Automation business venture

I have recently been layed off, since my company had a newer, nicer facility in another country, and have been toying with the idea of trying a small business.
I worked as an Electronics Tech for the past 11 years. I attended college and obtained an Associates Degree in Electronics Engineering prior to this. I have quite a bit of experience with automation projects, since most of our upgrades and improvements were done 'in house'. I have used mainly GE and Siemens PLC's(S5 and S7), some small Siemens OP programming, and I think almost every drive known to man has dropped by our plant at some time or another. I've also got alot of electrical and mechanical knowledge, which can only help I'm sure.
I have a laptop with alot of Programming software and the programming cables as well, so there's a major expense out of the way.
My question is mainly this, what level of experience did most of you self-employed gentlemen have when you started out? What are some pitfalls I can avoid or recommendations you have? What was the deciding factor that made you leave your job to start your own company? OK so that was alot of questions, sorry. One of my concerns is my lack of experience with CAD. I drew most of my schematics by hand, we had a documentation guy that did all the AutoCad work.
I would start out looking for small projects first, adding PLC's or maybe checking with local electrical contractors to see if they are looking for someone to subcontract some controls work to.
Any input or brainstorming would be greatly appreciated guys. Thanks!

The biggest problems with self employment are not the technical ones. You can buy CAD software, and learn to use it. You can learn what you need about any PLC you hit. Do you and your family have the attitude needed for self employment? This path isn't better or worse than the traditional carreer path, but it is different and requires different talents and attitudes.

These are some past topics that may help you - judicious searching will turn up many others.


http://www.plctalk.net/qanda/showthread.php?s=&threadid=4181&perpage=15&pagenumber=1

http://www.plctalk.net/qanda/showthread.php?s=&postid=33474#post33474

http://www.plctalk.net/qanda/showthread.php?s=&threadid=6441&highlight=own+business

When I first started my business, I read a lot of books. It was universally agreed that the number one cause of small business going under was failure to keep good records! This meant financial recoreds, of course. Hardly a technical problem.

Small Business

Myself and my business partner started our own business back in October. We both have around 25 years working in automation equipment and process controls. We have been talking about starting our own company for the last year or so. Anyway, the company downsized and they got me.
My partner who also worked for the company gave his notice soon afterwards and the rest history will decide.
The ironic thing is that after letting us go, the company had to turn around and subcontract what we did back to us. We are also picking up new work from other customers and a lot from the existing past customers.
My advice is if you have a lot of good contacts in the plants that you serviced, call them and let them know you are available, you should have no problem. You can quote them a lot lower hourly rate on your own and that will get your foot in the door.
As for the Autocad, you should be able to find other associates willing to do that on the side till you pick up the knowledge. Just sketch it and let them make it look pretty.
The worst part for us has been all of those darn forms that you need with the government. Taxes, payroll, bookkeeping, arhhhh.
Get yourself a good book on setting up your own business. It's a lot of work, but will save a bunch in lawyer fees.

Good luck
Mark
esystemsusa.com

See if you can get yourself enrolled in an entrepreneur's course. These are sometimes offered by your local community college, or by local Chambers of Commerce, sometimes even by your State Unemployment department. The advantage to going through one of those courses is that they will often answer questions you didn't even know you needed to ask. Questions about what permits, licenses, insurance, etc you'll need. They'll make you aware of any assistance that might be available. For example, there may be low-rent incubator space nearby, or you may be eligible to join with other startup businesses to share clerical , bookkeeping, or legal services.

If you're going to run your own business, you'll need to wear several different hats. How good are you at accounting and marketing? When your former boss asked you how long until a job was finished, how accurate was your answer? If you consistently estimated less time than it actually took, that tendency could be disastrous when bidding a job at a fixed price.

Do you personally know people in other industries in your area with the authority to sign purchase orders for your services? It's a lot easier to get a gig with someone you already know than from a total stranger. Once you've built up a portfolio of projects completed successfully, it becomes easier to approach companies with which you have no relationship.

