New Mechanical Design Business - Update

[Richard63]

Grunt58;

I used mfg.com both as a supplier and as a buyer.

It works great for me as a BUYER of machine shop parts.

However, as a SUPPLIERr of engineering services, it was wasted money. There are VERY few serious engineering projects posted.

The system is not suited well for engineering project bidding. It may be ok if you are looking for small CAD projects such reverse engineering a single part. If you're looking for large engineered projects, I only saw one posted for the year I used it, and the company posting did not really have the funds budgeted to do much of anything.

I highly recommend it for gettting parts manufactured though.

 

[zdas04]

Richard63,
The technique that worked for me was to plan on covering all costs at 1/2 time (about 20 hours/week). I set my hourly rate at that value 6 years ago (next Tuesday) and it is still holding. Up until the last few months I've averaged 55 hours/week of billable time, but even in this tough economy the business is still covering costs. I think that planning on billing more than half time is a recipe for failure (even more than pricing yourself out of the market).

When I started, my rates were the highest around. Now 8-year guys are charging more than me and other 30 year guys are 70% higher than my rate. The only reason that I would raise my rates is to pull back out of the heard (would you buy Chivas Regal if it had a Ripple price tag?).

David

 

[D3DesignEngineer]

Hi,

This is a general message to all. Completely agree when setting 20hrs/week to cover overheads. With regards to pricing of services, one must look at the client themselves. By all means have a standard rate but investigate the clients buying power as well. If it is a private customer, take of 30% just to get the job even if it means running at a little loss for a week. The references you will get from him\her are priceless. Keep your pricing relevant to the quality of your services, if your only capable of providing medium quality drawings and designs then charge a middle of the range price, its easy to judge how good you are by years of expereince and other peoples drawings. People do realise they get what they pay for, end of story. To Grunt58: Marketing a service is always tough, my advice is go to your potential clients face-to-face and be well presented and polite, you'll be surprised how well this works, the potential client will judge you on the way you are presented (you can be 400lbs and present yourself well BTW) and on the image you put forward through your style of business. These subtle things will get you more jobs and will build up your professional rep. I've been invited to many high profile engineering events by my clients because I make sure my work ethics, personal presentation and everything else is top notch, this is a form of marketing, specially when you don't have a tangible asset to sell. Talk about ranting, I'm the pro.

O BTW, just signed my first employee, he's a graduate industrial designer and is great, saving me a lot of stress.

Regards,

W. Mann
D3 Engineering Solutions

http://www.d3s.co.za

 

[Ron]

D3...you make some good points about start-ups. I have been in business a long time. One of my partners is 5'-8" and about 300lbs. When he's on a jobsite, he asserts himself with knowledge....he does his homework and when he goes into a client meeting, he probably knows as much about the project as the project manager, owner, or anyone else on the team. He doesn't take crap from anyone.

Another of my partners is 6'-4" and carries himself like a nice dad who would be nice to kindergarteners. He's also the more intelligent of us and arms himself with ....information. Don't take him on in a project meeting. He's good.

My other partner is a curly haired 5'-10" skinny guy who looks like he should still be in college. He holds a Master's degree in structural engineering and has 10 years of experience. When he opens his mouth on a jobsite, the curly haired kid image goes away. He knows his stuff.

If you've counted, I have 3 partners in my business. We all know the importance of preparation and knowledge of the subject. We don't go into a client meeting without being armed to the hilt with information. If it's important to you client, it had better be important to you.

The best marketing you'll ever get is repeat business and referrals. If you don't back those up with confident competence, go work for someone else.