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Re: General business questions

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Kathleen A. O'Brien wrote:
> I would like to get feedback on some or all of the following issues:
> The Problem:  I am a civil/structural engineer and the sole proprietor of a
> home-based business. I showed a tiny profit last year (yea!), am getting
> steady work and know my limits. One of my limits is that I have no clue how
> to run a business.
> So:  What do other people (sole proprietors in particular but I would like
> to hear from others, too) do about the following issues:
> What to charge for time picking up blueprints, photos, going to Kinko's
> etc?. if I had an assistant, I might be able to charge for their time, but
> I can't bill my standard rate for errand running. What about time traveling
> to and from a jobsite?


I do not charge time for running errands IE picking up photos, but I do
bill for time to and from the jobsite plus an additional mileage fee
($0.30/mile)  We do charge clients for photos taken on the job.  By
considering film developing battery etc costs I not charge $0.75 per
photo.  I always make double prints so I can keep a copy in my file
while submitting a copy with my report.

> How to charge for getting on the Net for information/advice about a
> particular problem for a particular job? How do other people bill that
> time? Do they bill that time at all?

I wouldn't bill for general information but If there is a specific issue
which needs to be researched I would tell the client up front before
beginning and explain to them the need and let them know that they will
be charged an hourly rate for this time.

> Could someone tell me a range of hourly rates for a home-based sole
> proprieter who mostly does residences? Is it fair to charge more for
> commercial work? What about clients who are EXTREMELY (i.e           6
> months) slow to pay but give you lots of work? Should you charge them more?

Hourly rates in Washington probably vary from those in California. 
Experience and liscensing also should be factored in when setting your
hourly rate.  Don't under sell yourself.  Most people will pay a little
more knowing they will get a solution that works.  Plus you need to
cover your expenses "overhead ie:  internet time, computer hardware &
software, etc we can't afford to be to far behind the technology.  In
our Engineering Services agreement we have a clause stating that if the
bill is not payed we will charge 1-1/2% finance charge per month.  Some
of my clients I require a down payment up front and the remainder at the
completion on the project.  I do not vary my hourly rate between
residences and commercial.

> What about a cap/not to exceed figure? I don't usually eat time on the
> simple jobs any more, but the complex (i.e. fun) ones I REALLY do.

I usually don't provide a not to exceed figure.  I either give a
estimate which may be low or high or a give a fixed rate.  With the
fixed rate I try to set it above what I will actually spend, but
sometimes I have to eat it.  Most of the time I work on an hourly rate.
> Is there a rule of thumb for how much time to charge when the technical
> aspects of the project are brand new and you are learning as you do it
> (because the deadline is tight and there is no time to do it any other
> way)? When I'm learning something new I will not usually charge more than
> half the time to the job, sometimes, less (depending).
Care should be applied to providing services on something brand new.  Do
you have another professional engineer which you could have review your
plans and calculations in this situation.  Washington State Law states
we can practice in the area of our expertise.  If you are a sole
proprieter this should be considered prior to taking a job which you do
not have previous experience.  On the other hand we are all expected to
keep learning and keep up with technology.  If you are just trying a new
proceedure you can check it with a method you feel comfortable with. 
Even if you lose money on a job learning a skill you will use in several
other jobs it may be money well spent to have someone else review your
> How do you know when it's time to hire someone? And how do you know whether
> that Someone should be an errand runner or a Jr. Engineer? Is there some
> benchmark? How do you know when you need a Partner? How do you pick a
> Partner?
Check with your local laws on home based business concerning who you can
hire in your home.  If you hire a Jr. engineer realize that training
will be involved?  Figure that it will take a couple of years befor they
totally pay for themselves.  Maybe if you are overwelmed with errands
and other paperwork you could hire someone for a couple hours per week
to run errands.  I would anticipate before you hire someone you need to
be able to cover their expenses by the revenue you currently bring in. 
Also realize that a single person office is hit much harder during the
times of slow construction.
> I have been developing good habits; ie. run all errands at one time, don't
> go answer the home phone during business hours, etc., but I still feel
> overwhelmed and inefficient.
> Any advice will be very appreciated!
> Kate O'Brien, P.E.
> Simi Valley, CA

If you would like to discuss this more please email me at

Jill T. Shuttleworth, P.E., S.E.