What is required to operate as an independent consultant? 10

[livewire9]

I've been doing a little work on the side recently and next year will have worked for others (owners/managers) for 15 years. I feel pretty good about my skill set and potential as a business owner. I'm thinking of making a leap of faith and try to develop my own consulting practice.

I have already filed a PLLC and have it Registered as an Engineering Firm with the State Board. What more is required to operate legally as a Structural Engineer? Insurance? Anything more?

 

[JStephen]

Insurance is prudent, but I don't think is required to operate, either.
In my case, the computer, printer/copier, software, and many of the books I use everyday are my employers, so I'd have to accumulate some stuff to work on my own.
A bigger part is how your contacts work, what work is available to you, etc.

 

[TheTick]

Customers. You need customers.

 

[IRstuff]

If you're doing structural engineering, then some sort of E&O would seem to be appropriate, not to mention insurance coverage for your previous work.

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

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

faq731-376 forum1529 Entire Forum list

http://www.eng-tips.com/forumlist.cfm

 

[Ron247]

You are asking about items you must have to start an engineering business. Other than the engineering licenses and Certificate of Authorization, you may have some other state/local requirements. I lived in a town once that you had to pay them $21 per engineer per year for you business. That is just an example. Also, you may have just business requirements that are not related to engineering. Again, I have to pay a small amount each year for business equipment (computers, office furniture etc.) that I bought years ago. I pay a local tax each year for old equipment I still use.

I went into business overnight due to a fallout with partners in a non-structural venture. Anytime someone questions me about starting an engineering business and leaving their current engineering employer I point out the following things I had to do on the run but would have been much done better at night while still collecting a pay check from my current employer. You have a lot of items to decide that you have never thought of but will need to be done. My first project took me 1.5 hours to do. It took me another 2 hours to design, create and complete the invoice. I could not bill the Client for that time and should have been trying to get more customers with that time. The way you work currently in your status of "doing a few side jobs recently" may not work well in the full-blown business.

[ul]
[li]What is your job number system? We all have different opinions of that. I needed that for the invoice. Because I do so many different things than just structural engineering, the first letter of my job number tells me what kind of job it is.[/li]
[li]How will you store projects on the computer. Again, we all have different opinions. Once size does not fit all. Some companies keep all drawings in one place on the computer while I keep everything for the project in one subdirectory for that project only. You have to create a naming and storing system you will use to store legally required information. I started in the days that filenames etc. were limited to 8 characters. That made it very hard. Now you can at least use more characters including a space. Depending on the type of work you do (DoD for example) you may have to limit access to some files on the computer.[/li]
[li]Office supplies. Now that one hit me fast. Got through doing something and needed a paper clip I did not own. Go to Office Depot and $200 later (1995 money) I had the tape, scissors, stapler, hole punch, magnifying glass etc. that I took for granted at the other job. We had some of these elsewhere in the house, but I needed them at my desk.[/li]
[li]How will you store physical paperwork it the office such as drawings, printed information a client handed you. I am the typical desk slob that has paperwork about 1' thick in multiple areas. I had to use different color folders for Client information, project information and different equipment I had. Reason for that was when I needed a project file, it really sucked to look at every folder laying in my 3D version of an M.C. Escher type office. When I went to colored folders, now I only had to look for the yellow ones.[/li]
[/ul]

These are just some examples, but you need to get all this decided and in place before you leave where you are. It really sucks to implement some "engineering office" system and then have to redesign it 2 months or a year later. Code books, reference books and software were the items that really hit the wallet. I really cuss now when they make minor updates to codes.

 

[livewire9]

Hey, guys. I really appreciate all of the feedback. I think it really comes down to getting clientele.

Ron247, your post was great! You are a wise man. I've hung on for the last 5 years working for an abusive boss in order to not let my family down. But I can't do it forever. I've got the blessing of my family now so I need to take a chance.

While I'm trying to make it happen I actually want to work in construction (concrete especially) just to do it while I'm still young enough. Any other structural guys have that desire? I wonder what extra value I could bring to a construction crew with my education and design skills..

 

[msquared48]

RETURN clientele, and common sense.

