MANAGEMENT FILES
When we talk about licensing, engineers tend to think of their individ- ual professional licenses rather than firm licenses, which isn’t all that surprising. Some companies operate in states where firm licenses — generally called certificates of authority — aren’t required. Where they are required, the cost of a license is minor, averaging $135 nationwide. As a result, engineering firm licenses are rarely top of mind — until they throw a wrench in your plans, that is, when those small-ticket items suddenly start making a big impact on the bottom line. How big an impact? One of our clients recently missed out on a $1 million bid in California because their company license came in one week after bidding closed. Another came to us with more than $14,000 in penalties and a license suspension due to two lapsed firm licenses. No one wants to miss out on a million-dollar opportunity over a $135 license, let alone be hit with $14,000 in penalties, but these kinds of dilemmas are actually very common in engineering, particularly for large or rapidly growing firms. Fortunately, they are also preventable. Following are seven license habits that cost firms opportunities and profits, and some tips for turning that small-price-tag/big-impact math around to work in your favor. Rushing to bid The first habit to overcome is bidding first, then looking into the matter of licensing. In most states it is illegal even to bid on a project until you have a firm license, yet we hear from firms all the time that have bid in a new jurisdiction where they’re not licensed. This is one of the biggest causes of citations for unlicensed activity, and the consequences can be severe. Don’t ignore firm licensing Seven habits could be hampering your firm’s profitability and growth. By Jerri-Lynn Wier
To avoid missed opportunities, don’t wait until you have an RFP in hand (or worse, until you’ve submitted a bid!) to think about your licensing plans. Licensing in a new state involves multiple layers and steps, generally including registering with the secretary of state and licensing through the state engineering board. Each state has unique licensing requirements, including obtaining documentation from the secretary of state. Since applications are generally approved at monthly or quarterly board meetings, a week’s delay in filing the application can tack months onto the approval process. Include licensing in early discussions about growth strategies, research state requirements proactively, and identify prime states for future ex- pansion (www.harborcompliance.com/information/engineering-firm- license-certificate-of-authorization). Then license proactively to meet your growth goals and strategy. Getting stuck in your present footprint It’s more cost effective to build revenues through existing clients than to acquire new ones, yet many firms miss out on prime opportunities simply by not lining up for them. Map out your clients’ footprints and ask if they have opportunities on the horizon that might be a match. Where you identify promising opportunities, license your firm to sup- port them. In addition to geographic expansion, firms can use licensing to di- versify. For example, one of our larger engineering firm clients had become licensed for land surveying in a patchwork of states to meet project and client demands. They decided to proactively license for land surveying nationwide, a move that has opened up a new range of opportunities from existing and new clients (www.harborcompliance. com/information/land-surveying-license). By positioning your firm to provide a wider range of services across your clients’ operations, you can deepen your relationships and build a stronger, more stable revenue base for your firm. False starts Often firms rush into licensing to beat a bidding deadline, only to re-
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csengineermag.com
april 2018
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