Offered Opportunity to Open Engineering Firm - Want Feedback 2

[JD P.E.]

Through a professional relationship I have been offered the opportunity to open an satellite office for a relatively young engineering firm (5 years old). The main firm has about 35 employees and caters to mostly O&G/petrochem - revenues somewhere around 7-8 mil. The overall business is growing fast, is debt free, and the owner who is also an engineer is focused on opening other locations. There are no established relationships in this area and it would be on me to generate business and do the engineering for the projects I'm comfortable with (if PE required, the owner would review & stamp). If it gets busy I can leverage other employees at the headquarters while I work on hiring other engineers. My primary focus would be on the regional power plants, pulp/paper mills, and refineries - about 55 total.

The scope of my services would include a range of maintenance & reliability consulting as well as vessel/tank design, pipe design, pipe stress, etc.

My personal experience is slim since I've been an engineer about 4 years. However, I've always been the hardest worker in the room and people inside and outside the companies I work for took notice (reason I was offered this), but I also know I don't know everything.

Is there someone with a little more experience that can comment on if this is either a great opportunity or a train wreck waiting to happen? I'd preferably like to hear from people who have taken career risks or went out on their own - but all opinions welcome.

 

[phamENG]

this is either a great opportunity or a train wreck waiting to happen

Many of the greatest opportunities are train wrecks waiting to happen...you capitalize on the opportunity by delivering the train safely to the station.

With that said, hard work may not be enough in this case. Can you walk into one of the mills, sit down with head of maintenance and/or engineering, and talk shop with them in a way that will make them feel comfortable letting you tinker with their stuff? In the best case they'll be worried about you endangering their people, in the more cynical they'll just not want to deal with fixing your mistakes.

Even if there are other engineers to back you up when doing the actual work, you still have to sell it. And when you're doing that, you'll likely be on your own.

How many other satellites is this firm launching at the same time? Having a staff of 35 to leverage may sound great...until you realize you're one of 5 new, understaffed offices trying to pull labor from an already over booked main office.

That's not to say you can't...I don't know you. You may be more than capable of pulling this off. I went out on my own after 6 years (closer to 12 if you count all of my pre-college O&M engineering time in with my structural design engineering), I know some classmates who took over (established) regional offices at 8 years. I also know that some people are capable of significantly more than the 'normal' age/experience would suggest...but also that those norms often exist for a reason.

Based on this briefest of glimpses into who you are, you sound like somebody who has a good head on their shoulders and a knack for introspection and self assessment. Talk to the boss. Share your concerns. You'll be leaning on them a lot through this process, so test those waters now. How willing are they to help develop a plan that will make you feel comfortable and help you solidify your reputation with them?

 

[IRstuff]

On the face of it, the revenues seem a bit lean for 35 engineering employees $228k/head. The company would seem have to have slim overhead costs to pay reasonable wages.

TTFN (ta ta for now)
I can do absolutely anything. I'm an expert!

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[JD P.E.]

Thanks for the feedback I appreciate it. I'll answer some of your comments below -

Can you walk into one of the mills, sit down with head of maintenance and/or engineering, and talk shop with them in a way that will make them feel comfortable letting you tinker with their stuff? In the best case they'll be worried about you endangering their people, in the more cynical they'll just not want to deal with fixing your mistakes.

That's a fair point. At my last job I was under a director of engineering/maintenance who was well known in the industry and I could handle the pressure of getting grilled and coming out on top. Drumming up business will be new-ish but I am comfortable talking shop with what I know.

How many other satellites is this firm launching at the same time?

This will be the only office opening right now. They opened their second office about a year ago and it is doing well.

Talk to the boss. Share your concerns.

It does APPEAR that the boss wants this to be successful - I mean it wouldn't make sense if he didn't. We have a meeting in the coming weeks to discuss the client list I made, potential revenue numbers, and moving forward. Based on that information he'd help with a 1 year business plan to get it going. He did reiterate that the success depends on me but that'd I'd have support (which sounds good, but the other new office has had that positive experience so likely is true.)

 

[phamENG]

If it really is 35 engineers, $228k isn't terrible. In my world, that works out to an average salary of $76k. Not great, but may not be too bad depending on cost of living where they're located, job market, etc. It may also be higher if, as IRstuff mentioned, they operate with a really lean overhead.

But "35 employees" could also mean 10 engineers, 5 draftsmen, 10 field techs, and 10 office support staff. So it's hard to say.

 

[TigerGuy]

Too often, you will find the 35 at headquarters are too busy servicing their local clients to bother with your projects.

I loved being told to grow sales at my location, that certain projects had to go through specific individuals at HQ, and have those folks tell me to "Reject this work, we are too busy to help with it."

If you go into it with your eyes wide open, maybe you can safely navigate the hazards.

