Operating Expenses: What It Costs to Get an Engineering Firm off the Ground
Running a business is basically operating expenses. If you invest correctly, you win, and vice versa. Unfortunately, it’s not a simple story as we just talked about. The harsh truth is that many businesses fail early on because they mistakenly invest in things that are not practical and do not bring profits. We are here to help you not to be one of them.
Point #1: How Management Tools Can Be Tapped into
In the EAC industry, projects and their deliverables are tangible entities that you exchange with the clients. In doing so, you spend time and energy on projects activities mostly every day. When it comes to project management, there are 4 major areas to consider.
Track your workflow on a management tool
As a project usually includes a lot of smaller tasks, the skill of project management is crucial to its success. It’s not a very good idea to track your project status on a spreadsheet or communicate via your email. Today, there are many innovative collaboration tools are designed and offered for project management, making your job easier and more efficient.
Asana has been used by NASA, Deloitte, GE, etc. Its pricing starts at $13.49 per user per month.
Monday has been used by Coca-Cola, Hulu, NHL, Universal, etc. Its standard pricing starts at $12 per user per month.
Trello has been used by Costco, Google, eBay, etc. Its recommended plan for teams is $12.50 per user per month.
Microsoft Planner has been used by Dell Technologies, Maersk, etc. It is included in Microsoft 365 products, a bundle package for your business.
If you want to handle project management more effectively, those recommended solutions will be great choices that you don’t want to miss. Each of them offers unique features that others don’t, so find out more about their products and choose the most suitable one for your business.
Store everything on the cloud for team collaboration
It’s nesecessary that you store all your company files and projects documents on the cloud, making accessible anywhere and to everyone. You can manage access level by user role based on your business structure. Nowadays, most engineering firms have a baseline drive for marketing, engineering, and administration departments so that all of their staff can easily access it. Cloud storage providers like SharePoint, Google Drive for Business, Box, and Dropbox are doing a good job at handling corporate files of all sizes.
Engineering projects usually require several team members who play different roles, such as project managers, engineers, and designers. In a dedicated sync drive with cloud infrastructure, you never have to worry that your project files cannot be accessed by other team members. There are some trusted options for your consideration.
SharePoint is a product bundled within Microsoft 365 package. You will have at least 2TB to 5TB of data storage depending on your plan.
Google Drive for Business is a product bundled within Google G Suite products, offering 2TB to 5TB of data storage for business plans as well.
Box is originally designed for business and has been used by Broadcom, MorganStanle, GE, etc. Its pricing starts at $12 per user per month with unlimited storage.
Dropbox is well-known cloud storage in the consumer sector and has been used by National Geographic, ASU, Dentsu, etc. Its pricing starts at $12.5 per user per month with 5TB of storage.
Manage budget with a bird’s-eye view
In the engineering field, project budget is an important factor that affects project outcomes. When tracking project status by budget spending is a method that most project managers use, a software with visualization of project activities by budget and team member billing becomes a must. You can use a tool like Harvest, which is time tracking software with project insights and visual reporting features.
Their pricing is simple and affordable, only $12 per user per month for unlimited projects.
Utilize flexible pricing program
When it comes to performing engineering works, it would be undeniable to use expertise tools from AutoDesk such as AutoCAD, Civil 3D, Revit, and many others. These tools help you design and develop your projects in a virtual format or a production called blueprint. This is probably the most worthwhile investment for your business to produce the actual work and deliver it to your clients.
Autodesk also has a Flex program that you can pay as you go with a token or subscription. With this program, you will be able to use a wide selection of Autodesk products without having to pay a significant upfront fee.
Point #2: Control How Your Back Office Interacts with the Outside World
Although internal operations are the core factor determining the survival of the business, the way the business interacts with external parties is equally important. Especially with clients or customers, who will bring profit to the company.
Let’s take a look at some ways to effectively build relationships with them!
Manage and track clients in a CRM platform
For business development purposes, your client contacts are the most valuable resource you have. In some engineering firms, professionals store their client contacts in the Outlook People list. However, it would be very inconvinient for you to follow the status with each contact and its business activities. Fortunately, CRM (customer relationship management) platform was born to manage all of it.
