Opportunity to go solo, unprepared though 8

[ThrowAwayAccount]

Throwaway account but I'm a regular poster on eng-tips. The summary of the below is I'm looking to go solo but business opportunities are forcing me to accelerate my plans before I'm prepared.

For the past few years I've been slowly lining up things to go solo with a sustainable business plan. I was expecting to implement this sometime over the next few years. I currently work as the sole engineer for a construction company doing specialty engineering (but nothing so special it can't be farmed out to someone other than myself).

A summary of my business plan: my current specialized structural engineering work is overloading my schedule and it has some inefficiencies and other items I've identified I could solve. I intend to take my current work and move into a sole-proprietor office from home and focus on reducing the overhead for my engineering. I would also focus my efforts into designing tools to more efficiently tackle the regular tasks at my work. In addition, I plan on getting a collaborative team of other engineers that I can bring in as pinch hitters to handle any of my schedule overruns. The end goal is to charge hourly rates as the rough equivalent of my current yearly work salary; thus my current employers don't see a significant increase in using me for engineering and I have no change in my yearly income as I grow my business. A win-win for both parties.

From there, I would focus on reducing the work hours required to complete tasks allowing me to do the same work in less time. This would both increase value for my current employer as I could adapt rapidly to rush projects, and I could use the free time for other consulting jobs. I would benefit my current employer by providing flexible engineering costs (low workload reduces their costs; high workload increases their costs but is less than hiring a second staff engineer). I would also start looking into engineering other items for them beyond my usual tasks (things they've asked me to do if I had free time; fall protection systems, maintenance access systems, etc.) and then selling them the designed systems.

The final goal would be to transfer into a typical structural consulting firm. I would arrange to not provide my engineering to similar companies that compete with my current for a period of time and they would use me exclusively for the same period. Afterwards, I could then market myself out to other similar companies and expand my business with an increasing diversity of customers and work.

Unfortunately, things have picked up faster than I expected. A drafter and a few other support personnel have recently moved on in the past week and we're now understaffed. This crunch in all departments is being felt already and the owners are looking at ways to bring in more personal. It's currently appearing that my employer is also going to look into hiring on another engineer to take some of my workload which obviously hurts my plan as I'll no longer be the exclusive provider for engineering services for my employer.

I read a lot of similar posts others have made on eng-tips and understand what is recommended to start. I'm currently in a good place financially but do not have as much savings as I would like to go solo. Our family currently also has no other income other than my own (wife is an aspiring writer finishing her first novel). I also have not developed a full business plan to work out things like hourly rates, insurance, office overhead, taxes, accounting, and so on. In short, I have a napkin business plan and that's it.

Given what I've wrote above; do you feel I should go to my bosses now and propose I start moving toward this and let them know my plans before I'm ready? Do you think my plan makes sense? Any pitfalls I should watch for?

 

[oldestguy]

For one thing keep this in mind and don't say no one ever told you. PRIDE GOETH BEFORE A FALL.. You had better go over all the possibilities that can go wrong. There are MANY. One of them is "Getting new clients is tough, takes a lot of time and expense". Lastly getting insurance is not easy and likely is expensive for a beginning soloist. DOUBLE LASTLY: PLAN ON MANY MORE THAN 40 HOUR WORK WEEKS FOR A YEAR OR TWO AT THE LEAST. Family life will be greatly affected when every evening, and Saturdays and Sundays are just two more days to work.

 

[oldestguy]

OG again: I re-read some of your comments. One thing among several bothers me. Why are you posting under a different name than before? Something to hide??? Also, what's the rush? Take insurance, something you fail to mention. That should be your prime mover now. Having or not having professional liability insurance, for one thing, may shy away good clients, considering you a risk, among several factors. Remember, every time there is a claim, say with a job you just barely are in involved with, you and everyone else associated with that job will be brought in to the claim. All of your assets might be lost. So diving in in a hurry, remember the slogan in my first post. Rushing can be dangerous. Not now knowing all the insurance factors tells me I wouldn't hire you as a draftsman.

