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New Design Business - Young and Restless

New Design Business - Young and Restless

New Design Business - Young and Restless

I'm 24, graduated from University about a year ago but have almost three years mechanical design experience because I started doing small to medium sizes designs for private clients from my second year in varsity. I know the three years experience is not much but I am very good at what I do and have won a few awards and graduated top of my design class. All my designs that are in operation, ranging from wheelchairs to mini 4 x 4's to hydraulic booms have been very succesful and my clients have been pleased with my services.

I now have enough cash to cover 3 months without any cash flow and have a small client base to start with. I am currently working for a small consulting firm and earning a fairly good salary and am not excessively unhappy with my job (just wanna create my own business and be my own boss). My question is: Should I take the plunge and start building myself and a business or should I keep doing the 8-5 thing for a few more years?. What is the worst that can happen.. I fail miserably and get another job, I have no dependants and very little debt. I also am extremely good with computers and the latest technology. Don't wanna seem too arrogant but it's good to know ones strengths as well as their weaknesses of which I have many. Any advise would be appreciated.

Note: I typically earn in 2 private jobs(plus-minus 40 hours) what I earn in a month in my current job(plus-minus 160 hours). Surely thats reason enough to go on my own.

RE: New Design Business - Young and Restless

If you have the clients to keep you busy then go for it.  My only concern would be that you build up your cushion further.  3 months doesn't seem like a lot.  I had closer to a year's worth money put aside when I started, but I had house payments to make (although I did have a wife who works, so it wouldn't have been a total catastrophe).


RE: New Design Business - Young and Restless

I would recommend being very picky on trying to find a great 8-5 job.  Look for someplace that utilizes skills that you would like to learn.  Specifically skills that you would see as useful in your consulting business.  Be it design, analysis, management, or business in general.  These are all skills that are essential for the successful consultant.  

Working on your own you may obtain these skills, but the path will probably be longer.  Continue doing the side work while you are doing the steady job.  Then step away from the 8-5 when you have nothing else to learn at the job.

Good luck.

Professional Engineer
Certified SolidWorks Professional

RE: New Design Business - Young and Restless

If you are in the US, you will need to have a PE license in your state in order to have an engineering services business.  See the many other posts on this and other forums about PE requirements and issues.

RE: New Design Business - Young and Restless

It sounds like the work you want to do mostly doesn't require a PE stamp.  You can start a design business without a PE, BUT in most states you can't have the word "engineer" in the company name or on your business cards.  That would be "holding yourself out to the public as an engineer" and is illegal without a PE.


RE: New Design Business - Young and Restless

Is now the right time? That is the question I think everyone asks themselves when considering setting up a new business. In truth no one on here will be able to answer that for you and you will only find out when you fail or succeed.

On the plus side you seem very confident, no bad thing, and have potential clients in place and very little debt, none would be far better. On the downside three months money is nowhere near enough. I can only speak for automotive in the UK but 90 to 120 days are very common payment terms so even if you finished your first project today you will be out of money before you receive a penny.

With the benefit of hindsight if I were in your shoes I would pick a date in the near future, say the start of 2009. In the mean time learn all you can about running a business, take courses or read up on accountancy, bookkeeping and the like. Build up as many contacts as possible, attend seminars and trade shows, know the competition and if possible what you are competing against in terms of price and services offered. Look out for bargains for items you will need, office furniture, plotters and the like you will be amazed how much cheaper things are when you do not need them now.

Speak to banks, accountants and anyone else whose services you will need and find people you are comfortable dealing with, this will save you much heartache later on.

Finally save every penny you can between now and then, cut out any luxuries and work every hour possible, this will give you the best possible idea if owning your own business is for you and if it is you will be in a far better position to make it work than you are now.

RE: New Design Business - Young and Restless

To add to ajack's comment about cutting back on luxuries and scrimping/saving...

Make sure you take a nice vacation just before you start the business... you may not get another for quite some time, and the last thing you want to do is live bare-bones for months/years by choice only to start a stressful business and be forced to live bare-bones due to money concerns.  You'll be stressed enough as it is, no need to prolong that stress into one, long road.