Mike McCann, PE, SE (WA, HI)

 

[Ron247]

livewire9:
Engineering skills are highly needed in most construction sectors but they are typically not the design skills such as calculating foundation sizes or column reinforcing. They are generally the skills like project management ability, estimating, schedules and knowing what a piece of equipment can do. Most concrete contractors have the engineering drawings of what to build, it is getting the project built on time and under budget they have to do. You can occasionally do some value engineering but it is not the main diet.

One of my best friends I graduated with was already very familiar with concrete construction when we graduated college. He pretty much went straight into that for a business with his father. He never got his PE license and I think he never passed the EIT. As far as I can tell, he has made way more money than any of the engineers I know. I think he prints the stuff. What he was really good at was not leaving any money on the bid table, maximizing a work day, gamesmanship and estimating. He is super good at estimating concrete work. One ability he has is that he knows more about what his competition can do than they do. I remember in the early years he had project with a normal 71k of profit. He added 50k to that because he knew the 2 most likely competitors were working some poorly paying projects but could not handle any more work for several weeks. He knew before they did about this more attractive project and baited them both into bidding less desirable stuff to tie up their resources. They both turned in a "complimentary bid" as he figured they would and he got the project. Like I said, gamesmanship and keeping his ear to the ground. He got the profit of another job without doing any work. I was helping that night by sizing some PEMB footings for him because the Architect left the footing sizes to the contractor. Although it did take an engineer to help bid the job, the big money was in the extra $50k.

Good Luck.

 

[jmec87]

Your state's engineering board might have a guidance document available for you. APEGA (Alberta, Canada) has a document titled "Guideline of Considerations for Establishing a Consulting Practice" available at the link below. It was last revised in 2005 and obviously won't be tailored to your state's jurisdictional requirements, but it still might give you some good ideas.

https://www.apega.ca/docs/default-source/pdfs/consulting.pdf

 

[SlideRuleEra]

I actually want to work in construction (concrete especially)... I wonder what extra value I could bring to a construction crew with my education and design skills...

For residential and some buildings, probably not much.

For heavy construction, such as industry and infrastructure, quite a lot... if you are willing to adapt your skills as needed.

First, forget about distinctions between engineering disciplines... they (structural, civil & geotechnical) all blend together. Besides, you most likely will be practicing my yourself... no colleagues to call on. But you do want input from project superintendents and other coworkers... however, while you consider their contributions, it is up to you to make technical decisions, not just "do what they want".

Second, don't rely on "codes" for answers. Ability to intelligently use first principles is more important.

Third, plan on doing a lot of engineering "backwards".
For example, the question is how can the certain size beam that I (contractor) have on hand be made to work for a temporary application?
NOT: What size beam (to be purchased) is needed for the temporary application?

Some examples of potential contributions:
[ul]
[li]Concrete form design - say, wood (carpenters can build it) or steel (may have to rent or purchase).[/li]
[/ul]

[ul]
[li]Falsework design for elevated concrete structures, including deflection calculations to allow the permanent structure to meet requirements.[/li]
[/ul]

[ul]
[li]Rebar support - chairs are not made to support a heavy mat of #18 bars, and the top mat of a thick slab may require that sizeable structural steel members be used.[/li]
[/ul]

[ul]
[li]Temporary access to work areas - roadways, trestles (including piling), platforms, scaffolds, etc.[/li]
[/ul]

[ul]
[li]Shoring for foundation excavations, possibly including cofferdam design.[/li]
[/ul]

This type work can be very interesting, if you are comfortable with one-of-a-kind problems.

http://www.SlideRuleEra.net

 

[glass99]

things not mentioned so far:
1. health insurance - I recommend a PEO such as Justworks.
2. software and references - this is a ~$10k investment depending on what you need
3. a payroll service (even if its just you because all the weird little taxes are exhausting)
4. general liability, professional liability, and auto insurance. Also workers comp if you have staff.
5. an accountant and maybe a bookkeeper for extra credit
6. a logo
7. electronic infrastructure, including cloud based file storage (dropbox, egnyte etc), a domain, and a email address
8. a good workspace or office
9. a place to have meetings, ideally access to a conference room
10. financing to cover you while clients (slowly) pay their bills
11. a system for tracking money such as quickbooks or your own spreadsheets

 

[livewire9]

Thanks, gents, for all of the sage advice and encouragement.

