How to start an engineering firm: 7 essential steps
Learning how to start an engineering firm could be an excellent idea if you’re looking for a way to transform your profession into a profitable venture. While designing any business of your own takes significant time, dedication, and creativity, you can accomplish amazing things in this industry.
Whether you’re starting an engineering consulting business, or exploring a specific niche like mechanical engineering, the rewards of launching your own venture can be significant.
For instance, studies show in the US alone, engineering companies contribute around $600 billion to annual GDP, making a huge impact on the economy.
Starting an engineering business of your own is your opportunity to utilize your skills and talents in a thriving industry, while enjoying all the benefits of being your own boss.
With the right effort and a little planning, your engineering company could become incredibly successful, helping to shape the world we live in today.
Here’s everything you need to know about how to start an engineering firm from scratch.
How to start an engineering firm from scratch
The first step in creating any business is research. Engineering is a diverse industry, with a huge range of avenues to explore. You could get involved with civil engineering, mechanical engineering, consulting, or even engineering project management, depending on your skills.
There’s no one-size-fits-all strategy to choosing the right type of engineering company to build.
However, it’s worth starting with an assessment of:
What aspects of engineering are you passionate about? Defining your passions will help you to determine what kinds of services you’re going to offer clients, and provide an insight into the values that will drive your brand.
What kind of training and certifications do you have in the engineering landscape? Civil engineers, mechanical engineers and electrical engineers all have their own unique skillsets. Look at your educational history as a starting point.
It’s also worth looking at the wider engineering market, examining the potential profitability of different types of companies, trends in the sector, and any pain points your target customers might have that you can fill.
Engineering firm business ideas
As mentioned above, there are dozens of options to consider if you’re planning on starting an engineering business.
If you’re looking for a little inspiration, here are some great engineering firm business ideas worth considering today:
Product design and development
Engineering companies focusing on product design and development research their target market, before creating and refining products for a specific purpose.
You might help other companies with prototyping, testing, and refining product features, or you may create unique products for potential clients of your own.
Growing at a rate of 9.8% CAGR, industrial automation is one of the most exciting areas for a young engineer or entrepreneur to explore. It involves experimenting with machinery and technology to help other brands and engineering companies operate more efficiently.
If you’re interested in building your engineering services around transformative new technologies, robotics could be the best sector for you. As an engineering firm, you’ll work to create and refine amazing tools, enhanced by artificial intelligence and machine learning.
There are even degree programs you can take in this area.
If your engineering passions are linked to creating a sustainable, eco-friendly world, you could experiment with the sustainable energy industry.
Engineers in this landscape develop, install, and maintain products related to sustainable energy production, such as wind farms and solar panels.
The automotive engineering services market is expected to reach a value of $317.773 billion by 2029. In this landscape, you’ll combine elements of computer, electrical, and mechanical engineering to design safe and intelligent vehicles.
You may even experiment with the world of autonomous vehicle creation.
Consulting is one of the most popular business options for engineers. An engineering consultancy company provides guidance and problem-solving advice to other companies working on complex projects.
You’ll solve technical problems, share your business know-how and conduct research to transform company results.
Starting an engineering firm: Crucial steps
Once you’ve decided on the perfect idea for your engineering company, the next step is to start building your organization. Starting an engineering firm is a time-consuming process.
It’s not enough to simply choose a business name and design a website. You need to ensure all of the core components of your venture are in place to create a profitable entity.
Here are the key steps you can take to get started.
Step 1: Creating an engineering firm business plan
The first and most important step in starting your own engineering company, is creating a comprehensive business plan. Although it’s tempting to skip this stage when you’re excited to begin developing your business, a good business plan provides focus and direction.
Essentially, your business plan acts as a roadmap for your business, outlining your goals and objectives, how you’re going to make a profit, and who your target audience will be.
Aside from giving you some much-needed direction when you’re learning how to start an engineering plan, your business plan can also help you to attract funding from investors.
Most loan companies and investors will request business plans from smaller firms, to validate their work and ability to profit.
While the exact structure of your business plan may vary, it should include the following:
An executive summary
The executive summary provides an insight into your company’s vision, goals, and the strategies you’re going to use to develop your own engineering business. It may also include insight into the company’s values.
The service description page of your business plan explores exactly what type of engineer you’re going to be. It highlights your services in regard to structural engineering, mechanical engineering, civil engineering, or any other area.
