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Posted on: September 3, 2020 by Huntersure
For engineers, working for themselves instead of having to answer to others is a more attractive venture. From setting their hours to being in more control of their projects, engineers venturing out on their own presents many benefits. But like any personal business venture, there are still some important items to be aware of. Here’s a look at how to start an engineering firm, including the benefits and drawbacks that come with it.
The most obvious reason why someone would want to start their engineering firm is full autonomy; they get to be the boss. It’s also a great opportunity to make money, much more than they’ll make as a manager, especially in merging technology and industries. For instance, with the spread of COVID-19, many different engineering fields are finding how they can help with solutions. However, most companies fail within a few years, and an engineer running their own firm could end up with damaged prospects.
What’s more, engineers who start a firm get all the responsibility, accountability, and pressure of being in charge and making decisions. Plus, if something goes wrong, they’re on the hook for any mistakes. While there may be nobody above them, they’re responsible for their employees’ livelihoods and the future of the company.
While an engineer is going over their business plan and materials and hiring contractors, they should also consider protecting their new firm from the beginning. This is possible with effective engineer professional liability coverage that provides much-needed protection from potential legal, financial, and reputational damage.
Even the most prominent engineering firms have run into trouble over time with claims of negligence. Working with engineer professional liability insurance provides both defense protection in the event of professional negligence allegations and supplemental payments and coverage designed to assist clients in having to go through a claim.
An engineer’s value proposition tells their clients what they can expect when they work with a firm. It also defines the company’s values, which the engineer uses in their branding efforts. It’s crucial that they understand their value proposition because it is their key to attracting customers. An engineer needs to work out what you have to offer to the market and make sure there is a firm’s niche.
Engineering takes in all kinds of discipline. For instance, mechanical engineers build things for their clients. Civil engineers focus their efforts on improving the environment, whereas electrical engineers focus their efforts on the safety and quality of electronic products.
Each type of engineer needs their own tools to do their jobs accurately and adequately. An engineering leader will likely see projects through from design through to prototyping and completion. Every engineering consulting firm startup needs to invest in the tools, materials, and software it needs to do its job well and extensively research and network.
An engineering consulting business plan is a detailed plan of what a business does and how it plans to achieve its goals. Engineers should look at what they have and how this helps to achieve their own goals as a business owner. It’s important to be realistic about their starting point as well as the level of competition in the market.
In creating a business plan, an engineer should consider their finances and understand how much they need to invest in the company to get it going. Furthermore, it’s important to not be liberal in terms of their projected earnings. This may inflate the business expectations to unrealistic proportions.
It’s never too early to make connections with engineering industry influencers. An engineer starting their firm can start building their network from the moment they decide to begin their business.
One way this can be done is by attending industry networking events. But with the new normal of COVID-19 making an impact on how we do business and socialize, networking events may have to be digital for the time being. However, there are plenty of options for engineers to make industry connections through sites like LinkedIn, a great way to share ideas and connect with key influencers.
A tough task for a new engineering firm is getting its quotes right. This shouldn’t be a surprise, however. After all, the firm is new to the industry and hasn’t worked with clients directly before. So many different factors come into play and engineers need to understand what others in the industry are charging.
An engineer should also take the client’s budget into account as sometimes a client who can’t spend much could clear a way to other job opportunities. Ultimately, the best thing to do is ask what others in the industry have completed. This is where networking efforts and knowledge of the industry help.
Huntersure LLC is a full-service Managing General Agency that has provided insurance program administration for professional liability products to our partners across the United States since 2007. We specialize in providing insurance solutions for businesses of all sizes. Our program features can cover small firms (grossing $2.5 million annually) to large corporations (grossing $25 million annually or more). We make doing business with us easy with our breadth and depth of knowledge of E&O insurance, our proprietary underwriting system that allows for responsive quoting, binding and policy issuance and tailored products to meet the needs of your insureds. Give us a call at (855) 585-6255 to learn more.
Posted in: Architects/ Engineers