Career Crossroads - The Jump to Self Employment 4

[ME27272727]

Hello. I've searched and read almost every thread on eng tips regarding starting an engineering firm, so I figured it's time I make my own.

I'm a mechanical engineer working at a medium sized MEP firm. I have almost 10 years of experience and my PE. I'm flying up the chain and getting into management and away from engineering, but I'm not entirely crazy about it. I'm in a financial and professional position to make the move to self employment.

I feel I have 2 options: one-man shop or partner and start a firm. I'm leaning towards option 1. I'm extremely efficient in Revit and AutoCAD (and enjoy making drawings). Subscription based software and hardware has come down substantially in price over the years. I really feel I can be competitive on my own, and not have to worry about keeping employees busy.

Option 2 seems more lucrative, but I think I'm a little burned out from management and would like to be completely on my own to start out. If I get bored of being a one man show, I can always hire or partner up in the future.

This thread is just me thinking out loud. Did any of you start off one way and wish you went another? Any input is appreciated. Thank you.

 

[NorthCivil]

Anything bigger than a one man show, your wise to partner up. Split the profit, but also the responsibility. Tough to find that perfect partner though.

 

[zdas04]

I get several solicitations a week from people who want to do my drafting for very inexpensive prices. When the only qualification you list is drafting software, I have to wonder if you really have a firm handle on what it takes to succeed as a consulting engineer.

The main thing is simply not your competence in AutoCad and Revit (or whatever pieces of software you enjoy), the main thing is differentiating your company from mine and the 7 million like mine to greater or lesser extent. How do you plan to do that. Why should I hire you instead of MuleShoe Engineering (for example)? If you cannot answer that then you are not ready. I can tell you with certainty that trying to compete with draftsmen working out of their basements (much like Uber for drafting) is a recipe for bankruptcy. What compelling thing do you bring to the table. A huge network of acquaintances? It helps, but has a pretty short shelf life. Vast knowledge of a niche field? You have to know how you are going to communicate that knowledge to potential clients interested in that niche knowledge.

You need to think really hard about these kinds of questions before you take the leap. I spent 23 years in Corporate America, all the time being active in professional societies, writing papers for conferences and niche publications, meeting people that later became my clients and listening to them (there is no better way to look smart than to listen attentively and asking good questions about what they said). I still knocked on a lot of doors before I got my first client.

[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

 

[monkeydog]

zdas04,
Good short and concise response.

 

[CWB1]

I also concur with zdas. I receive solicitations regularly from design engineering firms looking to pick up overflow work, a big portion of whom have a Solidworks license, the ability to draft a print, and not much else. JMO but when I see a PE <50 who hasnt worked in a specific niche for 20+ years I see an engineer without a lot of experience, not a subject matter expert worthy of hiring.

 

[lacajun]

Older engineers told me years ago it takes on average 10 years for engineers to "come into their own." That is, they're experienced enough to know what they're doing. If you're at that point and you want to pursue either option, do it. If you're unhappy moving up the management chain and burned out from managing, make a change. You're licensed and quite capable of doing the work, since you've been recognized where you are.

As a solo shop, I usually contract work with smaller engineering firms that have the engineers and designers I need. Designers are much better at making drawings look good. They also have the patience to lay conduit, junction boxes, wire, terminations, etc. out nicely whereas I do not. If you want to do your own drawings and have the expertise to do it, nothing should stop you. I don't mind doing some minor stuff here and there but nothing that requires hours of work daily.

There are no wrong answers for how you want to do this and what you want from and for your life. If you make a decision and don't like it, you can make another one and try that, too. Life isn't this rigid, inflexible, set-in-stone journey.

All the best!


Pamela K. Quillin, P.E.
Quillin Engineering, LLC
NSPE-CO, Central Chapter
Dinner program:

http://nspe-co.org/events.php

 

[Terratek]

Running your own business, even a one man shop, will also take you away from the design work. But a partnership to run a hungry machine would probably remove you even further. 10 years in MEP is probably plenty of experience. The main thing you'll need is a list of clients that will do business with you. I get burned out in management sometimes. However, that is not because of the managing so much as it is about having to manage while still being necessarily involved in technical stuff.

The biggest risk to a one man show IMO is that you can only handle so many clients. So, if one of your eight clients goes out of business and then two others shop you for someone else, you might find yourself a little short on income. How about this happens six years into your business? Will you have maintained the same network as when you worked at your current company? I don't know that I would...even knowing I should.

 

[ME27272727]

My intentions when mentioning Revit and AutoCAD were to show that I have a skillset to enable the possibility of going it alone, and also that costs have come down substantially over the years. Some engineers have designers / drafters take care of putting together construction documents, which puts them at a disadvantage if they were to go it alone (without outsourcing). I used to work at a small firm where I had to wear many hats, which taught me things that will be useful in this endeavor.

I guess my burnout is a source of being both a manager and a lead engineer on several demanding projects. Being just a manager or just an engineer seems like it would be a cakewalk! I have a very young staff that I am responsible for keeping utilized, while at the same time managing schedules, performance, and engineering the many projects that I lead. I've done a few small side jobs here and there (with my company's permission), and loved everything about it. It's just a totally different feeling when you are working on your own project that you volunteered for and are in full control of, rather than being force fed. Even if it's just a tiny little renovation.

