According to IBISWorld, from 2014 – 2019, the Engineering service industry in the U.S. has experienced a significant growth rate of 2.4% per annum to reach a staggering $273 billion in revenue. And over the course of these five years, the number of engineering businesses have increased by 1.2% as well. Everyone wants a piece of that pie, and today, more intrepid engineers are venturing out into the world of startups. It’s a dog-eat-dog competitive business environment where only the most prepared and savvy survive.
A commonly held misconception is that it’s easy taking new products or services to market. However, the reality is far riskier. And imperfect solutions are not the main reason why new engineering businesses fail. So, here is a simple guide that we hope will help bolster your experience and make the journey a little smoother.
Contents
Estimate the commercial viability
Before sinking a load of capital and time into any idea, however brilliant you may think it is, you must test the commercial viability of your technology solution. This constitutes several factors.
- Analyze third-party market research and based on the feedback, if required, tweak your strategy.
- Secondly, conduct relevant customer feedback on prototypes, ideally from your target demographic and invite a substantial group of people to a limited release of the product. Allow them sufficient time with the product; it may even take days, but by the end of it, you will have invaluable feedback on what works and what doesn’t.
- Research advise of successful business executives, preferably in the same field of engineering.
Get insured
Today’s clients and more finicky than ever, and this has led to an increasingly litigious culture. Regardless of your field of specialization, engineering work requires meticulous attention to the details. Unfortunately, errors are an occupational hazard and happen quite often. But when you have engineers professional liability insurance, you will have that peace of mind that certain risks are mitigated. So, if your client is compelled to file a claim for any work that doesn’t live up to the standards promised, your professional liability insurance will kick in to cover legal expenses, related costs like loss of income suffered due to the claim, and/or settlement amounts, if the court does rule in favor of the claimant. And depending on the insurance plan you choose; you can rest assured that your future earnings are secure.
Bring diverse skills to the table
Often, engineers assume that working with other people they are accustomed to, primarily other engineers, allows them better control, and by that same yardstick, easier leadership. However, diversity brings value and can drastically transform the effectiveness of your endeavor. Yes, a team with different skills is probably not something you’re used to and hence more challenging to manage, but in the long run, thanks to their diverse skill sets, they are the people most likely to help your business achieve success.
Capital is essential
Sourcing sufficient capital is one of the leading constraints most engineering entrepreneurs face, while others underestimate the funds it takes to set up a successful business. From manufacturing, advertising, and growing to competitive market size to logistics, customer retention, and overheads, there is an array of components that will need sufficient money to ensure you stay afloat. According to Forbes, startups that require massive capital should consider venture capital funds, also referred to as “corporate venture arms.” Google, Comcast, Microsoft, Intel, Dell, Qualcomm, and Nokia are just some of the large corporations that have active venture capital arms that have invested a considerable amount of funds into engineering and other startups while providing them with other support as well.
Some engineering entrepreneurs are apprehensive of bringing in outside funding because they feel they might lose control and be under the pump to produce results faster. However, this is just another misconception. When investors like your product and business ideas and they see an opportunity to scale the business, they encourage it as they are well aware of the advantages it brings. Having strategic backing will accelerate your engineering business’ trajectory of success; so, you shouldn’t be opposed to it.
Market like mad
Some engineers, particularly those with a more conventional bent of mind, are firm believers that if a product or solution works, then customers will come through the door in hoards. Unfortunately, in the fast-paced business environment that exists today, that is not typically the case. Employing successful marketing strategies is integral to the success of any business. One of the reasons Apple and Microsoft have fared so well is in no small way thanks to their brilliant marketing ploys. Of course, you don’t have the deep pockets these companies do, so look into more affordable options.
Start with the internet. As of 2019, with over 4.39 billion users on the web, it is a gold mine, which any fledgling business should look to exploit. Learn about successful marketing approaches, to drive more traffic to your virtual doorstep, increase engagement levels, better conversion rates, and send more of your target demographic down the purchase funnel.
