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Self Employed Engineers-How did you make it happen?

Self Employed Engineers-How did you make it happen?

(OP)
I know lots of you are self employed in various capacities. I'm at sort of a crossroads professionally and would like to hear any anecdotes you're willing to share. I'm mainly interested in:
-How did you first make the leap from employee to business owner/consultant/whatever else you might classify yourself as?
-What kind of work do you do and how did you decide you were qualified to do what you do on your own?
-How satisfied are you in terms of enjoying your work, work/life balance, income, etc.?
-Anything else interesting you feel like sharing.

RE: Self Employed Engineers-How did you make it happen?

I would think your main question would be "What circumstances should be present for one to consider becoming self employed?" List of possible clients?; money in bank to live on at the start?; your reputation: Office: 40+ hours a week; family needs; etc. and more!!

For me it was easy. Retired as part owner of engineering company at age 55 and wanted to keep busy. Was active until recently, now age 89.

RE: Self Employed Engineers-How did you make it happen?

I retired in 2012 from the corporate BS, became an engineering consultant and enjoy each day. If I feel I can't perform the work I tell the client. They appreciate the honesty.

I really have not worked in 5 years.

RE: Self Employed Engineers-How did you make it happen?

3
I retired from a big corporation in 2003 (the minute I turned 50, the retirement health benefit was maxed and I thought I could do a better job managing a lump sum retirement than they were doing). Borrowed 6 months living expenses from my 401K and was in the black in the first quarter.

Basically I treated my 23 years with the corporation as an internship for my current position. While employed by them I was active in the local Society of Petroleum Engineers chapter (Section Chairman) with my management's enthusiastic approval, a member of the local National Society of Professional Engineers, member in NACE and ASME. Went to all the luncheon meetings to network. Presented a couple of papers a year at each of them. Went to one big conference with a corporate-approved paper every year. Got to know a LOT of people. Many of them became my clients. Bottom line is if people have never heard of you, it is impossible to differentiate yourself from the other dozen cold calls that any engineer with a budget gets every day.

That network got me through 10 years or so (until all of my contacts retired, damn them). Then I started getting calls from people who liked one of my posts on eng-tips.com and followed the link in my signature and liked what they saw on my web site. Several people have said that they asked themselves "if he's giving away this much good stuff, I wonder what we'd get if we paid him?" Then they called and the rest as they say is history. You have to stand out from the herd or you will become a statistic.

Work/life balance is as it has been for 45 years, I need to work 60+ hours/week to keep myself as sane as I ever get. Projects are Oil & Gas facilities and I jacked my hourly rate up high enough that I only get called for interesting problems. It works for me.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Self Employed Engineers-How did you make it happen?

I got laid off from my best job ever where "we never do lay offs" because of industry collapse.
Decided to roll the dice and start a solo consultancy.
Nine weeks later the 9-11 Event occurred. The economy entered a deep recession.
Six months later all startup cash had evaporated, no leads, no work.
So did, apparently, every engineering job on the planet. You had to be there and experience it.
Previous company called for consulting help with one of their customers.
That started a 9-month series of contracts that re-built my confidence and got me some operating funds.
Re-started my business and went prospecting again.
I discovered that, for those who are honest, ethical, sincere, and willing to dig and put forth the effort, there is work hiding under every bush. This applies in all business cycles, up & down, because everyone has problems that need solving.
It takes time, hard work, and finesse to build a clientele of delighted customers. It's absolutely critical to do so because those are the people who will provide good references for your work.

TygerDawg
Blue Technik LLC
Virtuoso Robotics Engineering
www.bluetechnik.com

RE: Self Employed Engineers-How did you make it happen?

OK so you guys are:
89
late 60s?
64
tygerdawg I am not sure

What is the minimum age? You can't consult much fresh out of engineering school.
I'm 45 and I see dozens of old engineering class mates on Linkedin as CEO of a company with their family name.
Some only for a few months.
How realistic is that. I guess you need to have a golden idea, some luck and not count the hours.

How do you put up with all the non engineering/admin work? It must be half of the work, right?

RE: Self Employed Engineers-How did you make it happen?

