Hanging out your Shingle: Going into Business as a Sole Proprietor or Independent Engineering Consultant

By Joseph Lampinen

Perhaps you have recently graduated and are deciding between looking for fulltime employment or going into business for yourself as a consulting engineer. Or maybe you have been employed for some years and you want to strike out on your own as a sole proprietor. In either case, you would be wise to carefully consider the following questions before committing to one course of action.

• What is your engineering specialty, and is it in demand? What are you good at, do you enjoy doing it, and is there a market for it? If you are planning to work independently, you are best advised to build on your strengths, as the market is highly competitive. In addition, you need to make sure there is sufficient demand for your specialty. For example, a civil engineer who specializes in bridges will likely find it easier to get projects than an engineer who designs mouthpieces for instruments.
• How will you connect to customers? When you work as a free agent, you will have to attract your own customers by means of networking and/or marketing. Note that if you work as a consultant through a staffing agency, the agency will find business for you. In addition, it will take care of considerations such as liability insurance, professional licensing, and marketing. For this reason, some engineers choose to work through a staffing agency early in their careers until they have built up more experience and a bigger network.
• How will you connect to consultants? If you are a sole proprietor and you land a big project, you will likely need more hands on deck. While you can find consultants through your network, there may also be value in working with a staffing company that can provide additional resources so you can scale up your operations and respond to customers’ needs. In fact, there are staffing firms that provide entire project teams for these types of situations.
• What are your business prospects? When you strike out on your own, it is wise to develop and implement a business plan — one that helps ensure you have a steady stream of projects and as a result, a reliable income. You might also want to consider growing your business by adding more people at some point in the future.
• What are your professional prospects? As an independent contractor or sole proprietor, you want to ensure that you still develop and advance professionally. Consider how you will fund your professional development, as well as how you will gain access to interesting projects that help you build experience and expertise.

If you value independence, freedom, flexibility and ownership of your career, then being a sole proprietor or independent consultant might be right for you. However, before making any decision that cannot be reversed — such as leaving your current job — take the time to really do your research to determine whether there is a market for your services and, of course, whether the free agency lifestyle is right for you.