“First rule of engineering; beware prototypes. Along with, avoid anything made by an engineer who doesn’t have all his own fingers.” ― Simon R. Green


The post below may sound a little familiar to some, but I thought it would be a great subject for The Engineering Job Link Blog with a few edits. So, without further delay…

 

You are working your normal daily routine at the engineering office with the usual “no news is good news” attitude concerning the production facility at your company. Then boom, the bottom falls out and your office is flooded with one issue after another till days’ end. Ahhh… the perils of the efficient engineer!

Those good working solutions that you provide often never seem to get noticed. That’s just the way it is. No time for pats on the back… get back to the grind and “gitter-done”.

All that time at work in problem solving mode leaves no time to figure out the business side of things. That’s exactly where your some in management wants you! Think about it. There is little incentive for your employer to jack up your pay to eat into his profits when there is another engineer out there that can do what you do. He/she may even be better and cheaper as far as management knows.

I know, everyone thinks that they cannot be replaced… think again! Businesses lose key employees every day and somehow bounce back after a short slug or no issues at all.

So where does this leave you?

Wouldn’t it be nice to have a backup plan?

Ever thought of working outside the reigns of your current employer for more income and experience, but too busy to figure it out?

-Well, I have a possible solution for you-

But first, a little about me. I’m a mechanical engineer with an active professional engineering license in the state of Mississippi. Most of my experience is in the Marine, Oil and Space Industries. I’ve worked in both commercial and government settings, but I much prefer commercial work due to the efficiency of progress. Working for government contracts usually drives me nuts with the paperwork, canned processes and job length till completion! However, at the same time, I am very thankful for every ounce of work made available to me.

Through the years, the job market for engineers always seemed find rocky ground. I’ve often felt like the work could run out soon and I would be out of a job. The Marine industry has a way with tossing you to and fro in the waves of market demand or lack thereof.

Early in 2013, I began actions to free myself from the constraints of employment from one company at a time. My goal was to provide multiple sources of income in order to reduce the risk provided by a single employer. So I really wanted to add more eggs to my basket. After taking some steps, I began to talk with other companies for engineering related work.

However, before this could happen properly I had to own a company (or employ a licensed PE) that provides engineering services and be insured as such. Engineering companies cannot operate to provide engineering services in my state without registering and receiving a Certificate of Authority (COA) from the State Board of Licensure. In addition, companies who perform these services cannot get this COA unless the company employs a Professional Engineer. This is a simplified explanation, but there are items to address if an engineer wants to branch out into the consulting world. I’ve been through this process, so see below for some steps to help guide you to do the same:

 

1. PE License.     

If you do not have a PE license, get one. The sooner the better. You cannot operate as a consulting engineer without a PE working in your company and you need to be the main one for proper control.

For many years, I bought into the idea that I would retire at a company after years of loyal work and live happily ever after. On multiple occasions I was a little too comfortable where I worked. After years of service, I realized that I was just not satisfied with my career direction. I had taken the PE Exam previously, but failed due to lack of drive for study time mixed with the demands of a steady job. So for many years, I didn’t pursue a second testing attempt on the PE Exam. Honestly, I didn’t see the point at the time.

Funny story: When I decided to re-take the 8-hour test, I took a study course, prepped my notes and every other piece of necessary paperwork except one… As I entered the building to take my test after all of those preparations, I laid my driver’s license on the admitting table for entry and the lady takes one look at it, looks up and says, “this license is expired since last month” as if it were no big deal. I almost passed out with disbelief and anger. I held the anger in though, because I knew I needed to come back after another six-month stretch when the test was available again. It was a long 3 – 4 hour drive back home that day!

Anyway, make sure you triple check all of the requirements in your state in addition to the expiration date on your ID.

I highly recommend taking a review course for your discipline. The review course will ensure that you stay on track with your study habits. Most of us need help here and a rigorous course will keep you on your toes. I took one offered by, Professional Publications, Inc. http://ppi2pass.com/. They’ve been publishing professional licensing exam materials since 1975 and I was able to take the course on-line. Often, on-line courses are a joke, but this is very rigorous if you are serious about keeping up. Also the notes were available after each lecture with a mountain of supporting information. My course was a little less than $2K and included various study materials that were shipped to my home in addition to the on-line support. This was worth the expense!

Here’s another tip from a good friend concerning test time that was very handy! When you get your test material with the Scantron sheet, quickly skim through every problem and number them (on the test sheets, not the Scantron sheet) this way:

a. Put a number 1 beside all of the problems that you think you can do very quickly.

b. Write number 2 beside those that will take a little more effort.

c. Then number 3 beside the hardest problems.

Work the problems in this order with special care not to take too long on each. When you get through with the numbers 1 and 2, then start churning on the number 3’s. Watch the clock periodically, because it will get away from you very quickly. It’s amazing how fast 8 hours will fly by! The last 5 minutes of the test, guess at the remaining problems if not finished. There is no foul in doing this and you may get some of them correct. Good Luck!

 

2. Form a Limited Liability Company (LLC) or similar. See some considerations below:

Tax. If you work as a sole proprietor, you will likely be blasted in the tax arena at years’ end. So, I highly advise that you speak to a local CPA and Lawyer to set up an LLC or similar. This is not as complicated as you may think. They have done this many times and can help you tremendously with set-up.