A CRM platform like HubSpot is very common as it offers free standard CRM features. Besides, Salesforce can also be a great choice for your business.
Make use of email services for business communication
When you first start a business, all of your client correspondence should be consistently in business format. It implies that you should have a domain name that is specific to your brand. If general emails provided by Gmail, AOL, Hotmail, and Yahoo should not be used, what is the solution?
We have Microsoft 365 and Google G Suite, the products from two software giants that provide email service for business at affordable monthly subscription. When you sign up for their business suite, you have all access to various essential sources like cloud storage, office apps, and more.
Arrange appointments through a booking scheduler
It’s easy to understand that the scheduling process with your potential clients and existing clients is very daunting as back-and-forth confirmations between both sides tends to be wasteful. To make it better, you can make use of scheduling applications that integrates with your calendar to help recipients find and schedule times that work for you.
In case you are already subscribed to Microsoft 365 standard business plan, then Microsoft Bookings is already included and costs nothing.
For another choice, Calendly is a trusted one as it has been used by eBay, Dropbox, and major Fortune 500 companies. Its pricing starts at $10 per user per month for a team plan.
Give cloud-based phone setup a try
Cloud-based phone systems are becoming more popular as the business world becomes more digitized and offers internet-based services. If your company is currently experiencing or expects to see constant growth, a cloud-based phone system offers an excellent choice for easy and efficient scaling. It allows you to add phone lines, extensions, advanced features including call transfer, multilevel auto attendants, and call queues easily without hiring a professional or paying for more equipment. Furthermore, it also goes for maintenance as all updates will be done in the cloud, saving your time and money.
While using the Microsoft 365 package, you might want to utilize the add-on product Microsoft Teams Voice in Microsoft Teams chat at just $15 per user per month.
RingCentral is another great provider for you to consider. It has been used by SoFi, Carvana, the City of Williamsburg, etc. Its pricing starts at $29.99 per user per month.
Point #3: Be compliant with the laws and stay away from avoidable risks
In addition to finding ways to operate as efficiently as possible, you also need to think about the legal actions that must be taken and prevent the worst cases that may occur in the future.
Get your practice license when it comes to public safety
In the United States, registration or licensure of professional engineers, architects, and engineering practice is governed by the individual states. Each registration or license is valid only in the state where it is granted. Some licensed professionals maintain their licenses in more than one state. To deliver projects to clients, your firm must have at least one individual with licensure to seal projects.
The cost and requirement of renewal for professional licensure are different from each state. You can check out your jurisdiction by visiting the state board of licensure for architects, engineers, and land surveyors.
Have peace of mind with a dedicated legal team behind
Once you work in the EAC industry, you will be involved with legal activities one way or another. Some projects require seal, legal certification, agreements review in order to move forward. Meanwhile, hiring a dedicated attorney for consistent legal support is expensive and not very practical to most engineering firms. Keep calm, because now we have flexible solutions within the legal space.
BizCounsel provides 360 degrees legal scan coverage to protect your business. Its all-in-one legal solution offers monthly subscription and the pricing starts at $199 per month.
Alternatively, Sixfifty offers many legal documents solutions on demand and has been used by Nissan, ING, Zippo, etc.
Take out insurance to be protected
Carrying insurance to cover your business assets and your clients will be a safe way to protect you from any liabilities that may arise. The risk of not having business insurance coverage could end up costing your business way more than the monthly premiums would. It might not be the best move to not purchase insurance simply because it isn’t legally required. For instance, if a customer slips and falls on your property, injuring themselves in the process, it typically costs up to $20,000 to settle a subsequent lawsuit.
Instead of worrying about the worst-case scenario and suffering the dire consequences when it actually happens, you can rely on business insurance solutions from Embroker and Hiscox. Their products have been used by Financial Times, IBM, Wall Street Journal, etc.
Point #4: Investment in Workspace Is Never a Waste
It’s proven that people tend to become more productive if they are given a good workspace. Therefore, investing in the working environment also means investing the working outcomes.
Check out pressure-free workplace solutions
Committing to a long-term lease arrangement for your workplace while you’re just getting started can be difficult, especially given the cost of renovations to meet your specific demands. The process of establishing a safe and compliant office before relocating your workforce can cause operation delays in many ways.
