Engineers often begin their career working for someone else in a large company which is a great way to learn the ropes of this challenging and varied industry. However, it’s an engineer’s nature to be creative and innovative, so it’s no surprise that many engineers eventually decide to strike out on their own on a freelance or consultancy basis. Starting your own engineering business can be a daunting prospect, but it’s also an exciting and liberating time in your career. There will be times when you wonder why you left the security of a job in someone else’s engineering firm when you’re worried about profits or payroll. However, these times are outweighed by the satisfaction, pride and motivation which comes from building a successful business from scratch.
Why Start Your Own Business?
Be Your Own Boss
One of the biggest motivations for people starting their own business is that they get to be their own boss. You have nobody else telling you what to do (apart from clients and customers) or when to do it. On the other hand, this comes with a lot of responsibility and pressure as you’re responsible for every success and failure.
Make More Money
Business owners make more money than employees or managers, but this is because they are taking a big financial risk. Bankruptcy is a real possibility, and you need to be prepared for some hard times in the early years at least as you work towards turning a profit.
Build a Legacy
A successful business can continue long after you retire, and could you could even pass ownership on to the next generation to make your mark on the engineering industry in the long term.
Before You Start Your Business
Many entrepreneurs relish the prospect of a challenge,and there is no greater feeling than overcoming obstacles to achieve the success you’ve been dreaming of. However, you need to remember that being a great engineer does not automatically mean you’ll be a great business owner. You need to have the engineering qualifications and relevant experience for customers and clients to trust your company, but that’s only part of the battle.
There is so much to running a business to understand including how you’re going to attract customers and how much you’ll charge for your product or services. Is there a gap in the market for your business? Do you have the money to get the business up and running? You need to consider startup costs for premises, tools, machinery, stationery, office infrastructure, workshops, and other facilities as well as ongoing business costs like utilities, e.g., water, gas, electricity, internet, phone costs, cleaning services. Many entrepreneurs turn to banks for business loans to kickstart their venture.
Financial management is crucial in business as is having a detailed business plan in place from the outset. If you think that you are lacking in these areas, then you may want to consider some training before you make the leap from employment to entrepreneurship. You could take a course in project management or an online masters in engineering management that you can study for while you work.
How to Make Your Business a Success
When you start your business, you’ll be responsible for a variety of roles in your company including operations, people management,finances, marketing, product development,and sales. These aren’t things you learn while studying engineering and, unless you’re planning on studying business management, you’ll be learning these skills on the job.
Every entrepreneur needs to learn how to delegate as no one person can do everything without letting standards slip somewhere. You may be tempted to try and do as much as you can yourself to save money or because you want something done in a very specific way, but this isn’t a long-term strategy. You need to accept your own strengths and weaknesses and make sure you bring others in to cover the areas where you lack skills.
When you have recruited the right team, you’ll need to ensure that they remain motivated and productive. Managing a team of people is not an easy thing to do,and it’s likely you’ll make some mistakes, but that’s how great leaders are made.
Sales, Marketing and Networking
Finding customers for a new business can be a challenge,to say the least. If you’re currently working for a company, you’ll be used to having people around you all the time who are interested in your ideas and designs. When you start your own business, you have to go out and find these people for yourself.
It’s likely that you’ll rely on word of mouth and recommendation in the early days. Networking and attending engineering trade shows are a great way to get the word out about your business. There are also some companies which specialize in lead generation which can put you in touch with your ideal customers.
It’s important that you work out what type of customers you want and the ones you don’t as you can’t afford to be wasting time or money on the wrong projects. If you do meet potential clients at networking events or trade shows, make sure you have business cards or promotional literature to leave with them and always follow up with an email after the event.
Preparing quotes in the engineering industry can be challenging as the parameters, costs,and timeline of a project can change as it progresses. You may want to operate a ‘cost-plus’ quoting model which means you quote the price you expect to charge but leave some leeway for unexpected costs which you can discuss with the client as and when they arise.
If costs are fixed initially but then overrun, you have no incentive to finish the job. When costs are fixed at the start and later overrun, the business then has no incentive to keep working.A ‘cost-plus model’ means that a project has more flexibility for both you and the customer. You can estimate the cost of materials at the outset, but always make it clear to the customer that these may change.