There really is no minimum (or maximum for that matter) age that people have been successful starting consulting businesses. There are some restrictions on licencing for a company that holds itself out as competent to do "engineering" (e.g., in my state you cannot get a local business license for a company offering engineering services without a P.E. in responsible charge) so however long it takes to get a P.E. might define the minimum age, but I know of some consultants that make a go of it without a P.E.

The real key is how do you stand out from the crowd in a good way. My claim to fame is three patents, a text book, contributing author to another book, dozens of publications, a broad network, and a reputation for solutions that work. Can you differentiate yourself in a sentence? If not, then your chances of success regardless of your age go way way down.

As to the administrative parts of the job, I put aside one day every two weeks to pay bills, do billing, read backed up journals, and think about where the next group of clients might come from. It is plenty, and I'm usually back to real work by lunch time.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Self Employed Engineers-How did you make it happen?

Laid off at 49 in 2009. Spent 12 months looking for a job but there was nothing. Paid $40 to the state for a business license. I was a PE already.

Finally landed a job at an engineering firm 13 months after lay off so I put the business on the back burner. Resigned 5 months later because I wouldn't lie.

One month later had a job at a measurement manufacturer. Resigned 6-7 months later because I wouldn't lie.

That's when I decided to put to good use my business license, which was May 2011. I spent years in industry studying instrumentation, control theory, and systems. I spent years applying that knowledge and did some good work. I got great training automating manufacturing plants and I built on that training because it was interesting to me.

Going into business for myself has been a good decision for me and especially since I've aged out of Corporate America. It's been expensive but I didn't think I had too many choices because I wanted to avoid ethics conflicts. You never lie. It is unethical and casts a dark shadow on the profession.

In 2014, the business was going up nicely but unfortunate events really knocked the wind out of my sails. It's been a struggle ever since but I'll either sink or swim.

I've learned a lot running my own business. I've learned more about my strengths and weaknesses as well as some aspects I didn't know about my personality. I've learned more about professionalism and laws that govern my conduct as a Professional Engineer. I've learned the subtle nature of conflicts with the law through some Clients. Running your own business sharpens you tremendously, in my experience. Engineering is more than just the technical stuff and, as an engineer, I am able to do more beyond the technical stuff.

I set aside time each week to take care of the paperwork. You'll figure out what works best for you.

As I reflect on my career, I could have begun my own company after about 10 years of experience. By that time, I had enough experience running projects of my own to do it.

I think it's wise to always learn and push yourself to grow into running your own business. Employers need to be grooming their employees, at every level, for leadership and business to one day take the reigns. But, that's my philosophy.

All the best!

Pamela K. Quillin, P.E.
Quillin Engineering, LLC
NSPE-CO, Central Chapter
Dinner program: http://nspe-co.org/events.php

RE: Self Employed Engineers-How did you make it happen?

"Employers need to be grooming their employees, at every level, for leadership and business to one day take the reigns. But, that's my philosophy."

I couldn't agree more, but the sad reality is that 80% if not more of the managers, at least the ones I met in my career, apparently have major self-confidence issues, in the sense that the lower ranks are seen as threats that are better kept as dumb as possible. Needless to say that this goes against the company's interest.

Anyway even dumb I guess one can learn very fast once laid off and left without alternatives :)

RE: Self Employed Engineers-How did you make it happen?

epoisses,
I see that characteristic of bad managers more as "if this guy gets promoted, how will my group meet its goals?" than threats. I've been in salary meetings with many managers that fought like wolverines to get more money for people they refused to promote.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Self Employed Engineers-How did you make it happen?

Well I like how you gave a positive turn to the story, but I think I would have noticed the "more money" part :)

RE: Self Employed Engineers-How did you make it happen?

Grooming employees for management roles may be a great idea in other professions, but for most in engineering it would be a waste of resources given the relative few that become managers.

RE: Self Employed Engineers-How did you make it happen?

Sometimes the decision is made for you, I was working for a company as a designer, and doing fiberglass sailplane repairs as a side job. I got a flood of work in broken fiberglass gliders, and was complaining to a co-worker that I did not know how I was going to handle it all.
This co-worker promptly ratted me out to the boss, and Voila 2 days later I did not have to worry about it, I had a full time job fixing fiberglass sailplanes. That job lasted for 12 years before I decided to shut it down and take a job with General Dynamics.
B.E.

