8 Tips for Starting an Engineering Consultancy
Everything You Need to Know about an Engineering Consulting Firm Startup
Starting your own business is difficult. In fact, some estimates state that a third of new businesses fail within their first year of operation. It doesn’t get any easier from there. Those numbers increase to half by the end of the second year, up to three-quarters in the third.
This may put you off starting your own engineering company. After all, if so many businesses are doomed to failure, why should yours be any different?
Well, the fact is that you can make your engineering consulting firm startup a success. You just need to know how to do it. On a general level, you need a mix of ingredients. Talent is the most important. Without talent, you won’t be able to get very far. After that, you need a great passion for the engineering industry. This is what will push you to keep going when times get tough, and you feel like all you do is work. Combine that with some luck and business know-how, and you have as good a chance as anybody of succeeding in starting your own engineering company.
This article aims to help you along the way. But first, let’s take a look at some of the reasons why you might want to create an engineering consulting firm startup.
Why Start an Engineering Consultancy?
That’s a good question. After all, it’s only natural that you want to avoid becoming another statistic in the list of failed businesses. Why take the risk when you can just settle into a regular engineering job?
The main reason is autonomy. Starting your own engineering company offers you more control over the work you do. You get to decide which projects you take. As a result, you’re in a better position to follow your engineering passions and do what you entered the industry to do.
Of course, pressure is the trade-off. If you don’t deliver what you promise, you will lose clients. However, many people find they thrive under this pressure. Plus, there are few things that can compare to the sense of achievement you enjoy when you know you’ve done something right without the safety net of an employer. The challenge is rewarding in itself, plus, you may find yourself wondering what might have been if you hadn’t taken the plunge.
Then, of course, there is the money. Most engineering business owners discover that they can make much more money working as a consultant than they could as part of a company. Yes, the chances of failure are high. However, there can be no reward without risk. If you take your chances and the gamble pays off, you set yourself up for a much more comfortable life.
So let’s assume you’ve decided to create an engineering consulting firm startup. What do you do next? Follow these tips to improve your chances of success.
Tip #1 – Know Who You Are
Have you ever heard the term “value proposition”? This phrase relates to what you have to offer that makes you different from everybody else. Your value proposition tells your clients what they can expect when they work with you. It also defines the company’s values, which you can use in your branding efforts.
It’s crucial that you understand your value proposition because it is your key to attracting customers. Work out what you have to offer to the market, and make sure there is a niche for your company.
Define your value proposition before you create your engineering consulting business plan. Think of it as the starting point from which you will develop the firm. Write it down and make your value proposition your mantra.
It really could be anything. Perhaps you provide superior customer service, or you use technologies that other firms don’t. Whatever it is, your value proposition should be front and centre in any materials that relate to the company.
Tip #2 – Know What You Need
Engineering takes in all sorts of disciplines. For example, mechanical engineers build things for their clients. Civil engineers focus their efforts on improving the environment, whereas electrical engineers concerns themselves with the safety and quality of electronic products.
There’s a reason for mentioning this. Each type of engineer needs different tools to do their jobs properly. It’s likely that you will see projects through from design through to prototyping and completion.
Do you know what you need, to do that? At the same time, do you know where you can get what you need?
These are questions that you need to answer early on in the process. For example, you’ll need to research where you can buy and learn about the digital design software that will help you to create great models. Maybe you’ll also need a 3D printer so you can create prototypes of your designs.
Every engineering consulting firm startup needs to invest in the tools and materials it needs to do its job. Do some research and network extensively. Take advantage of any opportunity you have to get what you need so you can get your engineering consulting firm startup off to a good start.
Tip #3 – Create a Strong Business Plan
Your engineering consulting business plan is the detailed outline of what your business does, and how you plan to achieve your goals. The key is honesty.
You need to look at what you have, and how this will help you to achieve your goals. Be realistic about your starting point, as well as the level of competition you will face. You may not be able to compete with the established names in your industry. That’s okay. It just means you have to focus on smaller projects until you’ve developed your reputation.
Your finances should be at the forefront of your thinking. Understand how much you need to invest in the company to get it started. Furthermore, don’t be too liberal in terms of your projected earnings. This may inflate your expectations to unrealistic proportions, which could lead to spending in areas where it isn’t needed.
