Are you planning to start a civil engineering consulting firm? In any profession, it is either you play an active role or play an advisory role. The same thing applies in the engineering field; you either become an active engineer that engages in fieldwork or start a consulting firm on engineering related issues.
We caught up with Dax Hoff, the founder and owner of Dax Consulting, a civil engineering consulting firm in Southern California. Dax will be telling you how he started his firm, grow it through business development, hire the right people and, of course, everything that you need to know if you are thinking about starting your civil engineering firm in the future.
How To Start A Civil Engineering Consulting Firm – A Full Summary
Dax has done something that a lot of civil engineers want to do, which is to work in the industry for a while for a firm and then transition and start own firm. He definitely would like to talk about that a little bit and about starting a firm and growing the firm.
Dax says “Like most civil engineering students, I had a couple of internships while I was in college and those were really helpful because I got a pretty wide variety of exposure in a couple of different kinds of companies and experiences and then when I graduated my first job was working for a large general contractor.”
“So I was in the field doing construction work and I was actually in Long Island New York at that time doing a project. I was there for two years and we’ve got a lot of field construction experience, which was really helpful and then I moved to California, which is where I had one of my summer internships.
At that point, I worked for a water company. I was on the agency side and then we did some projects like reservoirs and tanks and those kinds of things. So I was acting as the owner on that regard and then while I was there, I got my PE license and I eventually went into the land development world.
I’ve been doing consulting work ever since. I think a big part of that path to get to land development and then to where I am today helped. With a wide range of experiences early in my career in construction agency, I am able to create my consultancy firm and succeed.
I know from my career that the field experience is invaluable in terms of helping you to be the best civil engineer you can be. You know it’s much easier to design something when you know how exactly it’s built. So you can make things much more practical.”
Decision Making Process To Start A Civil Engineering Consulting Firm
Max worked for two different land development firms and as part of the process, not only was he doing design and proctor management but had a lot of business development to do as part of those jobs and so on.
Dax always knew once he had been doing all that for a while, he could bring in projects and get the products done. It’s definitely a big step to open your own firm and there’s a lot of risks involved. Dax says, “I thought about it for a while, but what helped me to do it was that part of it was out of my control because there was the recession and economic downturn and so like a lot of people, the company cuts you off.”
At some point, I was let go, but I had a bunch of clients that said you know if you aren’t at this company any more, we would hire you if you start doing firm. It was a good step to do it at that point and so I started my firm and of course, being in the recession it was very slow at the beginning, but the economy turned around.
I had great contacts that I had know from my previous experience and I was able to build all those workloads up from that point.
In my experience with the land development firms, I worked both for a really large multi-state company as well as a small family-owned company. So I had experience both with the big and the small firms and I’ve learned a lot of pros and cons of what things that either one of those companies did correctly or what things that I thought that they didn’t do well.
I learned from that experience as well as the actual project and running of the business experience. Doing those roles for both of those companies, I felt that there’s no reason why I couldn’t run my own company, doing those same things.
It’s just that when you first start, it is tricky because you’re getting going and you end up wearing a lot of hats when you first start, but I was confident that I could do it. I started the company formally in 2012, but it’s just kind of informally because I was doing stuff in 2011.
What Are The Pros And Cons Of Starting Your Own Civil Engineering Firm?
There are pros and cons of starting your own civil engineering firm.
Advantages Of Starting You Own Civil Engineering Firm
The first advantage is being able to structure your company in the way that you think is best. When you work for another company, they already have their protocols, formats and how they do work and everything else and you have to fit into that company structure.
When you form your own company, you can set your own structure and so that’s what I was saying when I said I learned a lot of really positive things that my past firms did and also learned from some of the things that I didn’t think they did very well. I tried to learn from both sides of that and so I replicated the things that I agree with and tried and fix the things that I didn’t think they did well.
Just as you’re going through your company work, you are learning from all those experiences (good and bad) and then trying to apply that if you own your company. Basically, what you’re able to do is you’re able to kind of design the company that you want based on all of your past experience.
Take the good experiences and flush out bad ones to create your own company. So it seems to be a big positive in terms of creating your own work environment and things of that nature.
Having your own business is a big decision, which is not bad because it’s all on you. Most of the time, you choose what clients you want to work for and how you want to manage the projects. You can make those kinds of decisions versus particularly if you’re with a really large company where you have some large corporate structure that set rules about how you have to do things and you have to fit within those boxes.
