By JAY LANDERS
Engineers who start their own consulting companies face countless challenges, from raising capital to marketing their firms to garnering clients—with no guarantee of success. Yet entrepreneurial engineers continue to go into business, looking to carve out their niches in the world. What does it take to succeed?
The consulting engineering firm stands at the intersection of engineering and business. To succeed, such firms must engage in the best practices of the two fields, excelling at the technical aspects of the profession while meeting client needs and managing their own internal affairs. While many engineers prefer to focus exclusively on engineering, others gravitate toward the business side of things. Still others form their own companies, taking a leap of faith that they have what it takes to navigate the two worlds.
What does it take?
spoke with business experts as well as several engineers who have started their own companies to find out.
In late 2017, Áine O'Dwyer, P.E., M.ASCE, launched Enovate Engineering LLC, a provider of construction management and transportation engineering services. O'Dwyer, the principal and chief executive officer of Enovate, took the plunge after working for about 10 years for a contractor and developer, an experience that honed her engineering skills while also opening her eyes to the business side of construction and development.
After several years of rising through the ranks—first as a field engineer, then project engineer, and finally project manager—O'Dwyer was asked by her employer to oversee engineering for the company. The experience would prove enlightening as well as rewarding. Working on local, national, and international projects, O'Dwyer helped shepherd many projects from start to finish. "I was working with owners and agencies to get some of these projects kicked off when they were in the early planning phase all the way to overseeing the work once it was in construction," she says.
This comprehensive approach "really opened my eyes up to a lot more of the industry than I would have seen if I had taken the traditional path" and focused exclusively on design work, O'Dwyer says. "All of a sudden I'm looking at projects differently," she notes. "There's the whole business side of projects. I saw all the different components that when you're just working as an engineer, maybe you don't get to see. It really intrigued me. I wanted more."
Eventually, O'Dwyer realized that she wanted to strike out on her own. "I wanted to take a stab at doing this for myself and seeing if I was any good at the business side of things," she says. "It was really interesting to me. I love being an engineer, but I love seeing how things work on a bigger-picture level."
For Michael Antinelli, P.E., M.ASCE, the motivation to found his own company arose from a desire to work on projects that otherwise were not available to him. In 2017, Antinelli and Alec Bogdanoff, Ph.D., an oceanographer and meteorologist, cofounded Brizaga Inc. Based in South Florida, the company helps clients, both public and private, address the effects associated with a changing environment, including sea-level increases.
High school friends who lost touch after graduation, Antinelli and Bogdanoff serendipitously ended up working together years later at a South Florida start-up firm that provided flood-risk information. After a few months at the start-up, Antinelli realized that the company was not a good fit for him. "Their mission and vision didn't align with my own," he says.
By this point, Antinelli had worked for different firms as an engineer with increasing levels of responsibility. In these positions, he noticed that the types of projects he ended up working on depended entirely on the efforts of the principals and business development staff at the firms. As a midlevel engineer, he had no say in the decisions. He decided that starting his own company would afford him the opportunity to pursue the projects that interested him the most.
For Antinelli and Bogdanoff, the "main driver" for starting the firm was the "realization that in order for us to work on the projects and issues that we really wanted to focus on, that was just what we had to do," Antinelli says. "We realized that we could start our own business, focusing on sea-level-rise preparedness in South Florida. It's an area [in which] we thought we could have a lot of impact."
However, the two cofounders and principals of Brizaga had their work cut out for them. "So much of the work that was being done in sea-level-rise mitigation and preparedness was being done by the most cutting-edge local governments," Antinelli says. Of course, local governments tend to have limited funding. "We recognized that the resources required to address sea-level-rise issues are significantly greater than any local government's budget can allow," he notes. "We wanted to figure out how to create public-private partnerships that would address some of these issues." This situation meant that Brizaga essentially had to drum up business among prospective clients who might not necessarily have been aware that they were positioned to benefit from sea-level-rise preparedness and mitigation. "We needed to go out and create that market, in a way," Antinelli says.