You are judged not by what you know, but by what you can do.

RE: Self Employed Engineers-How did you make it happen?

epoisses,
I didn't mean to put a positive spin on it. I find these managers who hold people back to make their team (and therefore themselves) look good to be self-serving slime that are just as worthless as the tiny little guys that hold people back because they personally have low self-esteem and want to punish ability. I've seen them both in abundance and hold them all in disdain. I've had several managers who consistenly consider the needs of the company and the needs of the employee over the long term instead of just looking at their own goals, ego, and successes, and they are fun to work for, too bad they seem to be kind of rare.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Self Employed Engineers-How did you make it happen?

@zdas04 - OK I see what you mean.
We have a few of those rare ones here, the people underneath them thrive but the rest of the organisation reacts like a body to foreign matter implants that are not really compatible with it :(

Whining along, I know, sorry.

RE: Self Employed Engineers-How did you make it happen?

A manager once told me there was no way I would be promoted. According to him, I was too good at my job to let go. It was a compliment but it ultimately didn't serve the company or me.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC
NSPE-CO, Central Chapter
Dinner program: http://nspe-co.org/events.php

RE: Self Employed Engineers-How did you make it happen?

Quote (CWB1)

Grooming employees for management roles may be a great idea in other professions, but for most in engineering it would be a waste of resources given the relative few that become managers.

That is true but those managers are short-sighted. Everyone needs to be developed to benefit the company and to keep the company moving forward in the best possible ways. Whether an engineer intends to go solo or not, engineers need to maintain their development as though they are. Succession planning up and down the ranks is important. I've seen cases where operators weren't adequately trained and it caused problems. Every job matters.

If you invest in others, they're more likely to invest in you. It's always about relationships and how to maintain healthy ones. I'm still learning that myself.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC
NSPE-CO, Central Chapter
Dinner program: http://nspe-co.org/events.php

RE: Self Employed Engineers-How did you make it happen?

The investing part is so true. There is a company I know that does heavy investing in their employees and they probably pay +20% less than most. Everyone at that company though is known to be a baller and if worst comes to worst, they can find a job anywhere else and not skip a beat. They have much less turnover ,too, than most organizations that have that specialty.

Training is probably one of the cheapest ways to keep employees, whether it is used or not. Considering how hard and expensive it is to recruit an experienced engineer , training easily offsets the cost if it persuades someone to just stay with the company longer. The longer people hang around, the less your turnover cost will be. Training shouldn't be viewed as a loss if it isn't used on lifers.

RE: Self Employed Engineers-How did you make it happen?

The way I see it (I anticipate this will be a bit extreme as skeptical analysis...), coming from the oil and gas segment, entrepreneurship is turning to be a necessity in order to survive in an industry that has become extremely volatile and fast changing. The threat of the "Adapt or Die" paradigm necessitates a changed mindset more than ever. We were told that before of course, but I am afraid we are on our own now.

For instance, recently, say after the last collapse of oil prices, I saw big mergers and acquisitions happening involving billions of dollars in particular in the energy / oil and gas sector, just to shutdown the same relevant facilities/businesses after two or three years, thereby impacting hundred of thousands of people and their families.

My point, maybe it is time to question the common belief that there (must be) is "a pilot in the airplane"... At the end, being enrolled in a corporation keeps you assisted to a certain extent. Not saying the experience is of no value, but the corporate model may not correspond anymore to the global socio-economical situation. There is no evidence that the economic cycles / patterns the world experienced in the past (from very far backward to recent decades) must preclude the type of the economic chocs and crisis that we could be exposed to in the future. Unknown territory.

RE: Self Employed Engineers-How did you make it happen?

From my research (asking people I know in the industry and examining people's Linkedin profiles), most engineers who strike off on their own do so in their late 30's to mid 40's. Almost nobody does before 10 years experience, though I do know a couple who did sooner. Once you're in your 40's you will (should) have saved enough money and built enough experience and connections that you are pretty well prepared to start consulting on your own if you want. You will also have been more likely to have some management experience which also helps.

Regarding training and managing: I insist that my PM's develop the ability to take full ownership of their projects. They do well in that regard for the most part. Yes, they often times fall short - but that's why I'm here to help and to lead. Getting PMs fully self sufficient requires some degree of management training, including soft skills like how to direct and influence subordinates. They do not have any direct reports, but there are people that assist the PMs with their tasks who need to listen to them and do what they are assigned. PM's with better soft skills tend to get the assistance they need more than those with lesser soft skills. The jump from fully self sufficient PM to manager of staff is not too big from the ops perspective. However, leading people is a very big deal and is hard to get right. There definitely needs to be a "pilot in the airplane" where I am. The goal is to have organization and coordination such that the department runs on "autopilot", but consulting is just too messy to rely on the system to get it done. Managing is as much an art as anything else. Those who have not managed others don't really have a clue about it. They normally just judge their boss and think they could do better, or deem their boss's presence unnecessary. That may be true for some top performers, but by definition, not everyone is a top performer.

RE: Self Employed Engineers-How did you make it happen?

4
I'll try to respond with a longer post, but briefly:

I'm 46. I started consulting part time (moonlighting) in 2006. My first client was a former employer that I had left in 2004. I used one of their available SolidWorks licenses to do the work. Building and maintaining excellent relationships with colleagues, employers, vendors, clients, and other contacts that you make during your career will be critical to your success and longevity as a consultant.

I have very specialized and deep expertise (in precision machine design and optomechanical engineering) that I apply to a variety of industries (horizontal specialization). Specialization will be key to your success and longevity as a consultant.

In 2008, I formed an LLC and purchased my own license of SolidWorks Premium (still my biggest single investment). The amount I consulted varied wildly in the following few years (by my choice).

I started consulting full time in 2011 and couldn't be happier with the life it has enabled me to lead, despite typical ups and downs.

Even though my first job as a consultant paid better than any salaried job I held then or since, I was undercharging. My rate increased steadily through that period. It's more than 2X what I started at. I suspect it would be higher than if I didn't still succumb to the classic dilemma of neglecting marketing/business development to do fulfillment, but I'm getting better. I am also experimenting with value-priced services that have a much higher effective rate while still providing tremendous ROI for clients. Understanding the value you provide and charging accordingly will be critical to your success and longevity as a consultant.

Consulting is incredibly cash-flow positive and profitable. And you will get yourself into trouble if you do not manage that cash flow; set money aside for the eventual big tax bill; set aside money for large, necessary future purchases (e.g., software renewals); avoid unnecessary large purchases that you tell yourself are necessary or will really help you grow your business but aren't or won't; and avoid unnecessary small purchases that can really add up. Doing so will be critical to your success and longevity as a consultant.

To help implement that last point, I recommend Profit First by Mike Michalowicz. While many of the examples in the book relate to businesses who charge too little and spend too much, as noted above, that likely isn't the problem you'll face as a consultant. But the book is helpful in getting you to think like a business should think and to distinguish between:

  • Profit (the reward for the risk you take as a business owner) and the purposes it is meant for
  • Compensation (the money you get for doing the work in your business
  • Money set aside for taxes and other big, irregular needs
  • Expenses - The money you allow for yourself to use to operate your business
In 2012, my largest client at the time declared bankruptcy on very short notice, not long after they had asked me for even more of my time, which I obliged to do, while falling behind on my invoicing. So many painful lessons in that one experience. Once the bankruptcy court was through, they actually asked me to pay them a substantial amount, never mind what they owed me for work done and expenses accrued in their name. You obviously want to avoid being in that situation, and you want to have a contingency fund.

I rambled on a lot more than I planned to. I hope it's coherent.

- Rob Campbell, PE
Learn precision engineering at practicalprecision.com

RE: Self Employed Engineers-How did you make it happen?

Imagitec's post is telling. It's obvious that he learned from his experiences as they happened. To succeed as a business, you must think and behave as a good, competent businessman. If your only employee is mediocre, your challenges will be greater, but one way or another, you've got to take care of business. Business is not rocket science, business is business. You know that, but will you actually take care of it when it's time? Seriously, talk with and get close with at least one small businessman that does something altogether different than you/us. That way you won't confuse business with your profession. There isn't, or needn't be any conflict, but some people get confused and think they can somehow compensate for errors or omissions in one by overdoing something in the other. The story about a key customer's bankruptcy is sort of an example. You can survive some such mistakes, but they are expensive on many levels.

Do you really know your competition? Do you really know their fees/rates? Do you REALLY understand the components of those rates, and why they add up to that? Do you really, honestly, accurately know what sets you apart and are you willing to market that (instead of what you'd rather be and sell)? Just do it! Have fun when the time is right.

.

(Me,,,wrong? ...aw, just fine-tuning my sarcasm!)

RE: Self Employed Engineers-How did you make it happen?

3
To Rob Campbells' point, ask around for information on your potential Client. Many service providers call vendors I use to determine the character, integrity, seriousness, ethics, pay on time, can they pay for the project, ease of doing business with, etc. of potential Clients. I learned that by getting crosswise with a Client, my first.

I knew what I could deliver and negotiated the contract to my deliverables. They were responsible for the mechanical installation and wanted that to avoid paying an electrical contractor. They insisted that they were the original do-it-yourselfers. They insisted a lot of things about themselves.

As I got into the project, I heard from vendor after vendor that they were cheap, wanted discounts and not just any old discounts but large discounts, looked for freebies often, weren't serious about investing in their own company, etc. Red flag #1 but I didn't recognize it. I was accustomed to large companies complaining about the investments in the company so it was normal to me.

Red flag #2: They didn't want to do the mechanical installation and asked me to do it, which I did and at my cost because they complained about the quote from the contractor. The project was already behind schedule because they were not doing their part so I sucked it up to be a good engineering company and keep the project moving forward. I learned I can function as a GC. I learned I need to not function as a GC at my cost.

Red flag #3: Within a month of contract signing, they changed the scope.

Red flag #4: They had no business processes and were running their company more blindly than I realized.

Red flag #5: They have trust problems.

Ultimately, because I was running behind schedule we got into a contract dispute, which was never repaired. They threatened to sue me over a litany of problems, which were false. I had to take it seriously because they're much, much bigger than me and have a high powered law firm, which sent me nasty letters. I interviewed several attorneys and walked in with a notebook of reports, emails, invoices, etc., which had been provided to my Client every step of the way. All of the attorneys had some choice words, choice observations, and advice except the one I hired. The one I hired told me what I looked like, at first glance. That was a useful perspective and I appreciated his honesty. As he became familiar with the case, he began issuing choice words, choice observations, and advice, which sounded familiar. Some of the attorneys offered the observation that I had been bullied each step of the way. Interestingly, a college friend said the same thing.

Each attorney said there are good companies and bad companies. I had run into a bad company. When I defended my Client, each attorney emphatically replied that they are bad people, a bad company, and I need to identify the good ones and leave the bad ones alone. Good companies are interested in investing in their business and their suppliers. They don't push for discounts and, when problems arise, they fully support and work through problems with their suppliers. They understand their suppliers are there to help them make their businesses better and cannot work for little or nothing and don't expect them to do so. They believe in everyone making a fair profit. They said to never go into that plant again because they'll just run over me again. If they do it once, they will do it again. These were experienced attorneys saying these things.

My former Client called a supplier of mine for all emails, POs, invoices, etc. My supplier refused because that is a breach of ethics and the contracts were with my company. That call sent shock waves throughout management, in my supplier, and I had phone calls and emails from more than one person alerting me. My former Client wanted a recommendation for another company to finish the project, from that supplier, who didn't want to provide one. Their reasoning, "Look what they did to you. What could we say? They did it to you; they'll do it to someone else. We cannot send another company in there knowing what they did to you." That was a new lesson for me, too. Ask! Vendors are more than willing to tell, if they know.

The sad aspect of the POs, invoices, etc. was that my Client had all of that anyway and didn't understand what they had. They hired a CFO, with little experience, who didn't understand the documentation I had given them either. I was shocked at their ignorance. They had such trust problems I volunteered to be completely transparent. I didn't think it mattered but I learned, at the end, it does matter. I will never be transparent again.

