I delight in those engineering professionals who have set up incredibly successful businesses (but am saddened by those – the majority – who have failed). In these tough times, I do believe that for our economies to grow we need far more entrepreneurs providing services and products that improve productivity (including safety). The spin-off will be the employment of more people and more opportunities for engineering professionals to practise their skills. Engineers, being highly creative (and making things that are ultimately useful), have an incredible role to play here.
But you can’t suddenly decide to become an entrepreneur. You have to have a genuine passion for a product or service and be prepared to persist. You may have such a brilliant service or product which you reckon has great possibilities and which tempts you to head out on your own. Importantly, though, becoming an entrepreneur does not necessarily entail striking out solely on your own. You can often do it within your existing company structure – genuine owners of businesses delight in welcoming like-minded engineering professionals to extend their businesses with new products and services.
Be ruthless about whether it is a feasible product you are proposing. Many companies have not been able to survive as their key products, whilst useful, have simply never been viable business ventures.
Some suggestions for you:
As engineering professionals we tend to focus on the technical aspects of the product. This is what gets us excited. However, it is the ‘filthy’ business case on which we need to center our attention – “Can this product or service be sold to make money?” - the overwhelmingly important question before launching an idea. Engineers often neglect the business factors as they are less interesting. Sadly, the market will not beat a path to your door because ‘you have designed a better rat/mouse trap’. Ideas are a penny a dozen - it is the business strategy and plan that is critical.
A business plan defining your product and strategy is absolutely essential. And it should fit on a single sheet of paper with all the key thoughts worked through and built in here. If you can’t explain simply what you are doing in a few words to your grandmother, it is probably going to be difficult to make it work. Items to be included in your business plan include; those aspects of the product that are unique, why you will be able to sell it, who your competitors are, the costs and predicted revenue, the cash available to fund the venture, how long it will take to develop the product, the members of your team, an outline of the operations and admin issues and finally, a simple implementation check list with dates.
Initially, try to finance the product yourself and demonstrate that it is workable and bringing in a solid profitability before going to others for funding. Borrowing money from others or getting partners onboard, when the product hasn’t been proven, is fraught with danger.
Put overwhelming effort into your marketing and sales. Persistent communications of your idea to prospects, for your products are essential.
Once you have your product out in the marketplace, you have to listen carefully. You may find that you have to change your strategy considerably as the market might want something else.
It is an extremely lonely mission setting up your own business. Make sure you have oodles of support from your life-partner and that she or he is absolutely committed.
Even when you have a highly successful business, it takes aeons to see the first dollars come in. Often you end up with two years of virtually no income as you build up the business. Can you cope with this and more importantly can your personal life cope with this? Cash flow is always a challenging animal to deal with, but it is always king in business.
And an issue I have tended to scorn in the past (to my detriment), is the operational and administrative side of running the business. You have to put in place systems to deliver your product or service easily and effectively, with a high and continuing level of quality and profitably.
You do need passion and persistence. Persistence is critical as you will get “kicked in the teeth” at least a dozen times a day in the course of running the business.
There is no doubt, that it is enormously satisfying as an engineering professional to run one’s own business, bring new products and services to the market and take control of one’s own destiny. I continue to see so many vibrant engineering businesses opening up that are absolutely inspirational. These range from consulting, to software and hardware development, to electronic product development, to education, to construction and shipbuilding.
When considering entrepreneurial ventures, as the famous General Patton counselled:
‘Take calculated risks. These are quite different from being rash.’
Yours in engineering learning
Mackay’s Musings – 2nd April’12 #472
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