Your market research section highlights everything you know about your market, such as your target audience, the competitors you’re going to be fighting for market presence, and the needs and pain points of your customers.
Organization and management
Here, you’ll outline your company’s structure, who will be in charge, your hiring strategy, and other factors related to your team. Make sure you address what each member of staff will be responsible for.
Within your financial projections page, you’ll explain how much money you can expect to make as a new engineering firm. Take insights from your competitors to determine how much you can reasonably earn in your first year and the years after.
Marketing and sales
Here, you’ll describe how you’re going to connect with your target market through sales and marketing techniques. You may include insights into which promotional channels and methods you’ll be using.
Step 2: Choosing an engineering firm structure
Once you have your business plan, the next stage in starting an engineering company, is figuring out your “legal structure”. This basically defines what kind of company you’re going to run.
If you’re starting a basic engineering consulting business from the comfort of your own home, you might choose to become a sole trader, or a limited liability company.
If you’re joining forces with another engineering expert to bring your business to life, you might form a partnership business, or consider operating as a corporation. The engineering firm structure you choose will influence how you pay taxes, manage your business, and deal with debts.
Keep in mind, your firm structure might change over time as you work on your business development strategy. You might begin as a sole trader with your own home office, before expanding into a limited liability firm, and then becoming a corporation.
Regardless of which firm startup structure you choose, make sure you get the right insurance to protect your business from liabilities. There are even insurance companies out there that specialize in insurance for engineering companies.
Step 3: Investing in the right equipment
Now you have your business plan and structure figured out; it’s time to start investing in the tools and resource you’re going to need to run your company. The tools you need to purchase when starting an engineering firm will depend heavily on what kind of company you’re going to be running.
If you’re building a firm specializing in construction engineering, you may need to invest in heavy machinery like bulldozers and excavators.
If you’re creating a consultancy business, you might focus more on software that will help you to organize your time, keep track of clients, and schedule business meetings with crucial teams.
How much money do you need to start an engineering firm?
Keep in mind, starting an engineering firm can be expensive, depending on your business structure and strategy. A mechanical engineering firm can have an average startup cost of around $19,267.
Make sure you have access to the right resources to invest in your company.
Most of the time, a new engineering firm will need to invest in a variety of hardware and software solutions, depending on their operations. Make a list of the services you’re going to provide, and the core tools you’ll need to operate, then research the market to find the best solutions.
Step 4: Registering your engineering firm
Depending on where you’re going to be starting an engineering firm, you may need to register your company with government officials, to ensure you’re complying with state and national requirements.
In the United States, companies are required to register with the government, and provide evidence they’re compliant with industry standards.
Registering your own engineering business will also ensure you can create a credible image for your brand. Most clients will check to see whether your company is registered before they contact you.
Before you can register your company, you’ll need to choose a business name. You can experiment with a range of naming strategies, from choosing an eponymous moniker, to a descriptive term.
The most important thing to ensure is that your name represents your brand and sticks in the mind of your intended audience. An evocative name will help to boost your branding efforts, and improve the ROI of your marketing campaigns.
Once you have your name, obtain an official trademark, and contact your government entity to complete the documents for registration.
How do engineering firms get clients? Creating a presence
Now you’ve dealt with all the legal components of getting your engineering firm up and running; it’s time to think about how you’re going to grow your venture and attract clients.
While the engineering landscape can be a profitable space, it’s also extremely competitive. You’ll need to think about how you can boost your brand visibility, position yourself correctly in your market, and attract the attention of new people looking to access your services.
Step 5: Developing a brand
One of the most important ways to make sure you’re going to stand out in your target market and earn new clients, is to develop a compelling brand.
A brand isn’t just a name and a logo, it’s how you convey your unique value proposition to your customers, and differentiate yourself from other engineering industry influencers.
Start by defining what your USP actually is. Do you have more years of experience than anyone else in your industry? Are you branching out into a new engineering field? Do you offer amazing customer service and support?
Match your USP to the needs of the client base you want to reach.
Once you have your USP, you can begin defining core components of your brand, such as:
Mission and vision
What is the mission or purpose of your company? What do you want to accomplish in your space, and how are you going to serve your audience? Your values and mission as a company will help to shape your service offering and marketing plan.