When I read Character Disturbance by George Simon, Ph.D., I saw my former Clients and understood then what each attorney had told me and what I had been up against. It pays to understand human behavior, yours and others'. That experience is another reason I highly recommend people read Character Disturbance. It is accurate and good knowledge to have.

It is good to understand what kind of reputation one is building with each interaction. I warned my former Client about that but it was not understood or well received. The experience provides another background view of what goes on in business.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC
NSPE-CO, Central Chapter
Dinner program: http://nspe-co.org/events.php

RE: Self Employed Engineers-How did you make it happen?

2
To follow up on Pamela's post,
I ran into the same kind of client on a custom fiberglass molding project, Constantly pushing the schedule up, forcing overtime to meet the schedule. Changing the scope and detail of the contract, and then holding up payment because he said I was late on delivery.
To make a long story short he got $25,000 worth of product out of the door without paying for it.
All the time making me feel bad because I was not meeting his expectations.
Later I found out he had done exactly the same thing to other suppliers, always chopping it off at around $25000 which was at that time too large to go to small claims court , and not a big enough amount to get a lawyer interested in recovering it for you.
B.E.

You are judged not by what you know, but by what you can do.

RE: Self Employed Engineers-How did you make it happen?

Berkshire, have you developed a technique for getting out of such problems, when you see them coming?

My former Client beat me up pretty bad, too. They had an incident in the plant, which they blamed on me because I was running behind schedule. All of my unanswered questions, which were documented in reports and emails, and the huge addition to my deliverables were irrelevant because their true goal was to blame shift. If someone does no wrong, in their own eyes, it's time to leave.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC
NSPE-CO, Central Chapter
Dinner program: http://nspe-co.org/events.php

RE: Self Employed Engineers-How did you make it happen?

La Cajun,
I got a lot more cagey about taking on jobs that seemed to be too good to be true, because I found out that they were. I also learned to beware of customers who threw money around like it was no object, then bullied you because you were small fry, and they were rich. I also developed a tingling sense for customers who paid cash on the barrel head until they established credit, then would let payments slide. My least favorite customers were insurance companies, although to be fair, it was the individual insurance adjusters who were the problem here. There were two types, one would take your estimate or quote at face value, cut you a partial check, say send me the balance when you are done, and move on. The other type would look over your estimate , tell you it was too high and demand a 20% cut.
It did not take long to figure out who was who, so when you got a cutter in the door you padded the estimate by, you guessed it 20% . The other problem with insurance companies was getting the final check. I used to just tell the customer that he or she could not have their aircraft until the bill was settled in full.
Even at that some insurance companies would not pay for 180 days.
Remember for the most part I was providing a service ( a repair) or a product ( manufactured goods.)
My final solution to all of this was to retire some 8 years ago.
B.E.

You are judged not by what you know, but by what you can do.

RE: Self Employed Engineers-How did you make it happen?

Quote (berkshire )

The other type would look over your estimate , tell you it was too high and demand a 20% cut. It did not take long to figure out who was who, so when you got a cutter in the door you padded the estimate by, you guessed it 20%.

You were still giving up money (4% overall). You should have been padding it 25%. Then when you cut off 20% from that padded number, you would be back to your original number.

RE: Self Employed Engineers-How did you make it happen?

MfJewell,
That is true, but on a repair estimate , you were never that close anyway.
B.E.

You are judged not by what you know, but by what you can do.

RE: Self Employed Engineers-How did you make it happen?

Berkshire, I'm glad you were able to retire.

I provide engineering services, repairs/maintenance, and products. I finally arrived at no discounts. I am a business not a charity for someone else's business. I learned good companies don't ask discounts of small companies like mine. Whatever I quote, they pay. I learned on products the manufacturer always gets their margin and its the reseller or representative that takes the hit. I'm too small to take any hits.

I talked to some engineering companies that deliberately escalate the cost of a project for companies they know to be a problem. They don't want the business and there are some companies they refuse to do business with due to ethics. If they know you've been bad to them in the past or another company, they walk away. If only I had been so smart.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC
NSPE-CO, Central Chapter
Dinner program: http://nspe-co.org/events.php

RE: Self Employed Engineers-How did you make it happen?

lacajun,
Yes I made it out ok, I now sit back and try to tell those who will listen what I know if it will help them.

