Are you about starting an energy brokerage company? If YES, here is a complete sample energy brokerage business plan template & feasibility report you can use for FREE. Okay, so we have considered all the requirements for starting an energy brokerage business. We also took it further by analyzing and drafting a sample energy brokerage marketing plan template backed up by actionable guerrilla marketing ideas for energy brokerage businesses. So let’s proceed to the business planning section.
Why Start an Energy Brokerage Business?
Due to the fact that energy is an essential commodity that cannot be done without by anyone, in addition to the fact that the energy section has been deregulated, has led to the growth of the energy brokerage industry, for entrepreneurs who are looking to make some money legally. Due to the fact that same service is offered in this industry, energy brokers prefer to focus on differences in prices rather than the quality of service.
To be successful in this field, an energy broker needs to be updated as regards the activities in the energy and gas industry. Even though this might seem like a fairly easy business to start up, the competition in this industry is intense and would require you to be quite competitive and have a solid sales background.
After carrying out a thorough investigation on the industry, the next best thing would be for you to write out a business plan. Below is the sample energy broker business plan;
A Sample Energy Brokerage Business Plan Template
1. Industry Overview
The energy industry is a large one with fossil fuels such as coal, oil and natural gas making up more than 85% of the energy consumed in the united states of America as at 2008. Oil however, provided for about 40% of the energy needs.
While there have been tremendous opportunities in the energy business industry due to the deregulation of markets across most states in the country, it hasn’t been an easy market for the consumers, especially as prices keep fluctuating every day making it almost impossible for these customers to determine which supplier would best suit their needs and requirements. The energy industry just like any other industry has its fair shares of ups and downs.
According to statistics, there is ample opportunity for brokers in the energy sector especially in the United States of America, where there is a general resurgence in exploration as well as discovery of new shale discoveries across the country.
According to a statistical report, the number of small businesses that used a brokerage firms to get their gas and electricity were about 13% in total, which shows that there is still a significant market that can be tapped into by energy brokerage firms.
The reason for this small percentage was due to the fact that most businesses did not really understand what it is energy firms did and how they made their money, while most thought that energy firms represented themselves without being aware that they represented some energy companies. Regardless of this fact, most were impressed with the energy firms that they patronized.
Due to the evolving markets, things are beginning to look up for energy brokerage firms as more energy suppliers especially the smaller ones are beginning to partner with brokers so that customers can be aware an patronize them. Also, changing contracts have enabled brokerage firms to be able to sign up to as many energy suppliers as they are able to adequately represent.
While there have been steady growth in the market, the market has been projected to experience close to a 7% growth in the next two years, with the Compound Annual Growth Rate (CAGR) expected to drop to a flat growth at the end of the two years.
Due to the growing political leaning towards renewable clean energy, several countries – 200 in number – have signed agreements to gradually move away from traditional sources of energy towards renewable energy, thereby increasing more investments in renewable energy stocks.
2. Executive Summary
Everyday Renewals LLC is one of the leading energy broker firms not only in New York City but also in the whole of United States of America. We are in the business of energy brokerage to help customers carry out a cost analysis and energy audit to be able to let them make informed decisions on which energy suppliers to patronize.
We have been established not only to make profit and offer our services to our customers – both potential and existing but to also compete favorably with our competitors here in New York City and in the whole of the United States of America as well.
We as a company know the importance of having the right workforce, and so we have sourced for and recruited experienced and competent professionals to help ensure that our goals and objectives are being met. Our employees know how important it is to remain updated on the energy and gas industry as well as on energy suppliers both small and large, and how to utilize the information gotten from the different sources.
The energy brokerage field is one that is filled with stiff competition due to the fact that the services offered by almost all firms are mostly uniform in nature. It is with this fact in mind that we have decided to go into green energy, so as to be able to cater to customers who have decided to go green.
Asides from hiring the best hands that know the industry and have the experience to take our company from where we are to where we ought to be, we also have the best customer care executives who are adept at ensuring that our customers remain deeply satisfied with our services. Our customer care executives have been trained to read the tone and body languages of our customers, so as to appropriately give the customers the answers they seek.