Workspace settings in the EAC industry would be a bit different from other professional service firms. You might need more space for particular needs such as collaboration space on engineering drawings, plotter room, etc. An office lease will offer you a better option for space and cost tailored to your need. There is no one-size-fits-all solution at the early stage. You should assess the trade-offs between your new built-office with lease commitment and flexible office solutions, and make your final decision.
In case you end up with the second option, the flexible office solution offered by Industrious or Wework is really worth checking out!
Build workstation available for the remote team
Every business requires some basic equipment and supplies. Before adding equipment expenses to the list of launching costs, you have to decide whether or not to plan for a remote option.
It’s important to think about how to build a workstation that can support your business workflow from anywhere. Engineering businesses frequently set up non-portable workstations for their employees because they think the employees will only work in the office. While others believe that desktop workstations will provide better performance for their requirements. We have conducted our assessment for both, in terms of cost and production outcomes. And the mobile setup always wins.
The workstation setup offered by Lenovo or Dell will make you and the whole team become very productive both in place and remotely. You simply need a laptop, extra monitors, keyboard, mouse and a dock to connect all the external devices.
Point #5: Implement Brand Strategy in Any Stage
We are living in the era of marketing and communication, hardly any business can succeed without branding. If handled well, branding would influence people’s perception of your product or service, so they will choose your brand time and again.
Develop a close rapport with audience through email marketing
The most cost-effective form of marketing is email marketing. You completely control how you want to interact with your audience. Sending weekly news or tips to your audience helps you build a sustainable relationship with them. Don’t see your email marketing activities as a service pitching opportunity as people hate to be pitched.
It takes time to build an audience, requiring your investment in the website. What are the values you bring to the table, and why should people visit your website? Just imagine how people give goodwill to come to news or media sites like Bloomberg, CNBC, Vox, or YouTube.
Using an email marketing platform like Mailchimp can help you manage your audience with 360 insight view. Its pricing starts at $11 for 500 contacts.
Constant Contact is another good choice for you. Its pricing starts at $20 for 500 contacts.
Raise your brand authority voice by the online presence
The digital world has become the primary mode of communication. The more well-known you become inside your sector, the stronger your brand, reputation, and recognition will become. This effort can help you position yourself as a thought leader in your profession, with valuable insights and ideas to share that others can benefit from. This is known as pre-proposal activity, and it contributes to your overall sales cycle’s winning score.
It takes time, work, and expertise to create and manage a website as your own brand image. While big companies in this top 100 from the ENR list have the resources to invest in their brand, smaller companies might find it hard to allocate the resources for branding investment.
Adopting an online presence management system will assist you in achieving the outcomes that demand a professional marketing and technology team, such as those found in large corporations.
Point #6: Little Things, Big Results
While you are absorbed in focusing on large areas of work, you can forget about the very small factors that make everything a lot easier everyday. We’re going to remind you of two things that can be easily overlooked.
Protect your corporate credentials
We have seen engineering firms store corporate credentials like shared usernames, passwords in a spreadsheet and shared among team members. This is really dangerous in terms of security for staff and the company. Moreover, not every staff has the same level of authority to access critical resources.
A password management platform offered by LastPass can help you share credentials with a team member in a safe way. Its product has been used by CNN, New York Times, The Economist, etc. with pricing starts at $4 per user per month for the Teams plan.
Effective finance tracking goes with proper accounting
Cash flow tracking and business financial activities should be conducted on a weekly basis. Accounting is an admin task and it’s time-consuming, so using an all-in-one business accounting platform offered by QuickBooks would be a smart investment.
The Bottom Lines
Launching a new engineering firm will simultaneously be terrifying, thrilling, and liberating. At times, entrepreneurial engineers wonder why they left a secure and well-paid position to spend nearly every waking moment worrying about business administration, licenses, rent, and countless issues beyond their prior responsibilities. Today, starting up a business is becoming much more easy as there are so many free resources around. Whatever type of business you want to start, the industry will generally have a professional body managing the interests of its members, providing you with assistance and guidance.
You Might Also Like: