Business for engineers


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I am a proponent of controlling your own destiny. To maintain that control, people need to constantly evaluate not only their current situations, but also what they would do if their situations changed unexpectedly.

There is no more job security in any industry. In business, the big “O” means outsourcing. The use of non-employee vendors is increasing in every industry. While outsourcing often implies offshore companies where labor rates are cheap, many companies are replacing employees with domestic vendors that can provide local labor and, in some cases, might work on the client premises. It is happening in the broadcast industry, and I expect it to also include engineering functions in the future.

My point is that you should always think of starting your own business as an option. This could be as simple as becoming an independent contractor providing services to a few clients or it could be a more formal business with employees. In any case, it is important to have a good understanding of basic business concepts.

Learn something new

Everyone who is gainfully employed has exposure to some basic business concepts. Employees in a management role typically deal with budgeting, department operations and human resource issues, as well as training in other areas crucial to maintaining compliance with state and federal regulations. You also have experience managing employees and workflow. Many larger companies offer courses for certain subjects related to the operation of the business and might also provide paid or subsidized tuition for additional training. This training can provide new or improved skills that are necessary for your growth within the organization.

Even if your company does not offer training, look at what is offered through industry trade organizations for low- or no-cost alternatives. The SBE, through the Harold Ennes Educational Foundation Trust, offers an excellent series of seminars aimed at improving not only your technical skills, but also your management skills. These training sessions are offered in several markets throughout the country, as well as in regional and national broadcast conferences/shows.

Something else to know

If you go out on your own, know that every business should start with a business plan. This forms the roadmap of why the business was created and how it will grow in the future. These plans can be simple or detailed, depending on the audience for which they are written, i.e. if you are trying to get financing to start the business, then the people or entities that might provide that capital will want to see a fairly detailed plan that includes structure, resources, expertise of the owner(s), marketing plan and projected financial plans. A simple plan might include some basic statements about how the business will be formed and the markets it will serve. There should always be some type of written guideline at the beginning. The plan is always a work in progress and will likely change as the business takes form.

Once the plan is in place, decide the business structure in which to operate. Selecting the proper structure is extremely important because this will directly affect how much you will pay for taxes and particularly what level of personal liability you might be exposed to if you were to be sued. The choices for business structure are sole proprietorship, limited liability company (LLC) or corporation (S or C type.) Each of these has advantages and disadvantages depending on your goals, growth plan, comfort with risk and the particular state in which you plan to operate. Consult an attorney and tax advisor before deciding the structure. Other than sole proprietorship, the other structures will need to be filed and accepted in the state you plan to operate. You may also need to file with other states where you plan to do business and receive income.

What's in a name?

If the name you use for the business is something other than that of the owner, you will need to file for a fictitious name (i.e. Acme Consulting) with the state in which you operate. Most states have websites where you can search for business names to see that you are not using an existing name. A “who is” search on the Web might also reveal another entity with the same name in another state or country. While this is not a definitive source of names, it will give you some indication there might be a problem, especially if your selected name has a trademark associated with it.

Once the business is officially formed, get a tax ID number (FEIN) from the IRS. If you operate as a sole proprietorship, that number will be your social security number; the other forms of businesses are treated as separate tax paying entities and, as such, will receive their own tax ID numbers. If you have employees, you may also need a federal employer ID (EIN).

Local and state issues

In addition, you might have to notify and obtain approvals from the local jurisdiction where the business is to be located. Most local jurisdictions require occupational licenses or permits. My experience is that most cities will allow a home office providing it is not intended to be visited by the general public and it will not cause a traffic or parking problem in the neighborhood. Check local zoning regulations for compliance.

If your business performs services for others and plans to charge a fee, check with the Department of Professional Regulation (could be called something else in your state) to verify if the particular service is regulated and whether a professional license is required. Examples of this would be construction (general or specific trades), engineering or real estate services.

Insure your success

Finally, have proper insurance policies in place before performing services. There are several policies that could be required depending on your specific situation. These include health, general liability, theft, accident, errors and omissions and workers compensation. Talk to a few independent insurance agents that specialize in business. This will give you a good idea of what will be required and the cost, which may vary significantly with different carriers. Investigate industry trade organizations such as the SBE that have negotiated reduced rates for health and other specialized insurance products.


McNamara is president of Applied Wireless, Cape Coral, FL.



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