During the past three years, Antinelli and Bogdanoff have used their different backgrounds and areas of expertise to raise awareness about and promote solutions for sea-level rise. "We're an engineering company at our core, but our focus is a lot more on the development of public trust and public will for resilience projects overall," Antinelli says. "We wanted to figure out how to drive these kinds of projects by building public will on the private sector side of things and really get some force behind the reasons for doing these kinds of projects." To date, Brizaga, which has four full-time employees and works with two independent contractors, has consulted for more than 10 local governments and numerous private clients.
Erleen Hatfield,P.E., M.ASCE, AIA, had two main goals when she founded the Hatfield Group, a structural design company, in 2018. "I wanted to start an engineering firm that didn't currently exist," says Hatfield, the firm's managing partner. Working with Martin Finio, FAIA, the firm's design partner, Hatfield set out to create a company that would integrate architecture and engineering as seamlessly as possible. "The idea is we treat design and engineering as two components of a single process," she says.
Before starting the company, Hatfield was a partner for almost a decade at Buro Happold, after which she worked for 13 years at Thornton Tomasetti. "In my experience, the typical process is design then engineering," Hatfield says. "Architects created a vision and then handed it off to engineers to make it possible. What I was interested in is design and engineering working iteratively together at the project outset, so that we could find more ways to be innovative and find new structural approaches, to create different opportunities for our architect clients."
Hatfield's second goal was to facilitate the inclusion of women in engineering. "Equally important, I wanted to create a firm where ambitious and talented women engineers could advance in their careers," Hatfield says. "It's essential for women in engineering to see firms that are founded by women, led by women. We're committed to cultivating talented women and bringing them into engineering."
Katherine Latham, EIT, A.M.ASCE, also wanted to foster the involvement of women in engineering when she formed the utility engineering company Talman Consultants LLC, in 2016. "There was a need to bring more women to the forefront," says Latham, who is managing partner of the firm. "It's near and dear to my heart."
However, Latham, who had worked for another utility engineering firm, says that she was also driven to start her own company because she perceived a "need for improved project management." In her experience, engineering work often was "done in silos," she says. At the same time, advances in project management that could benefit clients were not being adopted as quickly as Latham would have liked.
"What I noticed was that oftentimes firms were applying older, less effective methodologies and approaches to their projects," she notes. As a result, the companies "failed to take into account the complex marketplace, the complex industry, the business models of the clients and their objectives," she says, particularly in the fast-paced arena of telecommunications. "I thought there was a way it could be done differently."
Rather than simply viewing itself as an engineering company that plays a single role in its clients' affairs, Talman Consultants works to "own a project from concept to construction," Latham says. "We are truly trying to be a partner in meeting their business objectives." To this end, we "take the time to understand our clients' large-scale objectives," she notes. To ensure that its designs are specially tailored to meet the specific needs of each customer, the company employs its proprietary planning approach known as RAMP (route analysis and mapping process).
Yung Koprowski, P.E., M.ASCE, created the transportation planning and civil engineering firm Y2K Engineering LLC in 2017. However, Koprowski had not considered the idea of starting her own company until a mentor suggested she should consider the option. "That's when the seed got planted in my head because I had never thought of that path before," she says.
The timing of that suggestion would prove fortuitous. After working for seven years at a small traffic engineering and transportation planning company, Koprowski decided it was time for a change. Although she received offers to work at large engineering firms, Koprowski began to seriously ponder the idea of starting her own firm. "Working at a small business, I had all the tools and skills that it took to wear all the hats necessary to start a company," she says. "I started thinking, 'Okay, maybe I can do this.'"
For Koprowski, many factors—some political, others more personal—influenced her decision to go forward with her plan. "I [wanted] to be a role model and to inspire and demonstrate to other young professionals and women and minorities it could be done," Koprowski says.
The allure of greater flexibility motivated Koprowski to proceed with her plan. "I had young children at home, so I wanted to be home more," she says. Meanwhile, an aging relative also required her attention. "Those were some aspects of my life that made me think about a career change," Koprowski says.
A natural disaster in his home country of Saint Vincent and the Grenadines prompted Daniel Campbell, ENV SP, A.M.ASCE, to start Caribbean Engineering and Design Consultants Ltd. (CEDCO) in January 2014. On December 24, 2013, a 500-year storm dropped torrential rains for many hours, causing landslides and significant flooding. Nine lives were lost. "That's a lot for a country of one hundred ten thousand people," says Campbell, who is one of several directors of CEDCO, which specializes in the planning, design, construction, and supervision of resilient buildings and sustainable infrastructure. Residences, roads, utilities, government buildings, agricultural areas, and forestry operations all incurred major damage, marking one of the worst natural disasters ever to befall the Caribbean nation.