Why not do a questionnaire here? Ask us how many years experience (at the kind of work you do)did you have before going on your own? In my case it was 26, all in responsible positions, even a part owner in consulting firm. Started with BS and MS totaling 7 before the first job.

 

[Lomarandil]

I plan on getting a collaborative team of other engineers that I can bring in as pinch hitters to handle any of my schedule overruns.

If this is who I think it is... we should chat.

You're really only betting the farm by starting your business now - that's where your true risk lies. You assume you are predicting the market accurately some time down the road, but in reality, I feel like you are trying to justify to yourself that there is good reason to go into this venture without all the information because "the timing just feels right." Who knows, in 4 years, the timing may be better....and you will likely be much better prepared.

Based on what you've laid out, if we were talking about this over a beer, I'd look you dead in the eyes and tell you that you're not ready yet and not to risk your family's livelihood. All the same, I wish you the best no matter what decision you make.

I think this is about where I land. If I was in your shoes and did this today, the first thing I'd do would be working hard to diversify from one client to 2-3 construction companies (hopefully you already have a good contacts with other local contractors). That's the biggest risk to me. But that's going to take a lot of time and effort (on top of whatever production you're expecting, on top of all the legwork to open a company).

DOUBLE LASTLY: PLAN ON MANY MORE THAN 40 HOUR WORK WEEKS FOR A YEAR OR TWO AT THE LEAST. Family life will be greatly affected when every evening, and Saturdays and Sundays are just two more days to work.

Agreed, I wouldn't even consider this without complete buy-in from my wife (and kids) for 60-80 hour weeks over the next two years. Those two years may be worth it to meet your family goals in the long run, but they're going to hurt.



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The name is a long story -- just call me Lo.

 

[12345abc6ttyui67]

Don't think I've seen this mentioned.

A major problem I would have as your employer is that I effectively 'lose control' over you once you leave. Sure, maybe we have some agreement signed or whatever, but hey, I've seen plenty of those thrown in the trash.

If I was your employer I'd be worried you get lured by some other juicy big fish and stop delivering the work I need you to - hurting my business. Because you are not on my staff anymore I am effectively powerless to do anything about it.

For that reason I'd get someone in as staff to replace you as soon as I could. I'd even pay more than you might be charging as solo, to ensure I keep control of something critical to my business' delivery.

 

[ThrowAwayAccount]

It's worth pointing out that I'm not planning on just giving my 2 week notice and running out the door with no plan. What I'm proposing is getting my work onboard right now BEFORE I'm setup and have run the numbers, and then transitioning into it that plan (no safety net). The alternative is getting setup later on such that I don't need my work to be on board, which is what it sounds like you all recommend (with safety net). I think most people commenting understand what I'm proposing but want to make sure.

Lastly getting insurance is not easy and likely is expensive for a beginning soloist

Not now knowing all the insurance factors tells me I wouldn't hire you as a draftsman.

I do have a rough idea on insurance prices, software, and a few other other big ticket items. I have done some legwork on that end. I have also spent a fair bit of time looking at insurance for small firms, how risky my work is, and so on. This is probably the item I've done the most work on, as you're right it's a big ticket item.

PLAN ON MANY MORE THAN 40 HOUR WORK WEEKS FOR A YEAR OR TWO AT THE LEAST

Agreed, I wouldn't even consider this without complete buy-in from my wife (and kids) for 60-80 hour weeks over the next two years.

I already work 50+ hours and don't mind more. I don't mind working late at all. This is actually one of the efficiency issues I identified, if I get in a groove and am banging out engineering until 9 pm I then have to deal with being tired getting up at 7 am to avoid being "late" for work. If I could sleep in and keep non-standard hours to recover my sleep then my efficiency would increase getting more done in less time.

The second part for me jumping on this is we don't have kids (yet). I fully anticipate some weeks working 100% of the time and the wife is onboard with this, but not if we have a kid.

Why are you posting under a different name than before? Something to hide???

It seemed prudent; but I wouldn't have posted this at all if I felt it was truly a risk. You're probably right I could have kept it under my normal username.

A major problem I would have as your employer is that I effectively 'lose control' over you once you leave.

