Starting Your Own Engineering Company

January 5, 2015

Featured in 2015 Guide to Getting an Engineering JobSome engineers chafe at working for others and need to be their own boss. Here’s what you need to know before striking out on your own.

The Pros and Cons of Starting a Business

The most obvious attraction is autonomy: you get to be the boss. On the other hand, you get all the responsibility and pressure. There may be nobody above you in the direct chain of command, but you’re responsible for the livelihoods of your employees and the future of your company.

It’s also a great opportunity to make money, much more than you’ll make as a manager or subject matter expert. This is because you are the one risking bankruptcy. Most businesses fail within a few years, and  you could find yourself with damaged job prospects. Be ready for that, and make sure your family is okay with it.

What motivates most people who start their own business is the challenge. It’s immensely rewarding when it you pull it off, but you have to be reasonably certain you’re up to it. Great engineers aren’t necessarily great CEOs.

What You Need to Know First

You need to understand what you’re going to do that will attract customers. “Understand your value proposition and ensure the market appreciates it, and will pay for it,” says Jeff Sweeney, founding partner and Chief Marketing Officer of East West Manufacturing.

Starting Your Own Engineering Company businesswoman Anna Bryukhanova

Credit: Anna Bryukhanova

Thinking in business terms from the outset. “Have a great business plan. Be detailed and honest with yourself, and make sure you have the funds. You have to think about finances first and foremost,” advises Andy Reese, Director of Business Development at East West. It’s essential to know where your customers are coming from, right from the outset.  “Having a credible background – an engineering degree and relevant experience – will show your competency and help you build trust with your clients.”

Todd Rhoad of Blitz Consulting expands on this. “There are a lot of areas that you’ll have to become proficient in to ensure success and that you don’t ever address during engineering school.  You need to focus on three things: operations, sales and finance.  Operations are about managing people and will often push your social skills to new heights.  You’ll never have enough time to manage your employees and bad employees can break a small business.  When it comes to sales, you’ll always be in sales mode and you’ll never have enough business coming in the door.  Lastly, finance will be critical as the flow of money in and out of the company will support all of your activities, such as salaries, operations, marketing, product development and sales.  As a new entrepreneur, your motivation will be challenged significantly as you’ll play all of these roles in your company.”

Sweeney emphasizes the importance of hiring the best team you can get. “It is not uncommon for our hiring process to last twelve months. You cannot compromise to get the very best talent. It is okay to be picky. We made hiring mistakes in the early days by being too quick to pull the trigger. When you’re in growth mode you don’t have always the luxury to make considered decisions.”

This approach has clearly worked for Reese and Sweeney. In 2001, East West had just five employees in the US and one in Hong Kong. Now, they employ 33 in their Atlanta headquarters, and over 500 worldwide.

Building Your Company into a Success

Once you have the team, the financing, and the plan, the real work begins:

Entrepreneurs must learn to delegate. It’s easy to fall into the trap of trying to do everything to save money, or because you think you’re the best person for the job. “You can’t do that,” says Reese.

Starting Your Own Engineering Company older businessman in meeting Tim Pannell

Credit: Tim Pannell

“When you’re in business, delegation is an essential skill. Be honest about your weaknesses, and bring in any skills you don’t have, especially in sales and finance. I had to learn business development very fast: like a true engineer, I watched what others did and copied them.”

Never underestimate the importance of sales. “The first thing you have to do is get customers,” stresses Reese. “Call up everyone. You rely on lots of word of mouth. Do lots of networking, go to lots of trade shows. But what really made the difference is that we found expert sales reps who were already selling to the customers we wanted to attract.”

Sometimes, those early customers can present a dilemma. “Make sure you know which customers you don’t want,” says Sweeney. “Make it very transparent what you don’t offer, so you’re not wasting time with the wrong people, or, more importantly, committing to something you can’t deliver.”

Long-term success depends on motivating your team. “Good engineers are very similar to artists and their motivation is a very complex problem,” says Yegor Bugayenko, co-founder of in San Francisco. “If you manage to create an effective motivation system in your new company, your engineers will be happy, productive and very effective. Otherwise, all your efforts may become a waste if you fail to motivate your team correctly.”

Sweeney and Reese concur. “Once you have the right team you must challenge them, and make them excited. At East West we do that by providing our engineers variety and latitude. Variety keeps the brain fresh, and latitude allows team members to manage their own projects while still achieving deliverables on time.”


Starting Your Own Engineering Company homemade drone Christopher Michel

Credit: Christopher Michel

Starting your own company can be terrifying, exhilarating, and liberating, all at the same time. Some days, you’ll wonder why you left a comfortable engineering job to spend your days worrying about payroll, sales, and overhead.

The rest of the time, you’ll be too busy to wonder about anything.