Suggestions for starting your own consulting

[electric]

I am electrical PE working for MEP consulting firm with more than 7 years experience. I would like to know the lessons learned, suggestions, pitfalls from people who quit their job to start their own consulting firm based upon their past experience.

Sometimes I think I want to jump into it but it is a scary thought not having a regular paycheck.

 

[ptatohed]

http://engineerboards.com/index.php?showforum=7

 

[solomonb]

I would do a fair amount of business plan analysis before I jumped ship. You really need to have a very clear and in-depth understanding of business-- finance,bookkeeping, marketing, information technology as well as good networking skills. The truth of the matter is that you may be a great EE, however, when you are on your own, the domain experience is probably the least important part of the gig. You really need to know how to make all of the other parts work.

If you are in a big company, you have a secretary, admin and probably some direct reports. Now YOU are the monkey that has to do everything-- and I do mean everything. Do you know bookkeeping? Like data entry? Pay the bills? Send the invoices? Call on delinquent accounts receivable? The true answer is probably HELL NO-- I am EE. Well, guess what-- if you don't do the admin work, it does not get done. Sure, your wife/girlfriend/neighbor/daughter/son in college/ can do the bookkeeping. Well, not exactly. Your name is on the door, you own the store--- if you don't know what is going on, rest assured that nobody else does either.

Do you like to design web pages? Fix the printer when it does not work? Figure out why the LAN does not work? Sure, you are EE-- however, when you are doing that, you are not making any money. OK, you outsource that. Great, where does the funding come from-- the bank, your piggy bank, your retirement account, your dad/mom, loan from the bank? If loan from bank, wheer is the money going to come from to pay the loan off if you have no work coming in?

Marketing-- designing business cards, letterhead, presentation folders, give away pieces, i.e, rulers, pens, etc. Like doing that? Are you creative? Know what colors work? Have to have a grafix designer help--costs money, however, the work received is well worth the fee paid.

Networking-- making contacts, then being able to convert those contacts into contracts!!

OK, I have been in the consulting business for 5 years-- this is a HELL OF LOT TOUGHER than you might imagine-- and I had/have a great network. Amazingly, I work with many companies that are struggling with all of the issues I listed above. Most folks don't think about all of this until they are in the middle of the ocean and then wonder why things are not going well. Sometimes we can help, however, most times, all of the money has been spent before they come seeking help and by that time, it is too late.

Oh, you need to find an office as well. Yes, you can work at home-- without the kids, dogs and ?????.

Does this help?

 

[darius]

solomonb: very very nice said, is not easy to have your own business, maybe everyone is dreaming to get there at some point, but when you are really there you just realize that is not what you were expecting. You are in charge for 24 hours a day, no weekends, no evenings, no vacation, your mind is always focus on the business. If you can manage, maybe you gain more money, but not even time to spend it. Good luck

 

[Peele1]

I've started doing non-PE work outside of my job. One day, I'd like to run my own business, but I NEED the regular paycheck.

If you can start doing jobs outside of your regular job, while working your regular job, then go for it.

Don't forget to have an LLC, PLLC, S-corp and your E&O and other insurances before you do any work.

 

[solomonb]

Mr Peele1 has identified another whole set of challenges for the new business owner!! The type of legal entity that you establish is determined by a plethora of factors-- enough that you need your accountant and attorney to give you good counsel. Sure, this is another $1000 spent-- you may have forgotten about that. Now, you can file the paperwork for the LLC, sole proprieitorship, etc., however, the guidance from the attorney and accountant will help when tax time comes. Rest assured, tax time comes--and there are reasons why each individual legal entity is suited for a particular type of individual and business. Do not assume just because your neighbor or brother in law became an LLC or S corp that is the way that you need to go. Here is where professional help comes into play. Sure, you can take a wag at something and forget about the advice, however, 12-18 months down the road, you may have made a serious mistake that costs you money.

When you are in business, you watch every PENNY-- every damn one of them-- because if you don't, nobody else does. After all, the reason that you started this business is to make green dollar bills-- there is no other reason. Don't forget that. As I said earlier, this is DAMN TOUGH-- and anyone who tells you otherwise is lying! Does not mean that you should not do it, just be forewarned about what you are getting in to.

We work with lots of folks who had no foggy idea of what this is all about-- until they get in big trouble and come and see advice. As I said earlier, sometimes we can help, however, most times, all of the money is spent and there is no money for help. The end result-- normally a crash of some type. Sometimes fatal, sometimes damaging, but not fatal.

I am not trying to talk anyone out of going into business for themselves, there are some great benefits to doing so, however, don't do this blindly-- there is no reason to spend $150,000 and then have it go down the drain because you failed to recognize, realize and consider all of the factors that I have addressed. Would I do it again, hell YES-- however, I had a good idea of what this is all about---- and five years later, nothing has changed my mind.