At the time of the calamity, Campbell—then a student at the University of Matanzas in Cuba—was planning to start an engineering company, perhaps in 2017 or 2018. In the immediate aftermath of the calamity, Campbell and a handful of more senior engineers and architects who were former professors of his approached the government of Saint Vincent to inquire as to what they could do to help. When told they would need to register as a company to assist with recovery efforts, Campbell and his companions promptly founded CEDCO within three weeks of the disaster. "My company started earlier than planned," Campbell says.
For engineers thinking about going out on their own, the "number one thing is to really take a very hard look at the business of engineering," says Marcus Quigley, P.E., D.WRE, M.ASCE, the chief executive officer of the water resources engineering consulting firm Ecolucid and the technology practice lead at the Environmental Financial Consulting Group, which advises architecture, engineering, and construction firms. "Before starting anything, think end to end about the business side," Quigley advises.
"There are many opportunities in most firms to learn the business of engineering," Quigley says. "But you have to seek them out." Entrepreneurial-minded engineers need to get involved with budgeting and understand the types of internal metrics that professional services firms use and what they mean for the overall profitability of a business. "Professional services can look fairly straightforward on the surface, but 'return on working capital' is not something that rolls off the tongue of the average engineer inside a firm," Quigley says.
However, successful entrepreneurs need to know such financial metrics. "For most small businesses, the biggest challenge is not necessarily the capabilities and technical expertise they bring to the table," Quigley notes. "Obviously, those things are essential. But it's not necessarily the case of, 'if you build it, they will come.' You've got to run the business in a really effective way."
A common mistake made by engineers wanting to start their own businesses is "to assume that just because they're a good civil engineer, they're going to be a good business owner," says Anthony Fasano, P.E., M.ASCE, the president of the Engineering Management Institute, which offers leadership and people-skills training for engineers and other technical professionals. Such reasoning is mistaken. To run a business well, engineers "must have some type of business acumen," Fasano says.
To gain business knowledge, engineers can take courses and other training to ensure that they have what it takes to properly "think about the financial health of their companies," Fasano says. "What's the cash flow? How much money will you need on a monthly basis? You have to send invoices out on time and collect on them. You have to understand your workflow projections. You have to understand when and if you can hire someone. Or can you hire someone right off the bat? These are all things to think through and understand."
In particular, Fasano recommends that engineers find mentors, ideally people who have gone through the experience of starting engineering businesses. In this way, budding entrepreneurs can gain a better understanding of such challenges and how to address them.
Enovate's O'Dwyer benefited greatly from on-the-job experience with her previous employer. "I was given a lot of exposure to see how a company operates," she says. "I worked with the [chief executives]. I worked on the operations side of things. There were so many components that I was exposed to. I almost had a mini-[master of business administration] just from the type of work I was doing for them and seeing how all the pieces of operations needed to be put in place." For example, O'Dwyer participated in such activities as setting up joint venture companies and working on public-private partnerships.
At the same time, O'Dwyer realized that she needed to brush up on her business skills. To this end, she took a course at Harvard University on leading professional service companies, and she took a finance and accounting course at the Wharton School of the University of Pennsylvania.
Campbell, of CEDCO, relied on the business training he received during high school and at the community college and university levels. "I took [courses in] advanced-level business management, accounting, company management, and management of the investment process," he says. "That was a great help in terms of being able to understand how businesses work."
Rather than taking formal business courses before starting Brizaga, Antinelli took a more self-directed route. "It did require a lot of late nights and independent research," he says. "And a large network of people who have done it before."
Financing is another common challenge facing most entrepreneurs. Before starting businesses, engineers need to ensure that they have sufficient financial cushions to absorb the inevitable blows that can arise early on, Fasano says. "One of the biggest mistakes entrepreneurs make is not having enough savings financially," he notes. "You should have six months of living expenses in savings before starting your own business."