So that’s a big plus about owning your own business. You have that flexibility to do the projects and the type of work, who you want to work for and so on. You just have a lot more freedom to do those things.
Disadvantages Of Starting Your Own Civil Engineering Consulting Firm
The biggest hurdle for anybody starting the business is the initial transition. If someone starts a business now, even if the economy is good, you’re still going to have a big transition with projects and finances.
If, after getting your last paycheck from your own company and start your new firm, even if you already had clients set up, you have to work before you get into a billion cycles. You’re going to go several months without having any revenue.
Because of the initial transition, you have to make sure that you’re set up to be able to handle that financial situation of not having income for several months. Then make sure you have enough project experience because if you don’t start doing that business development until you’re out on your own, then that makes it more difficult.
Most of people both myself, as well as other people that I know that started their own business within engineering, have already had some kind of situation where they had clients or people they knew that told them that, hey I had a project coming up and if you had your own company I would go with you and those kinds of things.
For sure, it seems that the finances seem to be obvious, but it is a big risk you need to think through because you will have months, about three to six months of financial issues. Be sure to have enough in the bank to keep you going in terms of expenses and things of that nature before you get some regular clients.
That’s what you have to think about for sure and also in terms of finances. You know, a lot of civil engineers that work for companies have health benefits of 401k and they have things of that nature that also I’m assuming when you start, I mean no one’s going to have enough money to start providing health benefits.
Maybe you have to have a spouse that has health benefits of some sort or you’re not going to be able to contribute to a 401k. You’re going out on your own and get your own health insurance. When you have your own company but no one’s paying you sick time or vacation time or any of those kinds of things and it’s only getting paid for the work you’re doing.
The next steps as you grow the business with that whole financial is, as you get staff and have other people that are working for you and deal with how to deal with paying them as well as benefit situations and that financial cycle that your business operates in, you have to pay your employees but then you don’t get paid from your clients until you know whatever that time period is to invoice and get paid.
So there’s that lag time and you have to make sure you have enough cushion to be able to pay both hard expenses like office space, computers and those kinds of things as well as personnel and be able to cover your own expenses until you have enough finances coming in from your projects.
If you’re doing civil engineering and then all of a sudden you go and start your own business, you’re going to be doing a lot more than just engineering because you’re going to have to get involved unless you have the money to pay someone immediately.
You’re going to have to do every aspect of that business until you grow it enough to hire someone. But then, even if you hire someone, you’re not just going to be doing like engineering type things. You have to worry about reviewing the person providing benefits, making an offer and things of that nature.
Your new business is in its progressive and as you go through those steps, you’ll have enough work and enough finances to be able to add workers in, but initially, that is definitely a big step to be able to cover all expenses and be able to have the right people.
Hiring the right people is huge and that’s true when you’re with another company as well, but you have to have the right team around you.
So you need to learn a lot while you are with whichever company you’re at and think about going on your own. You need to know how accounting handles this, how does HR handle this, how do the IT guys set that and luckily, there are lots of companies you can hire. It’s not like you need to have a full-time admin, full-time HR, full-time accounting, full-time IT staff and all those kinds of things, but there are all sorts of companies you can hire on a part-time basis.
I don’t want to make this scare anybody off from starting their own company because I think it’s exciting to be an entrepreneur. But odds are – when you start your company, you can be successful if you work at it. Keep your expenses down at the beginning so that you don’t need a ton of revenue to keep yourself operational.
You might have to think about things like a spouse having health benefits and things of that nature. Just be financially savvy about it, but people can undoubtedly start a small civil engineering company out of their home for the first months or years even until they got off the ground and got enough revenue. While there’s a lot of risks involved, there’s certainly an upside.
How Do You Get Some Business As A New Civil Engineer Firm?
For me, I had a lot of people in the industry, including contractors, other consultants as well as developers that I knew and that work with me. Once they found out that I had started my own business, they were very helpful in being able to refer me to new clients.
Even if they didn’t have a project or maybe they had one and had hired me, they were still referring me to other people. So I have a couple of those contacts. The most important part of the business is having a huge network and that’s why I think it’s so helpful when you work for another company before you start your own.
When you build a whole network of these contacts in the industry and those people know you and you know them and you know not just the technical part of how to manage a project and do the actual engineering for the technical side, you are definitely going to be successful.
It is important to build your network from day one in your career as a civil engineer. Getting to know people at meetings, whether or not you’re working at different companies or working with different organizations, is important. The number of people you know through your project work, contractors, architects, engineers, surveyors and whoever would determine whether or not you start your should own civil engineering company.
