Almost everyone has dreamed of being their own at some point. People see entrepreneurs with flashy cars and huge homes and think “I want that too”. That includes engineers as well. There are many benefits to reap from owning a healthy, growing engineering business. But there are also many pitfalls. In fact, as many as one out of every three businesses fails within the first year. 50% fail by the second year, while 75% fail in the third. This may give you an idea of just how challenging it can be to run an engineering business or consultancy. However, armed with the right knowledge, you can try to account for the risks and create a successful and profitable venture.
Tips to Start an Engineering Firm
You might wonder, if so many businesses fail, why should you get into the world of entrepreneurship? What if you become just another statistic on the list of businesses that have gone belly-up? Isn’t it better to stick with the safety and comfort of a specific role? Doesn’t the success of engineering staffing agencies imply there is already a lot of competition? These are all very good arguments. On the other hand, there are also several good reasons to go for your own engineering business.
The biggest appeal is the level of autonomy it brings. You are in a position to follow your passion and do what you entered the engineering industry to do. That’s not to mention how business challenges can be a rewarding experience and an opportunity for growth. And, of course, the money you earn is a huge motivating factor to become the top boss. The list of reasons for starting an engineering business is endless, and you probably already know why you want to start your own gig. Therefore, this blog focuses on several tips to help you get started:
- Create and Understand Your Value Proposition
- Understand Your Business Needs
- Come Up with a Workable Business Plan
- Expand Your Professional Network
- Strengthen Communication in Your Business
- Learn the Financial Aspect of Running a Business
- Create Strong Hiring Practices
Let’s take a closer look at these below.
1. Create and Understand Your Value Proposition
When visiting entrepreneur websites and blogs, you will often come across the term “value proposition”. But what exactly is it? It refers to the value your business offers to your clients. In other words, your value proposition is what makes you different from competing businesses. It is very important to convey your value proposition to your clientele. In order to do that, you first need to understand it yourself. Give thought to what your business offers and how you can be the top choice for customers in your niche. This will help you identify your business strengths, which you can then use in your branding and marketing efforts.
2. Understand Your Business Needs
Engineering is a vast field consisting of many disciplines, including mechanical, chemical, and electrical engineering. Your business needs will depend heavily on what discipline or disciplines your business intends to work in. Whether it’s motivated talent, high-tech equipment, or simply just office space, you need to have a clear idea of what your business needs are before you can meet them. Making a list of business needs can help you anticipate them before they arise. That way, you can position yourself to meet these needs without having to scramble and waste valuable time and money.
3. Come Up With a Workable Business Plan
Your business idea is the seed that will grow into a real business. But your business plan is the framework that will ensure the seed grows into a healthy business. As such, how you intend to do business is just as important as the business you intend to do. Your business plan will define your goals as well as the route you will take to achieve them. When creating a business plan, it is important to be both realistic and meticulous.
For example, don’t think you will be able to compete with larger engineering businesses right from the get-go. But that doesn’t mean there is no room in the industry for you. You can always plan to start with smaller projects to build up a reputation and credibility. Similarly, you need to have a very good idea of how much capital you need before you start your business. You should also be aware of what your expenses and overheads will be, and what revenues will cover your business costs.
4. Expand Your Professional Network
While we are sure you can’t wait to quit your job and go into business for yourself, you might want to hold off on that resignation a little bit longer. Working for an established engineering firm offers several other advantages in addition to your salary and benefits. One of the biggest benefits of working with a professional firm is the opportunity to come into contact with other professionals in your industry. This is a chance for you to build your own network of clients and professionals. A professional network is something you can leverage to create inroads with future clients as well as gain diverse insights into the industry. The strength of your professional network can be a huge advantage when running an engineering consultancy or business.
5. Strengthen Communication in Your Business
Clear and frequent communication is the hallmark of any successful business. An engineering consultancy or startup, being a business, is no different. Organizations consist of employees and teams, who need to communicate with each other for effective and smooth workflows. Communication helps remove inefficiencies and uncertainties and is something that should be encouraged. Communication isn’t just limited to within your organization either. Most likely, your business will engage with external audiences and clients. That makes it even more crucial to have consistent and clear communication across the board. Otherwise, you could very well end up losing potential clients and earnings.
6. The Financial Aspect of Running a Business
Being an engineer is no small feat. You have likely studied hard, gained experience in your field, and stay up to date with the latest in the industry. Unfortunately, in the context of being an engineering entrepreneur, that may not always be enough. While technical knowledge and vision will play a key role in creating and running a business, so will other areas. You will have to educate yourself about other aspects of business, in particular the financial side. To run a business, you have to think like a businessman, and that includes understanding the numbers. You will have to familiarize yourself with spreadsheets, reports, and how the finance function works. Remember, money is the lifeblood of every business. You don’t want to be in a position where your finances can no longer cover your business needs.
7. Create Strong Hiring Practices
Finally, one of the most important ingredients of a successful, growing business is having the right talent. An organization’s strengths depend heavily on those of the individuals that constitute it. Having motivated and competent individuals on your team is absolutely crucial if you are serious about running an engineering business. That means you need to work on acquiring the best possible talent.
Of course, as an engineer, recruitment probably isn’t your area of expertise. You may be able to hire technical engineering talent, but you likely won’t do as well hiring support staff. That is why working with a professional staffing firm may be a good option. Even if you know nothing about IT, you can still acquire the best talent through an IT staffing agency. Not only does working with agencies get you the best employees, but it also allows you with more time to focus on the areas you have expertise in. Delegating responsibilities is an important part of being a business leader, and working with staffing firms is a good way to do that.