How are you going to present your brand in your industry? What kind of color palette will you use to showcase your brand essence, and what is your logo going to look like? Which shapes and images will resonate with your audience?
What kind of personality do you want to showcase to your audience? What kind of language will you use in your marketing message, and what do you want customers to feel when they interact with your firm?
Step 6: Building an online presence
Once you have the core components of your brand identity defined, the next step in starting an engineering firm is building a presence. Although it’s important to be active offline if you’re focusing on a local audience, most customers will search for your services online in today’s world.
The easiest way to get started is to work with a professional graphic designer, web developer, or web design team to build an engaging website.
Your site is where customers will be able to learn about your company, the services you offer, and your accomplishments in the engineering industry. Use it to showcase your extensive experience in the landscape, and how you deliver results for customers.
Next, think about how you can expand your presence through other mediums. For instance, you could consider joining engineering company forums and directories, to help drive new customers to your site. Or you could build landing pages to collect email and contact information from customers.
You could also consider showcasing your business on social media, working with key influencers to drive brand awareness and build your credibility.
Step 7: Create a marketing plan
While your online presence will give you a way to connect with customers in the digital world, you’ll also need to think about how you’re going to draw attention to your company.
When learning how to start an engineering firm, mastering marketing is crucial. If you don’t have any skills with promotional strategies, it might be worth reaching out to a marketing team.
The good news is there are various ways engineering companies can promote their business.
Some of the best options to experiment with include:
Use your social media presence to start building relationships with your target audience. You can use your social channels to draw attention to brand values, business accomplishments, and even testimonials from happy customers.
SEO and content marketing
Perhaps the best way to draw attention to your thought leadership and authority in the engineering space is with content and SEO.
Blogs and articles exploring common customer questions, and aspects of the engineering landscape are great for driving attention from customers, and helping customers to find you online.
While online marketing is crucial for today’s engineering teams, it’s worth thinking about your offline presence too, particularly if you’re a small firm trying to attract local clients. Consider using billboards, radio ads, and branded resources like vans to pull attention to your company locally.
You can also attend local events and expos.
Monitor the results of every marketing strategy you implement, to ensure you’re investing your money into the most effective resources for your company.
Tips on starting an engineering firm
At this point, you should have a good idea of the most important things you need to do when starting an engineering company.
However, there are still some useful tips you can keep in mind to improve your chances of creating a profitable business:
Know your value
One of the most important things you can do as a new engineering company, is define your value. Figure out what makes your company different to the other organizations in your industry, and ask yourself why customers should hire you.
Knowing your value will make it easier to create evocative and compelling marketing campaigns.
Regular networking is essential when you’re starting your own company. It will help you to find new team members for your business, as well as investors and clients who can help your company to grow.
Look into trade events and consider partnering with construction companies and other brands who can refer clients to you.
Get pricing right
Choosing the right price structure for your engineering company is essential. You’ll need to ensure you’re charging enough to earn a decent profit, without scaring customers away.
Look at the pricing and quoting methods used by other companies in your industry to get an idea of where to begin.
Deliver amazing service
Delivering an amazing customer experience is one of the best ways to make sure you can not only retain customers, but attract new clients too.
If you provide fantastic experiences to your customers, they’ll be more likely to refer your business to other clients, and give you new opportunities to grow.
Track your finances
Make sure you have a strategy in place for monitoring your cash flow. It’s crucial to ensure you can afford the materials you need to start new projects, and continue growing as a company.
The more carefully you track the money going in and out of your business, the less likely you are to encounter issues.
How profitable are engineering firms?
Now you know how to start an engineering firm, you might be wondering whether it’s really a worthwhile venture for you. Perhaps the most common question asked by any engineering entrepreneur is: “Do engineering firms make a lot of money?”
Unfortunately, there’s no clear answer to this question. Engineering firms can be extremely profitable, but the amount of money you make will depend on a number of factors, from your target audience to the type of engineering services you offer.
As a prospective business owner, it’s worth researching the market to determine exactly how profitable you can expect to be in advance.
Additionally, remember that taking the right steps to grow your own engineering firm can also help you to earn more money. An effective brand that engages customers will help you to earn more revenue from repeat and referred clients.
A great marketing strategy will ensure you can reach new leads and unlock a variety of opportunities. Additionally, investing in delivering amazing services and support to your customers will ensure your business can continue to grow.
Fabrik: A branding agency for our times.