Dan - Owner

RE: New Design Business - Young and Restless

Dan I am not sure I agree with you there. The reason I said aim for early 2009 is that would give enough time to amount some money if you save hard, you will just have had the Christmas break and picked up any Christmas bonus paid out and also at least in the UK holidays usually end at the calendar year end so you may have extra days holiday or pay.

The difference between having savings earning interest and borrowing money is probably around 12% pa at the minute that is a huge difference. Also it is unlikely that any start up business will have enough assets to secure a lone so it will be against the person or personal possessions, usually a house, this of course leaves you in a far more vulnerable position should the worse happen.

In short any sacrifices made during this time will far outweigh those you would have to make later on, and sacrifices will need to be made. Having said that it does not mean you are wrong, just different ways of looking at the same thing.

RE: New Design Business - Young and Restless


Your point is duly noted, but I would gladly give up a week's salary of rest and relaxation if I was able to do it all over again.  I started my business a few months after being laid off.  I spent a number of hard weeks searching for a new job, interviewing, traveling, etc.  Then I moved from the New England area down to Florida as things were significantly cheaper.  Once down south, I immediately started the business, with zero time for relaxation.

I put in 60+ hours a week for a good year and a half, followed by 40+ hours a week for the next year before my business was at least self-sufficient.  The word stress doesn't even begin to cover it... I was at the ragged edge after those first couple of years.  I took another full-time job to make sure the large number of bills I had racked up were paid off.  You can't imagine the vacation I so desperately needed.

So, if I had to do it all over again... I'd waste a bit of dough for a few days/nights of pleasure.  Your productivity will be crap if you go into it with a bunch of stress.

Dan - Owner

RE: New Design Business - Young and Restless

If you are pulling in that sort of cash on the side, you must know about taxes and proper accounting principals.  As soon as you give up your day job, you will have to add to that self-employment taxes.  I may not change your mind but it will certainly make a difference when comparing your day job with the night work.

Don Phillips

RE: New Design Business - Young and Restless

I'm very glad I found this forum. Thanks for the many responses and the brilliant advice. Many questions that have been rolling around in my head have been answered.

My Response to:

bvanhiel: I still have a few jobs to keep me afloat for at least 3 months before i need to go into savings so essentially I have a 6 month buffer which does sound a little better than 3.

ShaggyPE: I have already spent a year in a consulting firm doing design work and have researched business,accounting,tax,licenses etc.. extensively in my current small business environment.

SWComposites,zdas04: I live in Soutb Africa and have established that I do not need a PE to do what I am doing now.

ajack1,macgyvers2000,DonPhillips: I have done a lot of research in small business administration,accounting etc.. and have a personal bookeeper who sorts out my tax and keeps all in order (yes i do pay tax on all income). I already have office furniture, equipment etc.. which was bought over the last few years from personal savings. I have done a ridiculous amount of research into the design engineering market and my services are defintely needed (huge shortage of engineering skills in South Africa). Have already setup a closed corporation and a bank account, fax, phone line,e-mail,website, and post office box.
Luxuries, haha,I spend what I have to, only when I have to, everything else I have goes into saving other than bare essentials. I already work 60 hours or more a week and love it.

Considering your suggestions I've decided to give my month's notice. The first month out of my current job will be spent finding more clients, basically networking (trade shows, visiting companies etc...) and doing jobs for current clients. I will go to a few interviews for design engineer positions and see if I can find a good 8-5 that allows me to develop my design skills further, if this is the case I'll work for another year building up skills and savings and work part-time with private clients.

But lets see, South Africa and engineering in South Africa is a different ball game. Will keep you posted.


RE: New Design Business - Young and Restless

Sounds like a great plan, and it seems you are well on your way.  One other suggestion regarding the 8-5.  Look for something that has flexible hours so you can easily take a day here or there to do your contract work (meet with clients during normal hours).  Also, as you transition, the 8-5 can become a client of yours.

Good Luck,

Professional Engineer
Certified SolidWorks Professional

RE: New Design Business - Young and Restless

Be aware that technical competence is merely the base line that clients assume all engineers have. Running a successful business requires much more than just engineering competence.