That network will be invaluable because even if you work for a larger company, but want to grow a business unit, you are going to need it.
How To Hire Workers When Your Business Is Already Grown
When I first started, I was doing all my own invoices, doing billing and all that kind of stuff and then eventually, I had enough projects. Unless you’re going to be pretty large to have a full-time 40-hour a week, you might not need an accounting person at the beginning.
However, I found an accountant that got referred by somebody else. She does all my monthly invoices, books, taxes at the end of the year and all that kind of stuff. I just give her the direction of what’s a bill each month and then she does all that and takes care of everything and it’s working out really well.
There’s certain services like that that make a lot of sense. From the actual engineering side of it, the first few people that I hired were part-time people. The first guy I hired was a CAD designer and he was a guy who I worked with from my previous companies. I worked with four previous companies and he was a designer that worked my projects, but because of the recession, he had gotten laid off during that time and started freelancing for several different people.
I didn’t have any kind of commitment, like committing to 40 hours a week to him or anything like that. So he just worked my projects as I had him and when he did the work, it was great. Eventually, as I got more and more projects, I had to bring on more people, but some of the people I brought on over the years have been part-time people.
Even though I have some full-time people now, I like having the part-time people because it gives us a lot of flexibility. For instance, if five proposals I wrote last week all came in tomorrow, I could bring in more time for those people without having to hire somebody fresh off the street. If we had some other projects got canceled or delayed or whatever else, I could just keep my full-time people busy and not give work to the part-time people.
That is an important aspect of growing an engineering company. Being that the work can be so unpredictable based on the economy, funding that’s available, infrastructure funding and whatever the case is, it’s nice to have something you can turn on and turn off in terms of your labor and people that can help you.
Is It Recommended To Get Legal advice Before Hiring People?
I didn’t get any legal advice. I had a lot of experience when I was at my previous firm because I was in a role where I was hiring and unfortunately firing people – that’s my job as a senior project manager. Because I was running a lot of teams, I was in the decision-making role.
A big part of hiring is so much about relationships. The most successful hires are about people that you have the right rapport with and preferably ones you already know one way or another. Most of the people that work for me now are people that I worked with in one way or another previously. Some of them actually work for the same companies that I worked for before.
So I knew who they were. As we’ve gotten bigger, I have had to hire a few people by putting ads out and getting resumes and going through that, but that’s a much more difficult process. So if you know people out there that you’ve worked with before and already know that they have the right work ethic and technical skills and that they would be a fit for your company, that’s much easier than hiring somebody off a resume and a one-hour interview.
It all goes back to the network and the relationships we’ve talked about before. The same applies to growing your business by acquiring new projects and clients.
What Book Would Dax Recommend For The Growth Of Engineers
I do go online a lot and read articles, whether it’s a paper or online engineering related articles like from ENR and those kinds of things. I read Bill Gates’s book (The Road Ahead), which was probably 20 years ago and it was amazing.
To think about how many things that Gates predicted so far in advance of technology are coming about is amazing. But the point is, learn from somebody who is so involved in that field of the engineering business, that knows the industry and what the future held.
In our world, knowing what someone’s hearing is and where we’re going and how rules and laws are going to change what the economic future is and those kinds of things is really important. It’s essential to know where our business is going and where the development’s going in the future so you can prepare for it.
What we do now, whether technical things like how you manage storm, is different than it was 20 years ago. Also, things like what software such as AutoCAD does and what other pieces of software you use as you progress through the industry do now is going to be different than what they will do in ten years now.
Trying to think ahead and be innovative in terms of your career and your business is important because it can certainly differentiate you in the civil engineering world.
How To Be The Best Manager?
The best managers are the ones that are not selfish with their information. There are people in our industry and in other industries that will try to hoard their knowledge so that they’re the only ones who know something. If someone is good and confident in their abilities, you have no reason to do that.
The best manager I had were the ones that would sit down with me and say look, this is how I do this. When I first started, I had a boss who sat down with a gaming plan and showed me how to design a game plan, taking me to meetings and showing me how he talks to other clients and builds a rapport and those kinds of things that are important.
So the good managers are the ones that share that information to try and teach the people below them. If you’re good, you should expect that you’re going to get promoted and move up in a company and you want to have people behind you to fill in your spot when you move up.
How Would Dax Advice A Young Civil Engineer?
Dax says, “Don’t let yourself get pigeonholed into one specific task. Have a really wide breadth of experience and knowledge in your business and learn as many different skills and tasks as you possibly can.”