If you haven’t already heard, roughly 1/3 of the United States has deregulated its energy policy. In a nutshell, this means that local utility companies can now charge whatever they want for electricity and/or natural gas. This is both bad news and good news for customers. Tariffs will go up, but it also means customers will now be able to choose where they get their energy supply from.
So what does that mean to you if you want to become an energy broker? It means that there are potentially millions of customers waiting for you to contact them. They would love to be shown how to save money on their energy bill and you could be the hero that saves the day! But not everything in life is peach and cream. To become an energy broker and make a profit in this unregulated market, you need to have the right components. You should join a company that gives you the best chance of earning what you want. Here is a list of what you will need:
1. Strong company management and experience
The worst mistake you can make is joining one of these new energy companies and having to worry about poor management and lack of experience. Experience is everything and you need to ensure that company founders and senior management have a successful and profitable experience in the energy industry. I can guarantee you that in the next five years dozens of new energy companies will appear offering broker positions, but they will disappear as quickly as they started, simply because they lacked experience.
2. Tools and Training
As an energy broker, you need the right tools and training to acquire customers and increase awareness. Some of the required tools include many sales and promotional aids to help spread the word about your company and what you offer. You must also have effective training for new brokers. Most people who become energy brokers, including you, have no prior experience in this industry. You must be trained quickly, have the necessary resources and have knowledge in the market. Only then will you have the confidence that you know what you are doing and will have the right answers when leads and prospects ask you questions.
3. Competitive Offer
As stated above, there will be a lot of competition in the market from other energy providers. The question to ask yourself is, “What makes my business unique and what can we offer customers compared to others?” Your offer must be precise and the rate you offer to customers must be competitive. Your company will typically offer a variable rate to customers that will typically be lower than your local utility company. You must be sure that the rate will remain competitive based on market fluctuations.
So now that you know what you should have in place as an energy broker, let’s talk about the pros and cons of this exciting new type of business venture.
advantage
- No overheads – As an energy broker, you don’t have to worry about the typical overheads of a traditional business/franchise. There is no product, no inventory, no sale, no collections.
- Simplicity: With this type of new business, you are simply showing people how to pay less for something they already buy.
- Earning Potential – Virtually everyone you meet uses energy, making them potential customers. Depending on your state, there could be thousands and in some cases millions of customers waiting to switch to a cheaper energy provider.
- No sales experience required: As a broker, you are in the business of telling, not selling. None of your clients need an explanation of the need for electricity, unless they live in a cave.
- Timing: When it comes to opportunities in the business world, timing is everything. Eventually all states in the US will be deregulated. This gives you, as an energy broker, a great opportunity to capitalize on this exciting trend. Even big names like Bill Gates and Warren Buffet believe that energy deregulation will create some very rich people in the next two to five years.
cons
- Lack of Training – Some energy brokerage firms will have very inadequate training. If you’re not properly trained, you’ll lack the knowledge to acquire residential customers and have a hard time closing larger business deals.
- Work Hours – Many new energy brokers will find it surprisingly difficult to find enough time to commit to this new business venture. You will usually already be working during the day and the only time you can allocate to your brokerage business is at night when most businesses are closed and most people retire for the day.
- Lack of Awareness – Depending on the area, most customers will have no idea that they have a choice as to which energy provider they can choose. You may find yourself explaining a lot, encountering skepticism, and wishing the local news station would help you spread the word. But, for energy brokers willing to take the time to explain and educate their clients, they can expect to be rewarded.
So, in closing, I’d like to leave you with this question. If you’re considering becoming an energy broker and taking advantage of this new trend, are you willing to commit your time and energy (no pun intended) until you’re successful? I truly believe that energy deregulation will create many future success stories and save millions of people money, but the only new energy brokers who can hope to be rewarded will be the ones who are serious and committed. Will you be one of them?