I already have a home office and workstation set up. I activate software on a monthly subscription basis when needed for side work, so there's really not much upfront cost in front of me. I have a good network of clients that I'm confident can keep me busy when I'm getting started. I have enough savings to carry me through a year of no income.

Another bonus is if the senate tax bill becomes law; it would be a nice boost to self employed S-corp pass through income that larger firms wouldn't be allowed to take advantage of in its current form. I'm thinking early 2018 may be the time to make the jump.

Thank you all for your opinions.

 

[Terratek]

I think your situation is similar to mine in several ways. I too have a young staff and feel like I have been training newbies non-stop for the last three to four years. It gets (really) old. But after a while, I start noticing some of the engineers are starting to come into their own and that makes it better as they become more autonomous. I have had my top engineer start helping with training and also even a little review work. I still review all the work, but it's nice to have the bigger weeds pulled before I get into it. Also, admin staff can be SO useful. And, if your lucky like me, you can assign them to do anything you want (within reason, of course). Something so simple and small as having an admin scan and email my expense reports just feels like it lifts a huge burden off me. Sometimes I get overwhelmed. Other times when everything is working right, I feel like I am not needed which has its own stress... I've also been working toward an MBA which has me more engage in my job as a manager. I'm a very good engineer, but expect that over time that my management/leadership skills will be higher than my technical skills. Not too long ago I was yearning to go on my own. Today, I feel content climbing the ladder. Tomorrow, who knows. I', a fickle creature and tend to vacillate.

 

[Guastavino]

I started my own firm in 2014, with just me, and have stayed that way. I almost partnered with a guy a couple years in, but decided we would both be better off as two independent firms that help each other out with peer reviews, etc. when needed. If you can do your own drafting as you say, that's a huge plus. My back-up work was architectural drafting for an architect I knew. He paid me $25 an hour. Wasn't much, but allowed me to make some money while building up my business. Now, I make enough that I rarely have to do that work, although sometimes I do the arch. drafting and engineering work simultaneously.

If you enjoy working, don't mind the hours, and don't mind waiting to get paid, I'd recommend it. It would be hard for me to go back to working for the man...that's for sure.

 

[ProEpro]

I've been there done that gone back to working for someone else. You are asking the right questions and getting the right answers.

As has been said working for your self does not mean you are engineering all day long.
Do you like project management?
Do you like sales & marketing?
Will you devote the hours each week needed to make the phone calls and keep the work coming?

good luck either way

 

[SLTA]

So. Much. Time. Spent. On. Administrative. Crap. Taxes, invoicing, contracts, insurance, all that sort of thing. If you really want to focus on engineering, hire an administrative assistant to take care of all the business things.

Please remember: we're not all guys!

 

[berkshire]

Adding to what SLTA says;
I ran a business for many years, it was not in engineering , it was in aircraft repair , but the same things apply. I started on a part time basis while working for an employer, this worked for a while, then I got busy and could not work two jobs, at the same time my employer got slow; so the decision was a no brainer. At first life was ideal, I was doing what I liked , then the work load picked up, and I had to hire more people, a book keeper to deal with taxes and paperwork , more helpers on the shop floor, the next thing you knew I was not repairing aircraft , I was ,Gasp , a manager/sales man.
The tasks I loved were being done by my workers, and all I was doing was supervising and looking for work to keep the shop going. This is something to consider if you are good at your business.
B.E.

You are judged not by what you know, but by what you can do.

 

[beej67]

Do it. I did it and it was the best single decision I've ever made in my life.

Don't partner up.

If your prospective partner is worth a heck then he can run his own show while you run yours, and you can share work for a fee to each other. If he's not willing to go out solo, then you probably wouldn't have wanted him as a partner anyway. Partners can be baggage. If you ever do want to partner up, then do so with someone else who's already proven he can run a one man show.

But it will be essential for you to network with other one man shops, or similarly small shops, to share work. If you're too busy, contract drafting from them. If they're too busy, they feed you work they can't handle. Etc. That gives you the flexibility of being a larger outfit while you still maintain the benefits of being in a smaller outfit. Collaboration *is* marketing.

Start as a single owner disregarded LLC. Once you start grossing $200k/yr or a little less, switch to an S-Corp.

Get Quickbooks, and get someone who knows accounting better than you to set it up for you. Do all your IT with google. Keep your projects in the cloud, either Dropbox or similar. Write your own website. These aren't hard things to do. Write it all off.

If things go very well, then you'll eventually be able to offer "partner" type positions under your umbrella for other project managers who have clients and don't want to learn the business headaches you already have. Then they rake more of the money from the project fee, you rake a cut, and everyone keeps more of the fruits of their own labor.

This is how the free market is supposed to work. Live it, love it.

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

http://www.campbellcivil.com

 

[kmart30]

Just do it! Take the leap! What is the worst that can happen to someone with a min. 10 years of experience in the same line of work? If it doesn't work and you have to go back to working for someone else? At least you gave it a crack and you can learn from any mistakes and do it again. Just make sure you have the financial capabilities to take the leap and do it. I started with ALOT less then what everyone is saying and it was the best decision I ever made! Set up an S-corp, get insurance, get a website, and you are off.