So, you’re looking to grow your business or at setting up an energy brokerage.
Whether you have experience with electricity, and utilities, are currently self-employed, or need to start working for yourself – beginning a brokerage business can be incredibly rewarding.
One mistake that many new to the industry make is overvaluing quick energy sales and securing as many new customers as possible. The other is that they undervalue ensuring your business and brokers are responsible, reputable, and transparent (especially when it comes to broker commissions). You should first focus on building a credible business, rather than your business income.
Keep reading for more information and how to get in touch.
What is a business energy broker?
A business energy broker is a third-party intermediary that specializes in helping commercial and industrial businesses find and negotiate energy contracts with energy suppliers. Energy brokers work on behalf of the business to help find the best energy deals, taking into consideration factors such as cost, contract length, and energy usage. Energy brokers have access to information on a variety of energy suppliers and their offerings, which they use to compare and find the best options for their clients. They also have experience in negotiating energy contracts, which can help businesses save time and money by securing the best possible terms. Energy brokers are compensated through commissions from the energy suppliers, so their services are typically provided to businesses at no cost.
What services do business energy brokers offer?
Business energy brokers typically offer a range of services to their clients, including:
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Market analysis: Energy brokers assess the energy market and help businesses understand the options available to them, including different types of energy contracts, energy suppliers, and pricing structures.
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Energy procurement: Energy brokers help businesses find the best energy deals by negotiating with energy suppliers on behalf of their clients. They have access to a range of energy suppliers and their offerings, which they use to compare and find the best options for their clients.
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Contract management: Energy brokers assist with the management of energy contracts, including negotiating contract terms, managing billing, and resolving any disputes that may arise.
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Energy consulting: Energy brokers offer energy consulting services to help businesses reduce their energy costs and improve energy efficiency. They can also provide advice on renewable energy solutions, such as solar or wind power, and assist with their implementation.
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Energy billing: Energy brokers can manage energy billing for their clients, ensuring that bills are accurate and payments are made on time.
The services provided by business energy brokers can help businesses save time, money, and resources by simplifying the process of finding and negotiating energy contracts and managing energy-related activities.
Who Needs an Energy Broker?
An energy broker may be beneficial for any business or organization that uses a significant amount of energy, including commercial, industrial, and institutional facilities. Some specific types of businesses and organizations that could benefit from using an energy broker include:
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Small to medium-sized businesses: Small to medium-sized businesses may not have the resources to negotiate energy contracts and manage energy-related activities themselves, and can benefit from the expertise and knowledge of an energy broker.
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Complex energy users: Businesses with complex energy needs, such as those with multiple locations or varying energy consumption patterns, may find it difficult to manage their energy contracts and billing, and could benefit from the services of an energy broker.
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Companies seeking to reduce energy costs: Companies looking to reduce their energy costs may not be aware of all the options available to them, and can benefit from the market analysis and energy procurement services provided by an energy broker.
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Organizations transitioning to renewable energy: Organizations looking to transition to renewable energy sources, such as solar or wind power, may need assistance in evaluating their options, implementing new systems, and managing their energy contracts, and could benefit from the energy consulting services provided by an energy broker.
Ultimately, any business or organization that uses a significant amount of energy and wants to reduce energy costs, improve energy efficiency, and simplify the process of managing energy contracts and billing could benefit from working with an energy broker.
How to start an energy broker business?
Starting an energy broker business requires careful planning and execution. Here are some steps to follow when starting an energy broker business:
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Conduct market research: Research the energy market and the services offered by other energy brokers to understand the competition and identify areas of opportunity.
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Develop a business plan: Create a detailed business plan that outlines your business structure, services, target market, and financial projections.
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Obtain licensing: Determine the licensing requirements for energy brokers in your state or jurisdiction, and obtain the necessary licenses and certifications.
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Build relationships with energy suppliers: Establish relationships with energy suppliers and negotiate agreements that allow you to offer their products and services to your clients.
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Develop a marketing strategy: Create a marketing strategy that includes online and offline marketing methods, such as search engine optimization, social media marketing, and direct mail.
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Build a website: Develop a professional website that clearly communicates your services and showcases your expertise.
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Hire staff: Hire knowledgeable and experienced staff, including energy brokers, marketing professionals, and administrative personnel, as needed.
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Launch your business: Launch your energy broker business and start marketing your services to potential clients.
Starting an energy broker business requires a significant investment of time, money, and resources, but can be a rewarding and lucrative business for those with the skills and determination to succeed.
How does an energy broker get paid?
An energy broker typically gets paid through a combination of fees and commissions. The exact methods of payment can vary depending on the specific energy broker and the services provided.
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Commission-based payment: Energy brokers who help businesses and organizations negotiate and secure energy contracts may earn a commission on the contracts they secure. This commission is typically a percentage of the contract value and is paid by the energy supplier.
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Fee-based payment: Energy brokers may also charge a fee for their services, which can include market analysis, contract negotiations, and ongoing management of energy contracts. This fee can be a flat rate or a percentage of the cost savings generated by the energy broker.
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Commission and fee-based payment: Some energy brokers may charge a combination of fees and commissions, with a portion of their payment coming from the energy supplier and the remainder coming from the client.
Regardless of the payment method, energy brokers are typically paid only when they successfully negotiate and secure an energy contract on behalf of a client. This creates a strong incentive for energy brokers to negotiate the best possible energy contract for their clients, as their own compensation depends on it.
Who is the biggest energy broker in the UK?
As of 2021, Utilita Energy is one of the largest energy brokers in the UK. The company provides energy brokerage services to both residential and commercial customers, helping them to find the best energy deals and save money on their energy bills. Utilita Energy is known for its innovative and customer-focused approach, and has received several awards and accolades for its services. Other large energy brokers in the UK include British Gas, npower, and EON. The exact size and market share of these companies can vary, and it’s always best to conduct your own research to determine the best energy broker for your specific needs. Larger brokers do not often lead to better consultant partners.
For more information about this post and how Energy Solutions can help with your Electricity, Gas, or Water, click on the links, or check out the contact details at the bottom of the page.