Need info on starting an integration business

[jfwoodland 0]

I'm planning on doing control systems design and contract PLC work on my own, but........ I can't seem to find much information anywhere that would help me get started. I think I would feel better about "taking the plunge" if I could read about somebody else's experiences in the business. What should I watch out for? How do I get clients? How do I make sure I get paid? Should I get a percentage up front? Anybody out there have any advice or know where I can get some?

[Chris Elston 78]

Do you have basic knowledge with the business model? I sure hope you do. The first thing I would do is get incorporated. The last thing you need is a law suit on your hands that could take everything you own. Having a "corporate" shield is a MUST to protect yourself and your family from money hungry lawyers. As you already know, automation work is very risky. Use caution. Do not attempt to work on anything without first the incorporation and some good insurance. Getting paid today is tougher and tougher. Most of the corporate model is NET terms this and NET terms that. The problem with this is you really got to do your research with who you do business with. You could literally go broke researching companies with Dun and Bradley background checks, but if your quoting a few thousand dollars it's worth it. In the machine building world, generally your STUCK agreeing to each of the customers terms and downpayment schedules. You can attempt to make your own and demand 50% down, and 50% at delivery but chances are you won't get a PO until you've had a chat with your soon to be customer's Controller (bean counter) they will chew on you and chew on you until you agree to their terms...something stupid like 10% down, and 90% NET 45 AFTER you complete the job...more than likely if your desperate for work you throw the dice and hope to god they pay you when they said they will. Plan on 80% of the companies draging out a payment AT LEAST 15 days late. I swear to god they have bean counter schools that TEACH this to them. The longer they can hold on to their money, the longer for you to have to keep fiancing it for them...it really sucks. I don't know why there isn't something like a Credit Collector for dead beat corporation that drag out payments. You can always report them to D and B, but that doesn't help you get your money from them any faster. I could probablly go on and on about slow paying corporate jardon...but I won't bore you. Getting customers is TOUGH. I know you could go knocking on servo places. Like YUSHIN for one, YUSHIN doesn't have enough programmers to keep up with the demand of selling their robots. So they have been hiring contractors like yourself to help integrate their robots all over the USA. You don't have to stop at YUSHIN, there are plenty other place to knock on doors, just pick a device...vision systems, robots, molding machines...etc.... Hope that helps some.

[Guest Guest]

Thanks Chako. That's the kind of stuff I need to hear. I have formed an L.L.C., but maybe I should consider becoming incorporated. Here are a few more questions (I hope you don't mind): Do you have any recommendations for insurance plans? I know there are insurance companies out there who are "small business friendly". What's the going rate for integration work? Do you quote a certain amount of time and charge more if you go over, or do you end up eating any excess time spent on a project? In your experience, how viable is this business? Can I really make a good living doing this, or would I be better off working for "the man"?

[jfwoodland 0]

Sorry, got logged out somehow. The post above is from me.

[Gerry 13]

Your primary need is customers - how to deal with them comes second. LLC(Limited Liability Company) is the same as being incorporated. There's differences depending on which country you live or operate in. The USA is very litigious - other countries less so. Make your own decisions regarding liability insurance based on where you are and who you're dealing with. As for rates - if you have no idea of your worth in your local market, perhaps you should spend a few years in the service of "the man" and find out. Viability - depends on you and your ability.

[Chris Elston 78]

As Gerry already said LLC is the same your good to go. Insurance...you just need enough libilty insurance to cover what you do. You'll have to get a QUOTE. Our company pays $25,000 per year for this. Upward and protects all of our machines on the floor in the millions of dollars. If it was just me and not equipment to worry about catching on fire or something like that, then it's just what if I cut someone's arm off in my machine....that's what you have to look at and there is nothing you can do but consult with an underwritter about EXACTLY what you are going to do and get a policy. Rates...Generally there are two rates that work best. An internal rate that you would QUOTE for a job. One of those quote your best price and that is final. This is your office engineering rate. Generally around $40 - $50 an hour is industry standard. Then there is the FIELD service rate...that's on-site support. This is where the money is, but the most time you'll not be with your family...generally industry wide I've seen $70 - $120 an hour. So at that rate, you don't need the man...but are you going to live on the road forever? I doubt it. Figure the inhouse engineering rate as your bread and butter. That's time you have figured in a quote to get a job designed and intiatially programmed. Living...you can make a good living at this if you have the cutomers. No customers, no living that's for a fact. Generally you might be doing alot of on-site work or contract programming changes, you'll make a good living at this for awhile until you get tired of being on the road, then eventually you want to start design in cad and programming new stuff from stratch, but you have to find stuff to quote. That's where it gets tougher. You don't make as good money wise because you need to be competive when you "QUOTE" a fixed price to do something. Not everyone in this world will settle for T and M....$$$ Time and Material...I wish I could bill T and M for every project...I would be richer than Bill Gates by now... Making more than the man depends on your rates and where you start. If you are paid $60,000 a year, that's $30.00 an hour...at the internal engineering rate your barelly making it. If you only make $40,000 a year or $20.00 an hour, there might be some outlet on your life of course all depend on cost of living. Ideally the work is on-site, the money to be made is on -site. It's always an "emergency" on -site and is the only time you can charge $200 an hour for working on Sunday's...and you can BILL T and M...however the downside is "Travel"..... So bascially it depends on what you want to do. On -site service work, or the quote work and hope to get senerios.... sorry for any mispellings..hey I am an engineer.....

[jfwoodland 0]

Thanks guys. I kind of figured on about $45 for in-house engineering time and $80-$100 for service work, but I wasn't exactly sure. I'll start getting insurance quotes immediately. It sounds like the hardest part is actually drumming up the business. Time to start pounding the pavement, I guess.