Thinking about opening an energy brokers business? We tell you what you need to know to get started.
The deregulation of the energy industry has created substantial opportunities for entrepreneurs, especially in the area of energy brokerage. Consumers are keenly aware of rising energy costs and have consistently demonstrated a willingness to invest in services that reduce their energy expenses.
One of the primary selling points of brokered energy is that regardless of the provider, electricity and natural gas is sourced from the same grid and pipeline. In other words, differentiation is based solely on price rather than quality. The commoditization of energy translates into a highly competitive brokerage industry in which independent brokers act as both cost analysts and sales agents.
The brokerage process begins with a thorough evaluation of the customer's current energy bills. After evaluating the customer's energy usage, the broker educates the customer about energy purchasing and obtains several quotes from energy suppliers. Using a combination of fixed rates, variable terms, and other purchasing mechanisms, the broker then advises the customer in the selection of a supplier that is capable of meeting their energy requirements and cost parameters.
As previously mentioned, energy consulting is an extremely competitive industry. Cutthroat competitive practices are the norm, so entrepreneurs who lack a competitive nature simply won't succeed in the energy brokerage business. Top earners thrive on competition; they go to great lengths to stay on top of energy pricing in their territory and across the nation.
Energy consultants frequently have a proven sales background. They may or may not have experience in the energy business, but they must quickly familiarize themselves with electricity and natural gas markets. Professional certifications are recommended and may be required in some states.
Promotional messaging for an energy consulting business should focus on the industry's main value proposition, i.e. reducing customers' energy costs. Energy consulting websites typically serve a dual purpose of describing the firm's consulting services and educating consumers about energy reduction strategies.
Successful Business Plans for Energy Brokers Businesses
If you've done your homework, you already know that writing a business plan is the most critical thing you can do for your company.
Although it might seem like an unnecessary formality, your energy brokers company's business plan is a document that will shape your goals and strategies on a go-forward basis.
Furthermore, a good business plan will help you avoid key startup mistakes. Lacking a solid business plan, many startups find themselves rudderless and incapable of executing consistent decision making processes, while committed business planners rely on their plans to guide all of their decision making and short-term planning efforts.
Take a Look at the Competition
Prior to opening an energy brokers business in your town, it's a good idea to find out how you will fit in the competitive landscape. Try our link below to get a list of local competitors nearby. After clicking on the link, type in your city, state and zip code to get a list of energy brokers businesses near you.
How are you going to successfully complete with existing firms? It's important that you never underestimate the competition.
Find Good Remote Business Advice
If you are interested in starting an energy brokers business, it's a wise move to have a conversation with someone who is in the business. If you think owners of nearby energy brokers businesses will give you advice, think again. The last thing they want to do is help you to be a better competitor.
But, a person who owns an energy brokers business in a location that is not competitive to you will be much more likely to talk with you, as long as they don't view you as a competitive threat. In that case, the business owner may be more than happy to discuss the industry with you. Our estimate is that you may have to contact many business owners to find one who is willing to share his wisdom with you.
What's the best way to find an entrepreneur who is running an energy brokers business in another community?
No problem! Just use the link below and try a random city/state or zipcode. Then start dialing for advice until you are successful.
Acquisitions vs. Startups
Unfortunately, many inexperienced energy brokers business entrepreneurs approach ownership with the mistaken idea that a startup is their only option when they could also pursue a business acquisition.
Unless you have compelling reasons to launch a new business, buying an existing energy brokers business may be the better choice.
An acquired energy brokers business is a known quantity; a startup is less certain because its forecasts depend on estimated outcomes. If you're diligent about finding the right acquisition prospect, you may be able to leverage a business buying strategy to rapidly propel yourself into a position of industry leadership.
Don't Rule Out Franchising
Going with a franchise lets you tap into the franchisor's brand recognition and proven business formula.
As part of your process in starting an energy brokers business, you would be wise to check out whether there are good franchise opportunities available that might help you avoid common entrepreneurial mistakes.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.
These additional resources regarding starting a business may be of interest to you.
If you already are in business and came here to learn about growing an existing energy brokers business, these resources will come in handy:
If you sell to energy brokers businesses, you're in the wrong place. These resources are more appropriate for you:
If you are interested in starting a different kind of business, please browse our directory of guides below.