It all sounds somewhat intimidating but you know what they say.. "without risk there is no reward." Probably a few others could be applied as well.

Merry Christmas, all!!

 

[livewire9]

I would like to tease this out a little more. All the advice from guys who've taken this step is much appreciated.

So, without question, clientele is the most crucial piece to begin assembling the puzzle of consulting self-sufficiency. Is a shared office space or the like also an initial necessity OR should one first start working out of their home?

And here's a random peanut to throw at the gallery: Has anyone ever thought of customizing a Sprinter van to operate out of as a mobile office? One could possibly be a rapid response engineer-on-the-spot with a toy like that right? Am I the first to think of this?

 

[Ingenuity]

Re the Sprinter: The 'Lincoln Lawyer' Link equivalent for an engineer?

If you do a bunch of field work (especially forensics, and have testing equipment etc) then it does actually make sense. I often set up a mobile desk (folding chair, table, laptop, camera, GPR etc) on a project site and punch out the rough-in of a assessment/report, and interact with the field techs directly to check and photograph conditions. Saves the 'back-and-forth' that otherwise happens.

If you are 99% office-based, then a mobile solution does not really make much sense.

 

[phamENG]

I don't have my own business, but I am interested in this topic for future reference (never too early to dream!).

This is my untested thought on office space:

Having an office generally lends a more professional appearance than working from home.

a) It allows you to put your address on letter head and other company documents without having a PO Box and without telling your clients where you live.​

b) Gives you a place to invite clients for meetings or discussions without having to worry whether or not you emptied the diaper pale or cleaned the cat's litter pan.​

c) Gives you a place to show off you material success.​

Now whether or not that level of outward professionalism is warranted would depend on your clientele. Are you working exclusively with architects who either have their own offices where you can meet or are casually working from home, too, and don't mind meeting at one of your houses or a coffee shop? Then you probably don't need it. But if you're working directly with end users, some people (especially those not familiar with the industry) may look down on somebody who doesn't have an office. Being able to afford a well appointed office is a sign of prestige and success. If you haven't attained a level of success that lets you afford that, why should they risk giving you their business?

As for the van, I hadn't taken it that far since I don't use a lot of equipment. Collapsible ladders, laptops, portable printers, etc. make for a pretty compact portable kit. You may be better off getting a compact pickup or SUV that gets better fuel economy. Though, I must say, the idea of opening up the back to a wood paneled interior, executive desk, and bankers lamp with a leather swivel chair is pretty alluring...

 

[glass99]

As a solo practitioner I was never able to work from home because of the distractions, but some people like being close to family and the zero commute etc. Consulting engineers don't host a lot of meetings, though it does happen from time to time. I share space because I split not just the rent but the hassle of figuring out internet and leases etc, plus I get access to a conference room. WeWork gives you the same functionality but definitely has a genericness which is lame.

 

[livewire9]

Perfect, glass99!! Like I said in my original post I've done a little side work here and there in the last year. But today I just connected with a food franchise owner having issues with their leased building due to poor foundation construction. I think this job could go to litigation after I provide an structural report.

There is a unique, shared office space opening up one block down from the office where I've slaved for a total jerk for 5 years now. I think I'm ready to put in my 2 weeks

 

[NorthCivil]

The advent of the co-working space is perfect for solo practitioners keen to launch. I know a young company that did a one year stint at a co-working space before they made the leap to their own leased digs.

I'm in a HCOL area and my personal rented apartment doesnt have enough room to set up an office. It would be cheaper for me to rent a co-working desk than to rent a bigger apartment that could accomodate a home office.

What are your thoughts on bringing clients to your house vs a coworking space? what is more professional?

 

[glass99]

well obviously co-working is much better for meetings, especially if you get a conference room. Bear in mind that the wework desks are really small.

livewire: one small thing to bear in mind is that if you are only a block away you will be seeing your old boss on the street a bit. And congrats on the new client!

 

[oldestguy]

A question. Suppose you find the level of work is so slim (likely) that you have to rely o savings. Be prepared for some little or no income periods. Some have said be so prepared with savings that it will take you though at least one year.