My company is an LLC, but set up for tax purposes as an S-Corp with the Mississippi Department of Treasury. Your local CPA and Lawyer can guide you into the best setup for your company structure. You may be able to save a few bucks setting up the LLC on-line, but I prefer to have personal feedback and guidance when I’m stepping into the land of unknown.

In addition, your CPA can help you set up payroll, payroll taxes, Federal Estimated Tax, State estimated tax, etc… and how/when to pay each. He or she will also take care of your taxes… woohoo! I hated doing my own taxes with a passion.

Documents. Invoicing, contracts, form letters, financial documents and general business documents take time to formulate. So it was a no-brainer for me to buy access to many of these ready-made documents from a company called Business-In-A-Box (business-in-a-box.com). However, when you get into contracts and the other legal documents, get a real lawyer to review and edit your final draft before use. Absolute MUST!

Bank. You will need a separate company bank account to keep those finances separate from your personal finances. This is necessary for audits and similar.

Equipment. Obviously, you will need your own computer, associated software and references to perform your specialized service.

Location. I am currently working from a home office. I’ll continue to do that until forced to do otherwise. There are both advantages and disadvantages to working from home, but the main advantage for me is cost. Why pay rent elsewhere when I don’t have to?

 

3. E&O Insurance.     

In the engineering business, you need to have some protection for your services. Some companies will require you to have it, but you need this protection anyway.

Professional liability insurance and errors & omissions insurance (E&O) are the same thing. These terms are interchangeable. You can easily run complex projects for your clients that they may not fully understand. Professional liability insurance is important for engineering businesses where incorrect advice or a failure to perform professional services could lead to a lawsuit. Even if you haven’t made a mistake, you can still be sued. A general professional liability insurance policy will cover legal fees and protect you and your business from crippling costs.

You will need to find a good broker for your specific services. They will ask you several questions concerning your business and income projections. The on-line insurance companies will not typically cover most engineering services, so you will likely need to find a local broker or similar. Your State Department of Insurance may also be able to refer you to a good provider.

This is not a trivial expense for startups. So be prepared to spend $5 to $15K annually if you go this route. On the other hand, this is a service I offer through The Engineering Job Link! You will just submit an application for review and you could be approved.

If you are between jobs or want to work freelance/consulting engineering full-time, insurance for health/ dental/ vision and similar need to be considered. There are many providers on-line. In my research, the society memberships do not offer better pricing, but that’s just me. Better to research and look at your options.

 

4. Network with friends, family and colleagues.   

This may sound obvious, but there is a mental block that goes with this territory. I think it is associated with pride and the possibility of failure, but that is just me thinking out loud. Just build good content, step off the cliff and spread your wings.

Use social media for networking, but don’t flood it with desperate attempts. Just an occasional post from your company website unless you offer a weekly blog that is helpful. The thing to remember is to be helpful for them with useful content and not come across as a beggar with your hand out. Definitely don’t want to come across as one of those pyramid scheme pushers!

One commenter put it simply that you need to know a lot of people in the business and deliver what you promise!

On another note, if you have a product or service idea to sell, Linked-In advertising is pretty simple to use and it can be funneled to specific engineering groups.

Google AdWords is another advertising method used where you can purchase based on CPC (Cost per Click) or CPM (Cost per 1000 impressions). However, it may be better to contact a digital ad agency to get more bang for your buck. Here are a few to note:

http://www.clicks2customers.com/

http://www.workingplanet.com/

http://www.sempo.org/

 

5. Work Hard and Ask for Feedback. 

Working hard is another given, but you need to add the word smart in there as well. You can work your fingers to the bone doing the wrong thing! Ask clients how you could improve their work week. Put yourself in their shoes and think of ways to make their life easier while gaining cues to help your company.

Here are some example questions to get your mind in gear:

  • What made you decide to hire me? For marketing reasons, you can focus budget in areas that work. For single consulting, word of mouth goes a long way.
  • What’s one thing I do better than others you do business with? You can focus on and advertise this trait.
  • What’s one thing I could do to create a better experience for you? It’s easy to keep doing things the same way without question, but better if you understand what could be improved for the customer. This sets you farther apart from your competition.
  • Do you refer me to others? If you set this one up tactfully and get an honest answer, it’s a boost to your confidence that you are on the right track.
  • What other companies to you love to refer? Since these companies are strumming the correct chords here, they are likely doing it elsewhere. They could be good candidates for future strategic relationships.

Here’s another motivation point of view from Mark Cuban,

“Work {and think} like there is someone working twenty-four hours a day to take it all away from you.”

If you can get into that mindset, you may have a little oomph in your steps!

The road to consultant will take some experience and time. So, you must make a plan to succeed or you will find yourself at the mercy and whim of others. Construct your plan and chip away at it little by little. You’ll be surprised how fast things come to fruition. Also note that your current employer may not allow you to perform other consulting work based on your employment agreement. In cases such as this, you can do as much preparation as possible before pulling the trigger. You never know what things will be like six to twelve months down the road, so personal improvement is never a waste. Chances are that they are a bit controlling anyway if contract wording such as that exists.

Ok now, get your nose out of that spreadsheet and take a look at how your business is structured. It can help you formulate your own someday!

I hope you enjoyed this post. I wanted it to be a bit shorter, but I believe it will be a useful guide. If so, and you feel it is worth sharing, please click the appropriate social media share buttons… I will greatly appreciate it and any feedback as well.

I wish you all the best!

David

One thought on “How to be an Engineering Consultant Quick Guide

  1. Milan Baros says:

    Thanks with regard to furnishing these substantial knowledge

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