and priority of tasks.

Find clients that respect you. To many we're just a commodity to be shopped, used, and discarded once the permit is issued...unless there's a problem and they want your insurance. The good clients value not only your ability to stamp a set of drawings, but your technical knowledge and perspective as well. They understand you bring value to the table and your presence can make a project better. These sorts of clients are very hard to find.

Great advice. I should find out more about his clients from this perspective. I believe they are good ones but I should ascertain that for myself. In my current salaried role I'm used to work of the 'good client' variety so I've been lucky. But I'm certainly aware of the bad client variety and I've seen enough comments around to know that many structural engineers are commodity items.

 

[KootK]

Independent practice can be a fun adventure. Go for it if the details look promising. With regard to those details:

1) Whatever this "handoff" looks like, be sure to get the details of it in writing before you invest too much of yourself in this setup. Be sure that this isn't a sneaky way for the original owner to sell his business.

2) In a sense, there's no such thing as a true client handoff in the context of a solo operation. What you'll get is an introduction to the owner's clients. That's worth something but, once the introduction is made, you can expect the owner's clients to start shopping your service against the the other local options for structural engineering services.

3) This is a bit nebulous but I feel pretty strongly that there's only one kind of person that should be out on their own: someone who could do it on their own from scratch if they had to. Most other permutations tend to fail in my experience. Oftentimes, folks go with partnerships in order to hedge risk. That often does not work and the risk remains.

 

[KootK]

I do think there's something to "being your own boss". You won't be completely bosslees as phamENG pointed out but, at the same time, you will have removed some boss layers. You'll basically be down to only one layer of bosses: your clients. And that's not all that much different from a salaried gig, at least if you're doing it right. When I went on my own, I started working early and took 2 HR lunches so that I could race around on my road bike for an hour at lunch. It's the best lifestyle improvement that I've had in a decade. The world's in flux at the moment but, for most of my career, that would not have been possible with an employer.

 

[phamENG]

One way I've handled the "transitioning" of clients:

I do a fair amount of work as a subcontractor. My mentor gets the projects from his client pool, and then hires me to do the work. I get exposure to the client to get to know them and they get to see my work. Sometimes the final product has his logo, sometimes mine - depends on the client and their willingness to have somebody else do the work. Once the client is satisfied with my ability and my services, my mentor informs them that he's slipping further into retirement and to call me from now on. They can still shop, but I get at least some advantage.

One thing that made this possible: I'm able to get enough of my own work to not be completely dependent upon him. Things would be tight for sure, and I probably couldn't have started when I started without him, but I don't have to pander to him to keep my livelihood.

And KootK is right - you do get some added flexibility. The amount will depend on 1)what kind of schedules you're working with (if you have 3 big commercial projects with 6 months schedules you'll have more control than having 30 residential projects with 2 week schedules) and 2) how well you can stand up for yourself. If you're worth it, even some of the most impatient clients will work with you on schedule.

 

[ACuriousEngineer]

1) Whatever this "handoff" looks like, be sure to get the details of it in writing before you invest too much of yourself in this setup. Be sure that this isn't a sneaky way for the original owner to sell his business.

Yes. This is needed. I like to work on trust. But having something in writing helps to establish that expectations are clear to both parties.

2) In a sense, there's no such thing as a true client handoff in the context of a solo operation. What you'll get is an introduction to the owner's clients. That's worth something but, once the introduction is made, you can expect the owner's clients to start shopping your service against the the other local options for structural engineering services.

Absolutely. I will need to earn the respect of the clients otherwise they'll quickly go. Some of them I have confidence in my ability to do so, for others I'll need to assertain that. I have the possibility of bringing over one decent client from the get go. Beyond that it is about ensuring I have a strategy to grow the client base which I am under no illusions can be a difficult challenge. The one advantage I have is my experience in sectors that few other engineers are involved in.