One thing I learned with insurance companies and customers was make sure that your name and the customers names are both on the check/ or draft as co- payees. About halfway through my career repairing aircraft, I had a repair for a fixed base operator.
At that time the insurance companies had a habit of making the final draft payable to the customer, so that they had the funds available for you when you delivered the aircraft.
Ok so I deliver the aircraft ,set it up, make sure the customer approves it, they say "Very good ,come in and get the check.", I go into the office and get presented with half the amount of the final bill. The first question of course is " Where's the rest?" the answer comes back , " I spent it.", it then turns out that he was struggling with the loss of revenue from having the plane out of service, and had spent part of the insurance settlement to keep the doors open.
We then made an agreement that he would pay me monthly until the bill was settled, which he did. This was a good outcome , which could have been far nastier had I just taken the plane back to the shop.
B.E.

You are judged not by what you know, but by what you can do.

RE: Self Employed Engineers-How did you make it happen?

berkshire,
I got this interesting bottom line, thanks for sharing.
Its I hope a good lesson for me (or us).

RE: Self Employed Engineers-How did you make it happen?

berkshire, thank you for sharing that. I'm paying attention.

Pamela K. Quillin, P.E.
Quillin Engineering, LLC
NSPE-CO, Central Chapter
Dinner program: http://nspe-co.org/events.php

RE: Self Employed Engineers-How did you make it happen?

Are you aware of the common payment arrangement for (other) construction work? Yes, engineering is construction. In any case, an initial payment as part of the issuance/acceptance of a contract is set forth in the bid. monthly invoices are sent for progress/percentage of completion. Those invoices are paid, less an agreed upon percentage (again, specified in the bid). Upon completion of the work (as bid), a final invoice is submitted, as well as a demand letter for payment of the retained percentage by a certain date, typically 60-120 days later, or upon approval for occupancy or declaration of substantial completion. There are often bonds issued and used for security of funding and payment.

That system is used, or a variant of it, by most competent business people where specified tasks are being performed, or items created or modified for others who will possess the finished product. Certainly differing types of projects and timelines and schedules require different payment schedules and security, but customers unwilling or unable to execute and adhere to such contracts are showing themselves to be a risk, and not behaving in a trustworthy fashion.

Those elements must be present for the secure execution of business; bid, progress, completion, both of the work and the payment. Don't let your project work interfere with your business work! These are like the laws of nature. Look at your own experiences of things gone awry, and figure out where they departed from that flow. Most often it was very early in the process.

.

(Me,,,wrong? ...aw, just fine-tuning my sarcasm!)

RE: Self Employed Engineers-How did you make it happen?

cm566...I've done it twice. The first time, I saw an opportunity to start a business because a couple of my clients only wanted me to work on their projects. They expressed that to me and I went to my boss and said I wanted to go out on my own and xyz and abc clients want me to do their work. It was far enough off the beaten path of the company's general work that my boss said good luck (he also told me "I hope you make just enough money to keep from starving!" lol)

I started and ran that business for 6 years and sold out to a former employer. I worked for that company and another until I just became tired of corporate BS.

The second time, I was relatively high in the company (Sr. VP, one of 4-person COO team) and the Board of Directors fired the President without (in my opinion) probable cause. I submitted my resignation a half hour later. I hate corporate BS, so in our company, we have none of that. I have only brought those into the company that need little or no supervision, have a like-mind with regard to corporate BS, are self-directed and self-sustaining. Each of them I've known for at least 10 years...most for 15+ years. We have been in this one for 12 years and remain busy and profitable.

RE: Self Employed Engineers-How did you make it happen?

How I started?
I had no choice.
Corporations and engineering companies alike basically treat employees as disposable commodities, and this trend worsens in direct proportion with increasing age and, by association, salary and value that one can otherwise bring to the table.
I figure, as long as those are the rules of engagement, then I’ll play the game on my terms.
rotw said it best.

Who is right doesn't matter. What is right is all that matters.

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