Have you had any jobs where things have gone wrong? This can happen even if did not make a mistake. When things go wrong, this requires an entirely different set of skills to sort them out.

RE: New Design Business - Young and Restless

Hi csd72,

I have had a few problems like payments not being made and clients interefering with design work and clients going against contractual agreements etc... But no major problems yet like refusal of payment or law suites.

I'm not going to be arrogant and say that I can handle anything and resolve all confilcts/problems but what I will say is that I am aware that I will encounter the problems and will take it in my stride, learning from them as I go.

I am pretty level headed most of the time and have held myself well so far, even facing a few MD's and CEO's of large corporations.

My most difficult challenge so far was convincing the CEO of a large construction materials firm here in SA to give me the job to design the air-conditioning system to replace the exsting one for his main support office. I eventually got the project and signed the agreements after presenting to him and his board members.
Here's the problem; after I had completed the design(plus-minus 40 hours work, well within time and design constraints) he stated that he was still not sure about going with my design(even after the agreement was signed), he argued about my age and lack of experience (which was kinda true). The main point is that my design was very good (later confirmed my varisty's thermodynamics lecturer and a few top guys in the air-con industry) but he still managed to find some reason to reject it. After much convincing and many meetings, he finally agreed and payed me and I handed over the design. Long story short, the system is in operation today and he is getting electricity savings(compared to the previous system) of 30%,less complaints about drafts on employees backs and the system is about 50% quieter than the last. Conflict resolved, everyone happy.

I hope every project I have in the future can turn out like that one.


RE: New Design Business - Young and Restless

Good thing your ship is sailing on.  You might also share some projects with more experienced associates, who can provide the level of reputation or 'fame' those tough CEOs are likely expecting from contractors. Of course you'll have to share profit, but you can get into more interesting projects, thus investing in a long-term reputation for your own company.

Good Luck!

RE: New Design Business - Young and Restless


Just discussed leaving my company with my boss about ten minutes ago. He was shocked, as expected. He was understanding, as expected (he's a nice guy). But what happened next leaves me with utter confusion.

First we discussed all the preparations I have made to open up my business and discussed all things like medical aid and insurance and debt and getting clients and experience, etc... I then explained to him that I feel it's the right time to leave and start own my own and told him that I am in the process of marketing myself and have a few clients to work with already. He was fine with all this...

Here's the shocker:

He said he doesn't want me to leave and that I am valuable to the company and I should just continue working for him and work on the few large projects that I have been working on as per usual BUT I SHOULD go ahead with my business plans and even use the companies resources to market myself and even start working privately during unpaid leave that he will authorise. All this while still working with the company and thereby reducing my risk (even discussed this with him) and still earning a salary. He also gave me the permission to leave and go on my own if I get something succesful up and running and start getting a lot of work in.

Like I said, utterly confused. Suprised, yes. Excited, I think so.
UNEXPECTED........definitely. ???????.

What are your thoughts, opinions (am I missing something?)


RE: New Design Business - Young and Restless

Nah, it is win win for him, and even better for you. Well done.


Greg Locock

SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.

RE: New Design Business - Young and Restless

Sounds like a very good (and rare) situation, but get what he said in writing.  Consider that your boss may get promoted or leave or drop dead or something, and you may have a new boss with different ideas.

Best of luck.

RE: New Design Business - Young and Restless

Congrats, just make sure and get the salient points in writing.

I left my company in the UK to come to the states.  My boss was great about it, he still had loads of work for me to do and for several months I worked in the US but for the UK company direct.  Then I worked as a contract for a few more months.

I had no real reason to doubt my boss on his word about what they'd pay me etc but none the less I made sure and agreed the salient points in writing.

Came in useful when one of the other directors started asking questions.


KENAT, probably the least qualified checker you'll ever meet...

RE: New Design Business - Young and Restless

I guess you must take advantage of it, don't hesitate.

I was in a similar situation some years ago, when talking with my boss about leaving the job for having my own business. Though shocked and rather angry for the bad surprise, he said "I guess you have no experience in that field. You should consider continuing working with us for some months, if things go bad", and offered me to continue being a part-time project manager, sharing some clients with the company.

I appreciated that, though he didn't allowed me to use my ex-desk for my business :P

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