Self-employed contract design

[hansel]

Hi all,

I've recently left a company where I was working as a design engineer. Shortly before I left the company landed a big contract in the department I was working in. My old boss had a meeting with me on my last day and offered me contract work (probably design for the mentioned project) after I took up my new position.

Has anyone had experience working for an ex-employer as a contractor and if so would you recommend it?
Also, as I've never worked as a contractor before are there many issues I should be especially aware of i.e. do I have to go over my ex-bosses head and deal with his customer for design specifications etc.?

Any advice would be appreciated.

Cheers.

 

[zdas04]

hansel,
You didn't say where you are. The requirements for setting up an engineering consulting business vary widely from country to country and state to state within a country. Advice from New Mexico in the U.S. could easily be 100% incorrect for a consultancy in Moscow or Beijing (or London or Texas for that matter). Getting set up requires a review of the local laws, determining insurance levels, and deciding business structure in any jurisdiction, but jurisdiction will have a major influence on each decision.

As to working for your old company, most of us have done it. The big exception is when you leave in less than amicable conditions (if you walk out the door stealing a laptop while screaming that "all these $1$^@5#$^@5^ can go @$#^%@%$ themselves" and threatening physical violence then don't expect lucrative contracts in the future). If you leave on adult terms, then the biggest issue is making sure that you realize you no longer work there and you can't make decisions that bind the old company. If you get that clear in your mind the those sorts of contracts can make a lot of sense.

David Simpson, PE
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

 

[drawoh]

hansel,

Is this contract a part-time job in addition to your new full-time job? Are you going to use your own computer and software at home, or will you use your new employer's computer and software? Do you have a realistic idea of how long it will take to do your job? Do you have that much time available?

Why do they want you to do this? Are you the only one who knows how? Is there some weird office politics going on that precludes the in-house designers from doing it?

I have seen absolutely horrible work done by part-time contractors. Outside contractors have poor communications with the office, especially if the job is being fed out by a control freak who does not want to work with the in-house department for some reason. The contractors are not necessarily good at the job. You may not have time to do it properly.

If (or when) everything screws up, will your old boss take responsibility for it, or will everybody blame you?

--
JHG

 

[dogtop]

hansel,

As already mentioned, the business requirements depend heavily on the location. If you were a resident of the State of New Jersey in the USA, the checklist to establish a business is here:

http://www.nj.gov/njbusiness/documents/check_list.pdf.

You need to check this the local tax, legal, health, and other authorities.

HTH

 

[hansel]

Hi guys,
Thanks for the info.

@zdaso4: I'm in Ireland. We parted company on great terms (nothing quite as dramatic as you speculated!! haha) so there's no issue there. Your other point about not having the same freedom because I don't work there was my main concern. Am I still expect to travel to their customers site for design reviews and also would it be my responsibility to contact the customer for info. pertinent to the project or is that my old companies responibilty?
I imagine most of these things are on a case by case basis and are subject to the relationship between the contractor and the company but I wanted to gauge the amount of hassle I'd be letting myself in for before I commit to anything.

@drawoh: This is part-time work in addition to my new job at a new company. I'm not setup with a CAD package to complete the job, I haven't looked into that yet. I'm sure my old boss would allow to work on-site in the evenings and at the weekends until this job is completed as it would be mutually beneficial. I was half-way through this job when I left through working on the quote before the PO arrived so it makes sense to take on this contract with a "suck-it-and-see" approach. Solid Edge is the package that is used, would it be ridiculously expensive to get a private seat to work from home? If I was handed a URS (User Requirement Specification) I think I could finish this job in about 40 hours, that's another one of my concerns, details have been very vague from the customer until now. Do you have any experience pricing these jobs, what would be a ballpark realistic hourly rate? I was with the company just over 3 and a half years and had been the lead designer in the department before I left.
The reason it hasn't been handed to some of the other designers is that they don't have capacity, waiting on them will push out the delivery dates considerably. It is possible for someone else to complete the job if they had capacity but it would take at lease a week to get up to speed on the project before they could move forward with it.

Thanks also to dogtop, useful info but as I'm in Ireland I'll have to look at our own laws for setting up a business. Cheers all the same.

Hansel.

P.S. I received an email to move this thread to "Engineering Business Practices" forum so I'm going to see can I copy to that forum without losing your threads. If any of you reply here I'll see it also. Thanks again.

 

[zdas04]

hansel,
Moving threads is not easy, management and the system administrators have problems accomplishing it. You can hit the Red Flag button on your first post and ask them if they'll do it. They may or may not be able to. Some people have a problem with threads in the "wrong" place. Putting it in the right place gets you to a more focused community (the majority of small engineering firms seem to be Civil/Structural and there are a lot of those guys in that forum that are not here).

The "no longer an employee" thing is pretty subtle. When I traveled with my former employer (for example) while employed, I used their credit card and their travel agency. When I traveled for them after retirement I paid all the travel costs up front and they reimbursed the costs the following month. Took the same flights and stayed in the same hotels. Before retiring I could commit the company to deals up to my delegation of authority. After retiring I couldn't commit them to anything. Same meetings, same discussions, but now at the end I present the deal to the company for approval by someone with a delegation of authority. Often a rubber stamp, but an important one.

David Simpson, PE
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

 

[GregLocock]

Make sure that your new employer (if any) is happy for you to do the job as well.

As to rates, figure on 3 times your apparent hourly rate when you worked there... but don't be surprised if they balk at that.

Cheers

Greg Locock


New here? Try reading these, they might help FAQ731-376

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

 

[tbuelna]

I don't know how things work in Ireland, but I have spent most of my engineering career working on a contract basis in the US. Being a self-employed contract engineer in the US is not a simple thing. The income tax issues alone are a huge headache

Most importantly, before signing a contract/PO make sure you understand what your financial and legal obligations will be to fulfill the terms of the contract. Your ex-employer is probably happy to hire you back on a contract basis after laying you off, since they will be relieved of paying the costs for your unemployment benefits and health insurance. Make sure you drive a hard bargain with your employment contract. Demand a guaranteed contract for a specified amount.

 

[GregLocock]

...and make sure you have no liability for the ensuing design.

Cheers

Greg Locock


New here? Try reading these, they might help FAQ731-376

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

 

[hansel]

Thanks guy, much appreciated.