HELP!! - UK Solidworks/Ansys consultant - charge rates?

[StructuresDan]

Hi all,

Having looked through the forums in the past I know the issue of charging rates has been asked on a number of occasions but I would like to request some specific advice from some of those structural engineers (mechanical) out there who have gone it alone. Especially those in the UK.

I am about to give up a permanenet position as a Charetered Mechanical, Senior Structures Engineer and startup a one man band structural analysis firm specialsing in design/FEA/CFD analysis.

I am lucky that I have been able to gain the support of a local University who are willing to back and support me. In the past they have had to turn down work because they haven't had anyone to outsource this type of work to. The amount of work hasn't been significant (hence them not taking anyone on on a permanent basis). They are willing to sub-contract the work if and when it comes in, to me. We are hoping that the magnitude of the work load increases once I come on board and we begin to market/advertise the capability.

They will essentially be providing me with the infrastructure to work in (typical business incubation centre arrangements + more) but would also be providing me with commercial licenses for Solidworks and Ansys.

The problem is.... The University want to charge potential clients £500 - £550 per day for the proposed design/stress/cfd work and will pay me £300 per day.

Don't get me wrong - I think £300 per day is a more than reasonable rate for me! However I am worried that £550 per day is too much to charge potential clients and bring in any work. I am not confinced it is competitive enough.

From what I gather, charge out rates for design/stress analysis are more along the lines of £350 - £400 per day to a client. Though maybe I am talking agency rates and not consultancy rates?

I'm confused - I want the charge out rate to be representative of my skills and experience (7 yrs in the Aerospace industry) yet I also want it to be competitive. The University on the other hand has to cover their overheads - though an 80% margin seems quite a lot to me!

I am being told that I have the backing and full support of an Academic Institution behind me. I am told that rates of £550 per day is still a reasonable/typical rate and less than would be the rate for full time academics working on a consultancy task.

What are your thoughts please?

Many thanks for any comments/advice that you might share.

Dan

 

[PeterStock]

I am in the US (Puerto Rico is part of the US) and I am not familiar with the UK. But some things I think you need to make sure of.
Will they allow you to take on clients outside of the universities support?
Will you be able to use the software for these clients?
Will they allow you to take on work for a client that had gone thru the universiy that asks you to work directly for them?
If you can not do work outside of the university structure, it sounds to me that you will be in effect be a part time employee of the university.

Peter Stockhausen
Senior Design Analyst (Checker)
Infotech Aerospace Services

http://www.infotechpr.net

 

[StructuresDan]

Hi Peter

Thanks for your comments, they are very valid points and if I am honest I haven't addressed each of them specifically with the University yet. I can see what you're saying though.

I have agreed with the University that as the Director of my own Limited Company I will be able to, and am entitled to take on clients outside of the University's support. However it would be likely that I would not be able to use the University's software for these clients (unless we have some other agreement i.e. I rent it back from them for example).

From the structure of the contract we will be putting in place and the type of work my business will be doing I would hope to demonstrate that I'm not an employee of the University and am in fact working as a genuine sub contractor to the University, as and when they need me to (and when I am free to).

Dan

 

[PeterStock]

There is a thread in another forum that may help:

http://www.eng-tips.com/viewthread.cfm?qid=256305&page=1

I would see if the University would allow you to use the software for other clients in exchange for a discount on your work for them. Otherwise you need to purchase the software for use on the non University work. Otherwise you may not be in a position to take on other work as you would need to purchase said software. In any case you may need to purchase software to do work for other clients who use other CAD and or FEA packages.

Peter Stockhausen
Senior Design Analyst (Checker)
Infotech Aerospace Services

http://www.infotechpr.net

 

[StructuresDan]

Thanks very much for the link Peter. The thread seems very relevant to my situation.

Very much appreciate your comments. I'll certainly give this some good thought and speak to the University at our next meeting.

Thanks again.

 

[cvg]

converting to US dollars, this is about $100 - $110 per hour which does not seem high to me. Although I am a senior level civil engineering consultant, I bill out at $145 per hour which I believe is about 88 pounds if I have gotten the exchange rates right. If I was in LA, New York or San Francisco, I would be billing at an even higher rate.

 

[GregLocock]

cvg - but I don't think you are being hired out as a solid modeller/node pusher.

Where I currently work such people on long term contracts might get $60 per hour, there again they might not.




Cheers

Greg Locock

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[desnov74]

StructuresDan

As mentioned it is not that high, compared to here in the states. Can you justify the rate and sell it? (or possibly go hihger) Do you or could you say that being affilied with a university adds a unique value?

In otherwords, could you say that interpretation of simulations are have the support of PhD's? Could you consult/get support these professors on issues? There are many simulation and FEA people making pretty charts (node pushers as mentioned above). That would be an added percieved value to a client.

Or perhaps the school has a lab that it can lease out, and actually test the FEA simulation. Few consulting firms have that advantage.

 

[KENAT]

Are you a "Solidworks/Ansys consultant" or a stress analyst consultant that uses Solidworks/Ansys consultant as tools to help them in their analysis?

I'd pay a lot more for the latter.

Posting guidelines faq731-376

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

(probably not aimed specifically at you)
What is Engineering anyway: faq1088-1484​

 

[StructuresDan]

desnov74,

I will essentially be affiliated with the University and yes I will have the support and backing of academic staff (Researchers, Doctors and Professors). I am in quite a unique position really so will have to seriously think about how best to market this USP in my business plan.

In fact, the University also has a capability to validate FEA models in the form of practical laboratories etc. so will need to make sure I take advantage of these aspects to help justify the rate and promote the business (in addition to the above).

KENAT

Yes I am a Chartered Mechanical Stress analyst by profession, Solidworks and Ansys will merely be the tools by which I plan to carry out the work. I've used others in the past (Nastran/Patran and Catia). My skills as a stress engineer with the backing of a Academic Institution is what we will be marketing - not purely a "Solidworks/Ansys consultant" as I might have aluded to above.

I appreciate your comments, having given it some thought I think I am better off sticking with this rate and see how things work out. I can always (reluctantly) consider lowering it should the work not prove forthcoming. Though if we both jointly market the capability and company in the right way, I think the potential is there and hopefully gain an advantage over my potential competitors.

Then again I am young, naive and an inexperienced business man... But.... I am ambitious, dedicated and hard working engineer!

Fingers crossed!