 

[lacajun]

JD P.E., what I ran into is being an unknown in my area. If I had begun my business where I was a known quantity, I probably would have had an easier time. Selling can be hard and you need to know how to do it, without coming across like a used car salesman.

I had a company purchasing gal tell me repeatedly that I wouldn't get any business for three years. They had been burned by so many others they were going to wait three years to see if I was still around. It never happened so my conclusion about them being the bigger part of their problems was right, in my mind. If companies don't hire you, you cannot stay in business. I grew to resent her over the years, as she seemed to increasingly revel in her power, with each visit. I thought it was stupid but that's me. Find your way around petty people like that.

Running my own company was the most interesting job I have had. I just couldn't make it work long term. Life happens and often much of it is beyond your control. But it was a lot of fun and I met some wonderful people. I learned things I never would have otherwise. We live in a very dynamic world and it is a lot of fun! Business can be very creative so you'll see how things work, which many never see.

You will learn a lot opening an office and, if you have this opportunity, I say take it. If you want to do it, then do it. Don't start racking up regrets now. If you succeed, this will be a big boost for your career.

Look at your state's unemployment to get an idea of how tight the labor market is. And find out if they will help with relocation to build up your office.

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

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

 

[SWComposites]

JD,
- sounds like you are not currently working for this company, correct?
- if not, maybe you could arrange to work in their current office for a few months, to get to know people, go on some sales type calls, etc before starting up the new office.
- think hard about your cold call sales skills and comfort; many engineers are very bad at that; there are some that are naturals at it.
- what is your family/relationship situation? This opportunity could be a high stress, long hours thing at first; is that going to be an issue?
- if not, then its a lot simpler to dive into one of these opportunities now rather than later when you have family complications.

 

[CWB1]

Need more info bc the answer ultimately depends largely on your education and experience with the non-technical aspects of engineering. Engineering training programs vary a LOT and thus the knowledge and skill of a junior engineer at four years varies greatly. The mega-corps hire dozens of engineering grads annually and have formally organized programs with dedicated resources/budget to teach both the technical and (more-importantly) non-technical aspects of engineering, as well as continuing-education and management/executive level programs. Small companies generally have none of that and are best avoided for at least your first decade, especially consultancies which are notorious for lacking basic technical competency.

A very well-trained, top engineer could make this work at four years but for 95%+ it'd be an absolute train wreck. IMHO at a minimum you'd need:
Legal education/experience - the usual 40 hours attorney-led annually x4 years minimum, plus four years experience handling NDAs, IP, import/export, and other docs.
Contract education/experience - Again, hours annually attorney-led and a few dozen major contracts reviewed/negotiated over most of four years.
PM education/experience - at least a mid-level cert ala PMP and experience leading $1Million+ projects involving multiple companies' staff.
Safety and trades certs to work onsite.
Most of four years' experience in either product/project definition or field service engineering.
Solid competence running a variety of CAD and analytical tools bc most customers today expect you to use their native CAD and analysis packages, not yours, and you're their POC & lead.

How much of that do you realistically have? Assuming you have all of it, the remaining hurdle is simply the fact that at four years you're likely still very young and most decision-makers won't take you seriously as either a project lead or sole sales/project def engineer.

I'd expect a consultancy grossing $8M to have 5-15 employees. With 35 on staff and asking a junior engineer to open a new office, I suspect the owner is hoping to either fake it until he makes it or playing other games. Personally I'd run bc this is likely to leave a big black mark on your resume.

 

[LittleInch]

You have several very large hurdles to overcome to make this a success.

In no particular order:

Selling and doing this as a one man band effectively is next to impossible. as soon as you win one piece of work, you're not doing BD or responding to bids

Selling the services of the 35 might be possible but you really need some good back up to address bids and proposals.

Why would anyone choose your unknown company over the established players in a particular market? Without some sort of specialist engineering or capability you will find it very hard to get a foot hold.

As others have said, the age / experience thing is a major no no for most parties. They simply won't believe you can do the work.

Even getting to know who the important people are in any of the places is a struggle, far less getting them to meet you for more than a few minutes.

but if you afford the mental battles of trying your best but not getting anywhere for 6 months then you might win the lottery and somehow get a good well paying project, or bid horribly low and nearly bankrupt the company. But constant push backs and defeats can drain the most enthusiastic so beware of this.

I can see the bright light, but this is 99% the oncoming train. IMHO.

Remember - More details = better answers
Also: If you get a response it's polite to respond to it.

 

[DominicLee]

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[IRstuff]

Managing both the business development (BD) side and the project execution simultaneously can be overwhelming.

Beyond the overwhelming part, it requires some level of compartmentalization, since "selling" often requires taking risks that "engineering" would abhor.

TTFN (ta ta for now)
I can do absolutely anything. I'm an expert!

https://www.youtube.com/watch?v=BKorP55Aqvg

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