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Hemi79

Do you charge per hour?

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I hope I can post this here. Didn't know exactly where. For a while now I've been helping a buddy with structural work. I didn't mind before, but now that my schedule is tight I feel like I need to ask for some money in return. How would you guys/gals go about it? My feeling is per the hour. Say $40/hour and depending on the job. I've never charged like this before, but I feel its getting out of hand and straight out asking for money I feel would set things right. 

Any ideas? 

Thanks, 

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I do consulting engineering on the side in addition to my full time job. But this is on a contract basis with actual engineering firms and my rate is $55/hr. I charge on 1/2 hour increments. Since this particular instance is for a friend of yours, I'm not sure how you want to structure the rate but that seems reasonable to me. You also might want to make him/her aware of your intent so both parties are in agreement. 

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More than reasonable.

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The amount is certianly more than reasonable.  A caveat would be that if you're going to stamp anything or if the calculations are submitted to any authority for review, you want to make sure you have insurance coverage in the event that something goes wrong and it gets traced back to your work.

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Thanks for the comments! It really helps. Im not sealing anything for him cause im not licensed yet and he is. However, i think that if i do seal it i would definitely give a higher rate. I dont design any different because i dont have a seal and who knows maybe i will in a few weeks. :-) 

Thanks again. 

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That is dirt cheap for engineering work. If you are providing a service you entitled to compensation for your time.

 

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Voomie, the rates aren't the same as what a major engineering firm charges their clients. An individual has no overhead costs to factor in. They are also providing services for a friend. You can't compare apples and oranges.

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14 hours ago, Voomie said:

That is dirt cheap for engineering work. 

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How so?

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Knowing what some firms charge, it will be hard to find rates that low.

 

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13 minutes ago, Voomie said:

Knowing what some firms charge, it will be hard to find rates that low.

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What you're forgetting is that also includes over-head for the firm. When I was in consulting, at a senior level, I would typically bill out at about $135/hr. But that wasn't actually "my rate". That is what the firm charged to the client. My true rate was typically around $50 - $55.

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I understand the overhead costs but the firm subcontracting the work is getting a nice margin on the work.

 

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I charge whatever going engineering rates are. 

Between $100-$150/hr depending on client, what I'm doing, etc.

I work out of my basement.  

If you never intend to go full time - not a big deal.  But once you go full-time and begin having overhead and need to raise rates accordingly - be prepared.

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You could install can lights in basements for more than 50 dollars an hour. You should sell your work for what it is worth. Your base salary at an employer is not what you get paid. Right off the bat you are compensated around 30% more in benefits. You as a small buisness will have overhead just as large if not larger as you will not have efficencys of scale that large firms enjoy. Ive been through the "I dont have overhead game" and went broke before I believed what people who ran sucesfull buisness were telling me. If its just for beer money it wont hurt you to give your time away for virtualy nothing. However, you would be undcutting the very industy you work in.

 

If you want to hear the long nuanced version of this point head over to electriciantalk forum.

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Can you anyone tell me how much the insurance costs for an engineer to do part-time consulting out of your basement. I wouldn't think anyone would accept a design or recommendations unless you could provide proof of liability insurance. I have a lot of residential building experience and when I get my PE I would like to start my own small business on the side designing joists and beams for residential contractors, maybe doing home inspections. I guess you want  to try to drum up some work first and then go buy the insurance so at least you know you could pay the premium and earn some money in the beginning, then hopefully you can get more customers.

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Watch out for the tax ramifications of the arrangement. As a sole proprietor, you are generally required to pay double social security, etc. Also keep in mind that unless you enroll yourself in workers comp, you will not be covered if you get injured. This is particularly important if you perform site visits or other services with higher risks. 

Also, once you are licensed, you will need to check with your state board regarding contract requirements. In many states, you are not allowed to provide engineering services without a written agreement and can potentially lose your license if a complaint is filed.

When it comes to liability/errors & omissions insurance, then many "spare bedroom outfits" are self-insured. If you chose to go that route, then you should carefully review what liability limits your agreement specify. $50,000 is a common limit. Do you have liquid assets in that amount, or would losing that kind of money be a financial burden? Depending upon what kind of work you do and the volume, insurance would typically cost a few thousand dollars per year for a low-volume company.  

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On 5/1/2017 at 5:28 PM, WE WERE THE MULVANEYS said:

Can you anyone tell me how much the insurance costs for an engineer to do part-time consulting out of your basement. I wouldn't think anyone would accept a design or recommendations unless you could provide proof of liability insurance. I have a lot of residential building experience and when I get my PE I would like to start my own small business on the side designing joists and beams for residential contractors, maybe doing home inspections. I guess you want  to try to drum up some work first and then go buy the insurance so at least you know you could pay the premium and earn some money in the beginning, then hopefully you can get more customers.

I'm an electrical engineer and I pay around $2200 for E&O and liability for a $1M/$2M policy.

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I was quoted $2500 for civil engineering, then I clarified I was structural and the price went up to $5000 for the first year. After that it may go up based on your billing. That was for $1M/$2M.

Our billing rates at the office vary between $130 and $175 and I charge my friends/family $100/hr for anything with liability. @Ultrafault has a good point. If people can find high quality engineering work for super low prices it not only undercuts your industry but they may not value your own personal time.

Edited by SE_FL

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Everybody brought up some really good points. Seals, liability, tax ramifications etc. Talk to your friend first. A short, open conversation can avoid a lot of misunderstandings later on. A few hundred bucks here and there is easy to come by, friends aren't. 

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It seems like people may be misunderstanding the original post.  While he is doing work for his friend he is not signing off on any work,  the person he does the work for is responsible.  What he is offering is design services like many people do on a daily basis for their employers.  The company may bill $150/hr but the employees doing the actual work only make a fraction of that. The OP is doing the same thing but on his own time at home.

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10 hours ago, SE_FL said:

I was quoted $2500 for civil engineering, then I clarified I was structural and the price went up to $5000 for the first year. After that it may go up based on your billing. That was for $1M/$2M.

Our billing rates at the office vary between $130 and $175 and I charge my friends/family $100/hr for anything with liability. @Ultrafault has a good point. If people can find high quality engineering work for super low prices it not only undercuts your industry but they may not value your own personal time.

In regards to price increase, you should clarify with the insurance company what is included in each category.  For "structural" they may use this designation for simple beams/headers as well as major structural design for a full house or steel members for a commercial building. 

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10 hours ago, SE_FL said: I was quoted $2500 for civil engineering, then I clarified I was structural and the price went up to $5000 for the first year. After that it may go up based on your billing. That was for $1M/$2M.

Our billing rates at the office vary between $130 and $175 and I charge my friends/family $100/hr for anything with liability. @Ultrafault has a good point. If people can find high quality engineering work for super low prices it not only undercuts your industry but they may not value your own personal time.

In regards to price increase, you should clarify with the insurance company what is included in each category.  For "structural" they may use this designation for simple beams/headers as well as major structural design for a full house or steel members for a commercial building. 

Same designation for structural for the company they were quoting.

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As I'm writing this reply, my wife just volunteered me to go out to someones house and check to see if an interior wall is load bearing. This is our kids classmates that live out on a farm and my wife wants eggs from their free range chickens. I'm guessing if they need permit documents we'll have to work something out. Monthly payments in eggs?

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I did work on a brewery and tried to get paid in free beer.  Wife told me no <_<

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