You voiced one of my biggest concerns, I have no good answer yet for this. Part of the reason for my rush was because I can see them doing exactly this; getting someone in to replace me. They've already begun the process by getting an EIT in to support me so as that person grows in experience I'll be much easier to replace in a few years vs right now.

Given all the comments, I still agree that rushing isn't worth it. Plus, maybe that's an opportunity if they have someone who is already there but not trained yet.

Perhaps there's another option I hadn't considered. I could propose to add onto my employers existing company rather than go solo. Essentially creating a partnered company that expands my current employers business into more traditional engineering. I've of course not looked into this but I assume there's some vehicle to make this legally separate so if it failed it doesn't affect my employer but would also allow it to share the features of the parent company (insurance, billing, etc.). I could still do my normal work but would also be free to expand to other areas that are not the normal focus of the company. This obviously means my profits are less as I'd have to give the parent company some, but also eliminates much of the risk.

Regardless, you've hit the nail on the head. I need to make sure I can either deal with being replaced or find a way to ensure it wont happen.

If this is who I think it is... we should chat.

You're on engineer boards under the same name, right? I'll have my people contact your people.

 

[DTGT2002]

If you want to touch base with some folks who have done what you are talking about (some not by choice) and are a member of ACI, I'm the only Toon in the directory.

 

[Lomarandil]

It seemed prudent; but I wouldn't have posted this at all if I felt it was truly a risk. You're probably right I could have kept it under my normal username.

Better this way... I just "busted" a colleague who thought he was posting on a private facebook page about a career change. The internet is never as anonymous as we like to think it is.

You're on engineer boards under the same name, right? I'll have my people contact your people.

Yep, I'm highly unoriginal that way.

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The name is a long story -- just call me Lo.

 

[ThrowAwayAccount]

If you want to touch base with some folks who have done what you are talking about (some not by choice) and are a member of ACI, I'm the only Toon in the directory.

I believe my employer has an ACI membership for some of the work we do, but I am not personally a member. I'll see about getting access to the directory.

 

[oldestguy]

Mr. "Throwaway": The replies that come along here don't seem to have any beneficial effect. Not one really agrees that this is a right move for a minimally experienced engineer. One thing this post and the comments sure are taking a lot of space which would normally be of some use for the original poster. In this case we are wasting our time and WEB site space trying to be of some help or influence.

 

[Ron]

TAA....you're overthinking this! You are planning efficiencies for work you don't have. Get the work first, then figure out how to get it done, including those efficiencies.

I have started and run engineering firms twice. The first time I had a large airport runway failure investigation involving litigation....the firm I worked for was not focused on forensics or litigation projects so I left and took the project with me with their blessing. Used it as a launching pad for other work. Ran that business for 6 years then sold it and went to work for the company that bought me out....I hate managing a business so it worked well for me.

Fast forward 16 years.....got really tired of corporate structures and politics. I achieved very senior status and officer positions in two companies and just got tired of non-engineers dictating the company policies and trying to control everything at the gain of profit only and the detriment of technical quality and the engineers who produced it (side note....neither of those companies exists today in their previous form...they have been bought and sold several times).....started another business with a different approach....no employees and working as a consortium of competent engineers with whom I had worked for many years. They make more money and I make a good living.....but don't have the expense of large overhead or the headaches of managing people. We get work initially because of my reputation in engineering and the consortium members have now, after 14 years, developed their own following of clients. They could all go out and do this on their own, but working as a group, we have resources individuals don't have....like covering a project when the principal is not available or pitching in to do field work with projects on which they are not principal engineers....it has worked well and we enjoy what we do. We do no marketing or advertising, yet we have been continually busy for 14 years. Hopefully it will continue, but we don't worry much about that.

Do it and don't look back.

 

[Compositepro]

The consortium model works very well in many ways. It is easy to put together the right team for each project. If any member is a problem or not responsible they simply don't get chosen for future projects. It is much easier to keep overhead under control, and everyone participates in new business development.

 

[TheTick]

If you’re ready, you waited too long.

Ready! Fire! Aim!