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solo engineering: hourly jobs/software investment/etc

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Just read Richard's thread about software and the time it saves, and having just started my own one-man consulting business, I am facing the same dilemmas. I have had a couple of repair jobs for a contractor and for a steel fab, and they were on jobs my old company had designed. Because I had insight into the types of connections they use, how to fix them, etc. (though no software was really needed and I did the sketches by hand). I could likely accomplish the task much faster then an engineer "off the street", and the fixes were preapproved by my old boss and I dropped off the fix to them directly to speed up the process. All of these intangibles have real costs, as the jobs were experiencing delays and the hours of OT they had to pay to keep things moving paled in comparison with my little fee. I did agree to do it hourly, but did not give them an estimate up front.
After talking to several engineers, they said to never charge your exact time when doing hourly work unless it is expert witness, an on site evaluation, or writing a letter or something, because you are cheating yourself. Charge what you think others would charge and what is a fair fee, and what it is WORTH. You don't want to undercut yourself or others for future work, and become that person people refer to as, "Well I got a guy who does it for only $X ." So just because I can design that connection fix and sketch it up in two hours doesn't mean I am sending them a bill for $160. It isn't worth the time, and it definitely isn't worth the liability. If they call up and need something "right away", and I stay up until 2am getting it out the next morning for them, they have to pay for that service, and seem happy to do so.
I think of what was the value of my work, did I do it fast and keep the contractor moving on a tight schedule, did I assume a lot of liablity for a small fee, would a "real" company like mine have charged double what I am charging, etc? You don't have to clock yourself with a stopwatch.
As far as software, I may have to spend some money on some software as well. But this is to be competetive because I know what software we used at my old company and how much time that saved. Specifically this is a money MAKER on a lump sum design job. If you have to design every steel beam by hand, and design foundations for weird loads without proper software, you will be losing money compared to someone with software. You will pay off that software in no time. That is why right now I am thinking Enercalc because of the cost to benefit ratio, plus I used it a lot at my old company so I can hit the ground running. Also doing small stuff it seems pretty darn useful, especially for parts and pieces.
My bottom line is I think the less clients know about every last detail of how I spent my time, the better. When I had my AC compressor replaced, the guy said it was $5000 total, and that was what my bill was. I shopped around and that seemed right. I did not see an itemized list with time for "AC repair school update classes" or a pipe wrench charge. Right now a new roof is gonna cost you about $7500, whereas a year ago it was about $5000. The price is not given to you per shingle with a nail fee, just a lump sum. Price went up because demand skyrocketed, seems roofers are smart businessman and realized three hurricanes can get you a bump in your fee.
Thank you for these types of discussions, I am as green as they get (one month) doing this solo stuff, and I think it is really fun and exciting so far. I have had to become 10x more organized (not natural) then before, and trying to bring myself up to speed with tax law, insurance, fees, etc., has been interesting. Getting paid to work on the weekends and OT has takend the sting off of extra work, and I thought I was just getting lazy....  I always enjoyed reading about you solo guys and now I hope to learn a lot about the business side from this list. I would like to very warmly thank Dennis and Scott, two people I have never met but hope to, for all their help and advice (including example invoices, etc.)  with this process so far. You guys have been invaluable.
Andrew Kester, PE
Structural Engineering Consultant
E akester(--nospam--at)