Finally, understand what your customers want. Your engineering consulting business plan is where you’ll start developing your marketing strategy. As such, you need to understand what your customers expect. You’ll need a relevant degree and some experience. Use your business plan to figure out how you can use these tools to demonstrate your experience.
Tip #4 – Start Making Connections
It’s never too early to start making connections with engineering industry influencers. You can start building your network from the moment you decide to start your own business. You don’t even need to have your engineering consulting business plan in place to network.
Local industry events will allow you to get in touch with people who could provide you with opportunities. It’s not just those in your industry that you should pay attention to, either. Talk to people of all professional backgrounds. You never know who may have a nugget of wisdom to share with you. Plus, you may find somebody in another industry has a business opportunity waiting for you to capitalise on.
Social networks also allow you to connect with more people. Use LinkedIn to share your ideas and connect with key influencers. It’s all about building your reputation with the right people. Network often and well, and you should find opportunities come your way.
Finally, never forget the follow-up. If you meet somebody, make sure you email them the next day. This shows that you took the interaction seriously, and opens the door for further discussions about business.
Tip #5 – Get Your Quoting Right
One of your engineering consulting startup firm’s toughest tasks is getting its quotes right. This shouldn’t come as a surprise. After all, your firm is new to the industry, and you may never have had to quote a direct price to a client before.
So many factors come into play here. You need to understand what others in the industry are charging, so you don’t go too far above or below the standard. You also have to take the client’s budget into account. Sometimes, a client who can’t spend much now could clear the path to other opportunities. However, you also cannot allow others to take advantage of you.
The best thing to do is ask what others in the industry have done. This is where your networking efforts will come to fruition. Every engineering company was a startup at some point, so ask those in the know how to go about quoting for projects.
Tip #6 – Communicate Constantly
An uncommunicative engineering consulting startup firm won’t get any business. You should keep in touch with anybody who your firm has connected with. You must develop your relationships with new clients while ensuring that any questions your current clients have get answered.
It’s a tough balancing act, as communicating takes time away from your other work. However, it’s one that you will have to manage if you are to find success.
You also need to account for different client preferences. Some will want regular updates on the project’s progress, while others are happy to let you get on with things. Your firm’s communication strategy must adapt to the needs of the client.
Furthermore, be honest in all of your communications. If you need to inform a client of a delay, it’s best to do it honestly and get it over with. Trying to cover up mistakes or issues shows a lack of transparency. If your clients pick up on this, it may ruin your firm’s reputation.
Tip #7 – Define Your Hiring Practices
An engineering consulting startup firm is only as good as its employees. If you don’t define your hiring practices, you run the risk of bringing the wrong people in. This can lead to churn, which results in your firm losing money.
The key to good hiring is to take your time. You may feel like you need to rush the process, especially if your firm is in a growth period. However, rushing leads to compromises, which means you don’t get the best talent.
Instead, take a step back and think about what your firm really needs. Ask yourself where the knowledge and skill gaps are. You can then use this information to shape your hiring decisions.
Also, consider every candidate’s future prospects. The person with the most skills right now is not always the best hire. If that individual is untrainable or doesn’t fit the company culture, you may find the working relationship falls apart. Talent is important, but so is a candidate’s ability to integrate into your firm.
Tip #8 – Never Forget the Finances
Most people form their engineering consulting startup firms because they have a passion for their work. This is a crucial element for success, but you also need to be business-minded. Failure to focus on the finances could lead your company to ruin.
Your company’s cash flow dictates what it can do. If you don’t have any capital coming in, you may not be able to afford the materials to start new projects. You also need money to fund marketing efforts and employee salaries.
Furthermore, you have to know what’s going out. If you don’t keep track of your expenses, they can spiral out of control.
Focusing on your finances may add extra hours to your workday. However, it’s a sacrifice you will have to make to ensure your firm’s success.
Starting your own engineering company is not easy. You’ll have to overcome a lot of hurdles just to build a reputation for yourself. Your output must be of a high enough quality to attract new customers, plus, you need to keep an eye on the administrative side of things.
ArchiStar Academy can help if you’re starting your own engineering company. We run several digital design courses, as well as Business Development, Marketing and Finance courses. We provide some of the industry’s leading 3D modelling packages. ArchiStar Academy can be your source for the tools you need to get started.
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Posted on 10 Dec 2018