In my personal case, when I was presented with the opportunity to become a part of my current venture, I knew that if I didn't give it a try, I'd spend the rest of my career saying 'what if'. That was four years ago, and I've never regretted the decision.

Well so far I have compiled a list of small to moderate sized factories within approximately a 50 mile radius, not a COMPLETE list of course, but I mailed interest letters to see how many factories would be interested in seeing services available in this area such as I will be offering. My sister works for an accountant, she told me she'll help me out with that side of it very reasonably.
If I'm doing an upgrade to an existing machine in the customer's facility I should be ok toolwise and what not, I don't have a building to work out of other than my 20'x30' utility building and I don't have a van or work truck. Just an SUV and utility trailer. I wonder if I should jump in and start looking for jobs right away once the accounting and legal aspects are worked out of course, or try to look for a workplace, truck, tools, etc...
Did you guys start supplying parts to the customer right away or specify that the customer would supply certain things? I haven't talked to vendors yet and wonder how that will work since I really won't have the money to invest in thousands of $$ worth of parts before seeing any revenue.
Also If a customer asked for a quote to include something I have never used and aren't very familiar with such as SCADA, Wonderware, Cytect, etc.. How did you handle learning things like that you didn't know? Or dealing with that when the customer asked for it? There really isn't any other companies or individuals that provide this service (automation) within approximately 50-60 miles of here.
Also, THANK YOU GUYS, everything has been a tremendous help. I don't know how, but in the future maybe something will come up I can help you guys out with to repay you.

Something to be cautious about:

Does your state or any state where you will be working require a professional license (e.g., PE, electrician) for the work you will be performing? Do you possess the necessary license(s)?

I have been asked to do contract engineering work in the past, but I won't do it unless I am made an employee and thereby covered under the industrial exemption in my state. I cannot directly offer engineering services to the public as I'm not a PE (yet).

"I wonder if I should jump in and start looking for jobs right away once the accounting and legal aspects are worked out of course, or try to look for a workplace, truck, tools, etc... "

Don't invest in brick and mortar or equipment until you need it. I worked out of my house for several years - no problem, especially since you seem to be essentially offering professional services.

"Did you guys start supplying parts to the customer right away or specify that the customer would supply certain things? I haven't talked to vendors yet and wonder how that will work since I really won't have the money to invest in thousands of $$ worth of parts before seeing any revenue."

Don't buy any inventory ever. It gets obsolete too fast, and you won't be able to predict your needs. (OK, maybe a couple of spools of wire and some crimp connectors, but really, thats it!) When you quote, include the necessary lead time to get material from your sources.

It is tough setting up trade accounts, particularly until you have a few years history. For your first few projects, quote based on your customer purchasing the material from your bill of material. It may make one or two shy away from you, but that's life. Most will be happy to save your mark-up.

These are good questions - I predict success for you.

CT782 said:

Also If a customer asked for a quote to include something I have never used and aren't very familiar with such as SCADA, Wonderware, Cytect, etc.. How did you handle learning things like that you didn't know? Or dealing with that when the customer asked for it?

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I'm not looking at starting my own business (at least yet), but that is something I've wondered about as well. I would love to learn some HMI technology, especially programming with Wonderware, but have no idea where to look or where they offer that. I hope someone answers this one. I'll hit my employers up with it.

As of a lot of things requested by the customer, you need to formulate a cost for learning, for ourselves we will include in this price expected learning time from the vendors experiance, add about 75% to that and you should be ok ( Its never as easy as the saleman says) from your experiance you will build up a table of expected times ie, for you to learn another PLC language X amount for you to learn another drives setup X -20% for scada X +99%, we actually price jobs using a percentage safety factor and the title of that is " Difficulty", if you feel that you can learn another package easy small percentage add on, if you feel that you will take a while to learn CAD another percentage. THe more projects we do the better history of pricing database we have, start overestimating too much and they will run, be conservative, but attempt to account for each hour worked.

The best advice anyone gave me was , to establish service customers before you throw youself out there, build one or two customers who can keep you in small/regular work, thats the bread and butter you know !!!!