Contact US

Log In

Come Join Us!

Are you an
Engineering professional?
Join Eng-Tips Forums!
  • Talk With Other Members
  • Be Notified Of Responses
    To Your Posts
  • Keyword Search
  • One-Click Access To Your
    Favorite Forums
  • Automated Signatures
    On Your Posts
  • Best Of All, It's Free!

*Eng-Tips's functionality depends on members receiving e-mail. By joining you are opting in to receive e-mail.

Posting Guidelines

Promoting, selling, recruiting, coursework and thesis posting is forbidden.

Students Click Here

Startup Cash

Startup Cash

Startup Cash

For those of you that have started and are successfully running a full time business doing engineering design work, and have a family to support, health care, mortgage, etc.;

How much start up cash did you have when you started? or asked another way, how many months could you go with no income when you started?

Would 9 months reserve be enough, if I already have a fully equiped home office?

Specifically, I would be doing machine design and project management, am a BSME and PE in my state with 20 years experience.

RE: Startup Cash

Are you starting with a backlog of projects and clients or are you starting from scratch with no customers and just a few contacts?

If you have a few projects to start on that will finish rather soon, and you think your clients will pay in under 60 days, then you may be okay.

A lot has to do with your burn rate on available funds.  If you can cut back, eat in, push off some larger expense, etc., then you can stretch out your 9 months of funds.

Make sure your business plan is written and sound.  Make sure you have accounted for all of the little expenses (licenses, software, code books, advertising).  Also make sure you account for only being about 60% billable due to marketing, bookkeeping, etc.

Finally, cashflow is king.  Write out your cashflows for the next 12 months.  All bills, expenses, business plan expenses, christmas, vacations, everything.  Then see when and how much money you need to fund that initial plan. Put in a buffer of 45 to 90 days to get paid by clients (unless you require some money up front). Project your sales from your business plan.  Check and adjust once or twice a week.

Got to add one more......get started!!  You will wish you had sooner.


RE: Startup Cash

Go for it.  There is a world of opportunity out there.  But be sure to Plan For Success, Prepare For Failure.

I did almost exactly what you are thinking (BSME, MSMfg, P.E. 20+ years experience).  After I got laid off with nice severance package when my industry collapsed, my wife & I decided "what the heck, every engineer wants to start his own business, why not give it a try?  If it doesn't work, then we can just start over."

I incorporated and bootstrapped a one-man show doing mech design & automation engineering and started with ~$20K cash for expenses, plus sufficient savings to live on for a while.  Did not get a business loan.  My wife was a stay-at-home Mom with our disabled child.  I had the business plan, marketing plan, list of contacts, computers, home office, stationary, business cards, brochures, website, phone+fax lines, highspeed internet, etc.  A month later while I was licking the envelopes on my initial work-solicitation letters, I was sitting in front of the TV in my underwear watching those airplanes fly in to the World Trade Center.  At that moment I told myself, "That's the death of my business."  Nine months later, my cash was gone and I had not billed a single hour of time to anybody.

After suffering through that degrading and highly motivating experience called "receiving unemployment" for a few months, I got a referral from my former employer to do some customer support consulting work.  After that, I re-named and re-started my business.  I spent 80-100 hour weeks beating the bushes, learned to get over my fear of cold-calling and asking for work, re-arranged my consulting offereings and pricing strategies, and started making a living during the worst recession the US has seen in 30 years.  It included teaching gigs at the local community college, contract work for low hourly rates, assistance from our church, and doing pretty much anything I needed to do to make a dime.  I didn't get rich during this time, but survived and lived pretty well because I cut my expenses to the absolute bone.  

The experience and change in attitude about work is wonderful and priceless for developing a customer-focused outlook and entrepeneurial spirit.   I'm full-time employed at the moment, consulting on the side, but I no longer have any fear of being unemployed.  Nor much patience with Corporate BS and the sniveling backstabbing weasels who live that life.

It can be done, but it takes a combination of savvy, luck, and lots of long hours of achingly hard, sweat-balls-dripping-off-the-end-of-the-nose hard work.


RE: Startup Cash

You should have abundant faith in yourself,family's support and ofcourse taking in all the bruises and cracks which will hone you into a good entrepreneur.

Do not be afraid of cold calls ,ideas getting stolen,orders getting passed off to competition right in front of you, accounts delaying release of payment for some stupid reason,peers in industry moving up the career ladder etc.

The end is always sweet and soothing. Once you dig yourself into it there is no boredom, monotony,fear of retiring or pink slip.

RE: Startup Cash

After the required capital cost to start, I had probably 4-6 months of operating budge when I started.

I didn't purchase right away. I leased or rented what I needed initially (to keep upfront capital outlay low) until I got going - then I bought. I also borrowed.

"Do not worry about your problems with mathematics, I assure you mine are far greater."   
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?

RE: Startup Cash


I have not started a business yet, but have done research and plan to do so in the next few years. I have heard that you should save up a years worth of salary before you go out on your own. Of course, this is all relative to mortagage/living expenses and what jobs, if any, you have lined up for your business.

Good luck.

RE: Startup Cash

Your cashflow depends on your expenses.  contact wwww.mpbconsultants.com  This consultant help us manage our company through a 2 year start up phase with very little need for cash.

Red Flag This Post

Please let us know here why this post is inappropriate. Reasons such as off-topic, duplicates, flames, illegal, vulgar, or students posting their homework.

Red Flag Submitted

Thank you for helping keep Eng-Tips Forums free from inappropriate posts.
The Eng-Tips staff will check this out and take appropriate action.

Reply To This Thread

Posting in the Eng-Tips forums is a member-only feature.

Click Here to join Eng-Tips and talk with other members! Already a Member? Login


Low-Volume Rapid Injection Molding With 3D Printed Molds
Learn methods and guidelines for using stereolithography (SLA) 3D printed molds in the injection molding process to lower costs and lead time. Discover how this hybrid manufacturing process enables on-demand mold fabrication to quickly produce small batches of thermoplastic parts. Download Now
Design for Additive Manufacturing (DfAM)
Examine how the principles of DfAM upend many of the long-standing rules around manufacturability - allowing engineers and designers to place a part’s function at the center of their design considerations. Download Now
Taking Control of Engineering Documents
This ebook covers tips for creating and managing workflows, security best practices and protection of intellectual property, Cloud vs. on-premise software solutions, CAD file management, compliance, and more. Download Now

Close Box

Join Eng-Tips® Today!

Join your peers on the Internet's largest technical engineering professional community.
It's easy to join and it's free.

Here's Why Members Love Eng-Tips Forums:

Register now while it's still free!

Already a member? Close this window and log in.

Join Us             Close