Such an approach worked for Koprowski, who started Y2K Engineering with personal savings of $30,000. "I didn't pay my salary for six months," she says. Working from home, her initial expenses were for her computer and related technology, insurance, legal support, and marketing. She has since re invested earnings back into the company to support its growth.
Latham also relied solely on personal savings when she began Talman Consultants as a one-woman concern. She also ran a lean operation. "For the first six months, I worked out of Starbucks," she says, before transitioning to temporary office space at WeWork. Today, her company has its headquarters in the iconic Chicago Board of Trade Building in downtown Chicago. "We've graduated to the big leagues," Latham says. Talman Consultants now has 50 employees and revenues of between $10 million and $12 million annually.
CEDCO received its initial funding from its six directors. "We basically had to start with directors' capital," Campbell says. "Each person invested into the company. It's very difficult to get start-up capital in the Caribbean." This approach has worked well, Campbell notes. "We've been very fortunate to be able to reinvest in the company as a means of financing." To date, CEDCO has not taken out any loans or lines of credit.
That is not to say that a loan or line of credit should never be used. Hatfield and her partner initially financed the Hatfield Group on their own. This approach was "maybe not the best way to start," she says. "We ended up getting a line of credit through a bank. That helped a lot with us being able to grow." A key factor in obtaining the line of credit was the extensive track record that Hatfield and her partner brought to the business.
Besides financing, landing clients can be one of the bigger challenges facing new engineering companies. "It was so much harder than I envisioned it was going to be," O'Dwyer says. "It was a lot of knocking on doors and getting our name out there." After O'Dwyer and the five employees she started with spent considerable time making connections and developing relationships, Enovate was selected for a project. "One company took a chance on us, and we performed really well," she says. Today the firm has 27 full-time employees and about 20 active clients.
For ethical reasons, the Hatfield Group started with "zero clients," Hatfield says. "That was because I wanted to make sure that I left on good terms with my old employer." Although it was the proper thing to do from an ethical perspective, the decision made starting the company harder than it otherwise might have been. "It's a little daunting to start an office with no revenue and no clients," she says. For anyone beginning his or her own firm, Hatfield recommends starting with a client on board, assuming it is ethical and professional to do so. "That way, you hit the ground running," she says. "It's a much easier, smoother transition if you have some revenue to begin with."
Because Hatfield and her partner had significant prior experience, they were able to draw on their previous connections and relationships to drum up business. That said, satisfied clients make for the best sources of new clients. "Word of mouth is our most powerful marketing tool," Hatfield says. With this in mind, "we really put emphasis on building long-term relationships with our clients," she says. As another way of getting her name and the name of her company into the public eye, Hatfield routinely speaks at conferences and other gatherings and writes articles publicizing the accomplishments of her firm, which has 12 employees.
After forming Y2K Engineering, Koprowski was able to attract her company's early work largely based on her strong reputation as a consultant in Arizona and her previous participation as a volunteer leader in numerous local transportation organizations. "The initial foundation of the company was based solely on me," she says. "That's how Y2K Engineering got started, through that reputation and a high-quality work product." The company quickly grew to seven employees by the end of its first year with the addition of engineers and leaders in complementary disciplines and project management. Koprowski credits her company's continued success to her talented team and company culture.
Starting and running a business can be enormously gratifying but also draining, Antinelli says. On the plus side, as a business owner, "you're accountable to yourself," he says. "I get to set my own rules." On the downside, however, the "scariest thing is being responsible for everybody else at the company," he notes. After a rough day, Antinelli occasionally wishes he could relax and take it easy. "Sometimes it would be really nice to slow down," he says. "But you can't take your foot off the gas."
Despite the stress, hardships, and occasional sleepless nights that come with owning businesses, the engineers contacted for this article emphasized the many positive aspects of starting and running companies. "If engineers have ever considered opening a firm, they should give it a shot," Hatfield says. "It's frightening, but the end rewards are well worth it."
Latham agrees. "If you have a dream, you have to go for it," she says. "To be able to build a company around what you love to do, and when you have a strong vision and a strong passion, to see it come to light, there's no greater feeling in the world."
Jay Landers is a contributing editor to
Civil Engineering, September 2020, © American Society Of Civil Engineers. All Rights Reserved