Hello All, I am a structural engineer with 10 years of experience. I want to look into opening my own practice where I can provide miscellaneous design to clients and contractors in NYC. Can anyone guide me with how to set this up? What kind of insurance do I need? Anything I should know to open a business ?
Hire a lawyer, an accountant, and an insurance agent. There might be another profession I am missing.
Do you have leads on work?
Leads on work is important depending on the industry and customers. I do inspections on structures and equipment in the mining and power gen sectors and my customers dictate my coverage requirements for insurance.
One customer may require like a 1mil/incident with auto and a 2mil/incident with general while another might require 2 mil auto and 4 mil general with 2 mil umbrella. Some may require pollution coverage or terrorism coverage etc... You can always add additional coverage after you have your policy but it can take a few weeks and if you're missing work that's time sensitive it's a bummer.
Would also recommend a separate E&O policy aside from general liability. The E&O is pretty cheap and protects you in situations where your general might not if you're professionally liable for a bad decision.
^ This. If you plan on doing a lot of small projects & inspections, a bookkeeper as well.
Also, get everything running smooth before you quit your job. Website, contracts, insurance, etc., learn QuickBooks and a good CRM. You want to be ready to deliver projects when your clients call. Speed and availability will be your assets when you first start out.
There is a ton to know. How are you going to do billing? How are you going to proceed payments? Are you going to do business under a company name or your name (need a coa for the former)? How are you going to handle late/no payment?
Asce has an insurance portal. It probably isn't the best but it is very simple.
Quickbooks for the first part, it's like 30 bucks a month for the basic online subscription that you can link to a bank account and will pair transactions with receipts plus you can reconcile accounts, add a credit card account, setup all your individual accounts like insurance, vehicle, food, travel, professional expenses, software, hardware, etc... etc...
I learned about opening my own. Honestly, a good resource to start with is chatgpt (or another ai). You will need to verify everything it says but it will at least get you in the ballpark. There are so many intricacies that are state dependent like whether you have to have an LLC or not or whether it needs to be a PLLC. There is also a decision about what kind of tax designation you are going to use and whether you want a solo 401k.
You can also setup everything yourself online. It isn't that complicated but takes time to learn. Or hire someone to do it for you.
100% agree. I started mine right before AI hit the scene but anybody that asks me about starting one these days that's where I point them to start researching.
I just spent the past three months doing this in California. I was told by the professional engineer’s board (BPELS), that I must do a professional corporation if I’m going to be stamping drawings. LLC was prohibited, I don’t know if that’s a new rule or not, but I emailed BPELS directly and that was their response.
As other commenters have said, hire the following:
lawyer for setting up the business, contracts, articles of incorporation, etc.
Insurance, I went with insurance through ASCE
Accountant
Go to the ny secretary of state to setup the business formally.
Do a PLLC in NY. You can set this up pretty easily by going to the NYS Office of Professions website and downloading all of the forms. It’s pretty straightforward but they are strict about what you can name your company. Make sure you check the NYS database to make sure the name you want isn’t already taken. You can use the general term “engineering” in the name with a PE license, but if you want to use the word “structural”, you will have to gather and send in transcripts from your schooling to prove that you are specifically a structural engineer. You will also need E&O insurance, you’ll need a lawyer to help you set up a basic proposal/contract document, and you’ll want accounting services. Also, don’t forget to look into pricing on software. It gets expensive QUICK. Lastly, you will absolutely want to have a database of clients who will give you work before you jump feet first into running your own company. It may require holding onto your current job while doing side work to build up a reliable client base. I will also warn that small scale residential engineering is hard. The pay is low and clients can be really difficult. I’m getting out of the residential sector because of it.
I really appreciate your insight and suggestion. I don’t intend to quit my full time job. I am trying to build a client base before I make this my main gig. Any idea the range of E&O insurance costs?
I’m in NY and just about finalized my DPC, that designation was made for architects and engineers. Was a sole prop before. 2 employees that will be 25% owners soon.