I hope to minimise my residential work, but I expect I'll need some of this to fill the gaps and keep work ticking over. If you aren't busy you take what you can get!

3) This is a bit nebulous but I feel pretty strongly that there's only one kind of person that should be out on their own: someone who could do it on their own from scratch if they had to. Most other permutations tend to fail in my experience. Oftentimes, folks go with partnerships in order to hedge risk. That often does not work and the risk remains.

I believe this is biggest warning sign against me heading away from a salaried role. As I am not sure that I am quite "someone who could do it on their own from scratch if they had to".

I have the engineering skills and the client managing skills. But my entrepreneurial and businees management skills are not particularly strong. Those skill can be learnnt, but I am aware they are not part of my natural skillset. (Mind you I've met other indipentent engineers where this applies also!)

I do think there's something to "being your own boss". You won't be completely bosslees as phamENG pointed out but, at the same time, you will have removed some boss layers. You'll basically be down to only one layer of bosses: your clients. And that's not all that much different from a salaried gig, at least if you're doing it right. When I went on my own, I started working early and took 2 HR lunches so that I could race around on my road bike for an hour at lunch. It's the best lifestyle improvement that I've had in a decade. The world's in flux at the moment but, for most of my career, that would not have been possible with an employer.

Being your own boss seems to be right up there for most people. For me it isn't the biggest motivation. For me my biggest motivation is career ambition. My current career position is good but has limitted growth potential in the long term. If I look at many other salaried roles I don't see greener pastures than the stuff I'm already on. The greener pastures are establishing myself as an independent consultant with a good client base of specialised work. It the specialisd work I hope to focus on, anything to get away from being a commodity item. Despite my short experience I've managed to specialise fairly well.

I suppose that last paragraph is the key question. I need to ask myself whether I can maintain and build a suitable client base.


Thanks again for the comments. I do have time to think this over. There are always risks in career changes, but sometimes it is best to grab opportunities when they arise... I need to do lots of preparation work if I want to take the jump.

 

[KootK]

The one advantage I have is my experience in sectors that few other engineers are involved in.

Yup, that's a big win. I wish that I had some of that. Niche is always a good place to be.

I have the engineering skills and the client managing skills. But my entrepreneurial and businees management skills are not particularly strong. Those skill can be learnnt, but I am aware they are not part of my natural skillset. (Mind you I've met other indipentent engineers where this applies also!)

Over the years, I've come to view independent operators as being of two kinds:

1) The true entrepreneurs. Those with the ambition and talent to start something and grow it into something substantial over a short time horizon.

2) The self employed. This is less spectacular but still excellent. And it can be done without all of the Don Draper stuff if you do good work and have a good reputation.

Legally, I own a business. Not really though. I've been self employed.

 

[rb1957]

remember this is a business decision. how much revenue is there ? enough to compensate for the benefits you lose from a full time job.
what are the prospects, as far as you can guess ? How does the future income look ?? What are your commitments like ? Can you sustain a dry spell ?
would your current employer become a client too ?

beware of the trap ... having a ready client bases implies you may not put much effort into getting new clients.

Be ready for all the non-engineering jobs that come along with owning your own business.

Are you psychologically ready to lose the lift belt that is a staff job ? Not suggesting you're not, you wouldn't've posted if you felt unready, just in my experience there are two very different personalities ... full time staff and independent contractors.

whichever you decide, good luck.

another day in paradise, or is paradise one day closer ?

 

[dik]

Do you have the resources that you can survive for a few months?

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Feel any better?

-Dik

 

[ACuriousEngineer]

Do you have the resources that you can survive for a few months?

I have the resources to survive several years. I'm frugal and have been strategic about where I direct my resources. So that part of things is not a challenge.

just in my experience there are two very different personalities ... full time staff and independent contractors.

I've been an independent contractor before, but not as an engineer. Honestly I prefer it. I get paid for the hours that I work and I don't get paid if there is no work. I prefer it like that. When times are busy I'll work the extra hours to get things done, when things are slow I'll take a week off guilt and stress free.

remember this is a business decision. how much revenue is there ? enough to compensate for the benefits you lose from a full time job.
what are the prospects, as far as you can guess ? How does the future income look ?? What are your commitments like ? Can you sustain a dry spell ?
would your current employer become a client too ?

beware of the trap ... having a ready client bases implies you may not put much effort into getting new clients.

The revenue is susficicient. I would hope I could leave and keep my current employer as a client, that will be a delicate discsussion but something that I can manage. Absolutely there has been little effort put into getting new clients as it hasn't been necessary. I'd have to change that. I've already identified avenues in which I could approach doing this.

I've come to view independent operators as being of two kinds

I'm an engineer not a businessman. The way I see it that this is an opportunity to expand my engineering opportunities, and hopefully get well compensated too.

Thanks again for the advice and questions, I really appreciate it.

 

[1503-44]

Is PE registration required to do engineering work in your country?

 

[human909]

I'd be asking yourself what bridges are you burning if you choose to make the career change? If things go belly up can you readily get employed in a similar capacity with similar perks as your current role? If you can readily go back to a salary life if things change then you aren't risking much. Alternatively if you are throwing away something good because the grass looks greener like 'miningman' said then be careful.

Overall it seems a good prospect, just do your due diligence.

 

[rowingengineer]

All the above is great advice, the only thing extra I can add is take a look as the previous designs and make sure your comfortable with them. If you're designs are significantly different, it doesn't generally lead to a great handover experience. This is true in either direction of efficiency.

 

[1503-44]

"I'm an engineer not a businessman."
That's going to change. Get ready.

 

[WARose]

Only you know if you are ready (and apparently somebody thinks you are as you were approached for this). But just a note: a lot of times people will recruit/go after somebody just licensed because they want to catch them before they get too expensive.

As someone who does work on their own, my best piece of advice is: be sure you have the work before you walk away from your day job. I had clients lined up before I had a company. A lot of people will leave their job first.....and then find clients. That creates some gaps in pay.

 

[HouseBoy]

Someone once told me that when you work for yourself, you only have to work half days and fortunately, you get to pick which 12 hours that is....

Seriously, the above advise you're getting is very good.
I think that if you're smart and not afraid of hard work, you can do it. I'm not very smart and I did it!
I also think the "niche" market is a good thing to have. That has helped me.

 

[KootK]

When times are busy I'll work the extra hours to get things done, when things are slow I'll take a week off guilt and stress free.

Yeah... I used to think that myself and proselytized upon it at length. And it has worked out that way at times and might be possible all of the time with enough discipline. Some common ways that it can go wrong:

1) Unless you've been starving for a while, you've got stuff in construction pretty much all of the time. And, if you mean to stay in business, you'll probably have a random but steady-ish stream of RFP's coming in and needing 48 HR turnarounds. So the random time off gets interrupted by the myriad demands of that stuff. About the only way to take a planned vacation and not have to work during it is to add staff.

2) The impetus for high earnings and to never turn a good client away to a competitor often lead to one very rarely saying "no". That, in turn, can lead to being excessively busy or to respond by adding staff.

3) If you add staff, and there are fine reasons to do that, cyclical down down time becomes a lot less relaxing because you've then got to either find work for your people, risk losing them, or live a cashflow nightmare.

I have taken a few weekdays off to go skiing, do some bike touring etc. At the same time, I've not taken a vacation or attended an out of town family event since 2016 without my laptop in tow. And, worse, when I'm not on the laptop, I'm often not fully present.

That's me. You may well be able to manage the situation much better than I have.

 

[JLNJ]

When I earned my PE after 4 years there were still many, many things I didn't know. I would not have been technically competent enough after just 4 years to be out on my own, and I certainly wouldn't have been savvy enough to run a business and to be the author of my own contracts, either.