The welfare package and incentives for our customers are one of the best in the industry as we know that it is very important that our employees remain deeply motivated in ensuring that the goals and objectives of the company are achieved at all times. We also carry out regular trainings for our employees so as to enhance their skills.
Because this is a service oriented business, we are committed to remaining transparent and honest to our clients and will strive not to misrepresent facts to them in our bid to ensure that we gain customers. We know how customers love honesty and this attribute alone is likely to ensure that we have more customers as our loyal and satisfied customers will refer us to their friends, families, and colleagues.
Mr. Jack Bill who owns and will run the business as the Chief Executive Officer is an alumni of the prestigious Harvard Business School, where he has not only a B.Sc in energy and gas but also a Masters degree as well. Mr. Jack Bill also has 20 years of experience in the energy and gas industry and will therefore bring the experience to bear in Everyday Renewals.
3. Our Products and Services
Even though the services offered in this industry are basic, we are prepared to deal in all the services and more. One major advantage for our energy broker business is our location, which is in New York. We are however prepared to make profit as is legally possible in this industry, and without breaking the laws.
Since the energy brokerage industry is pretty regular, we intend to engage in more services which we know will be beneficial to our customers, and will also give us an edge over our other competitors in the energy field. Our services will be diversified so as to attract more customers and also increase the bottom line of our company. Some of the services we intend to offer to our customers include;
- Costs analysts
- Sales agents
- Auditing services
- Green energy services
- Consultancy and advisory services
- Franchise
- Trainings
4. Our Mission and Vision Statement
- Our vision is to be the top leaders in the energy brokerage business by giving our customers the best energy supplier that would suit our client’s requirement and that can be gotten in an around our location and in the whole of the United States of America.
- Our mission in achieving our vision is to stay updated on the electricity and natural gas markets and to use this information to educate our customers continually on how they can reduce their energy costs. We also will ensure that our price rates for our services are the best that can be gotten in the industry.
Our Business Structure
Having the right business structure is very important for us as a business as we intend to ensure that we start off on the right foot. Our aim at Everyday Renewals LLC business is to ensure that we employ only competent hands to the available positions in the company that will carry and push forth our company’s goals and objectives.
Due to what we intend to achieve at Energy Renewals LLC, we are ready to source at the right places for our clients and ensure that only those who have the experience needed to bring up our company to the required standard and who indentify with our vision and goals are recruited to work for us.
Due to the fact that we would be dealing with a lot of customers both potential and existing, we intend to have an excellent customer service and will therefore recruit customer service executives that have a thorough understanding of our industry and that will also know how to attend to all the various requests, orders, and complaints of our various customers.
Therefore, below is the business structure we intend to build at Everyday Renewals LLC;
- Chief Executive Officer
- Human Resources and Admin Manager
- Energy Broker Manager
- Business Development Manager
- Marketing Executives
- Sales Team
- Accountants
- Customer Service Executives
- Cleaners
- Security Guard
5. Job Roles and Responsibilities
Chief Executive Officer
- In charge of creating the overall vision and policies of the company
- Meets and carries out negotiation with high-powered clients on behalf of the company
- Communicates the organizational policies and overall direction to the management staff
Human Resources and Admin Manager
- Responsible for sourcing, recruiting and carrying out orientation of new employees on behalf of the company
- Responsible for employee training and performance appraisals
- In charge of staff welfare and incentive packages
Energy Broker Manager
- In charge of auditing and analysis of cost and energy for customers
- Stays updated on information regarding the energy and gas industry
- Develops strategies with the CEO to boost the revenue of the company
Business Development Manager
- Helps develops new business ideas on behalf of the company
- Carries out research on new business models that will generate revenue for the company
Marketing Executives
- Researches on and Identifies possible target market for the company
- Attends strategic meetings on behalf of the company
- Monitors the sales team
- Responsible for placing adverts on behalf of the company
Sales Team
- Responsible for ensuring that sales are increased for the company
- Ensures that all contact and information of customers are well documented
- Drafts strategic plans as regards sales
Accountants
- Responsible for creating and reporting all the financial reports, financial statements and reports on behalf of Everyday Renewals
- Drafts the budget with the CEO and ensures that all departments’ budget are in accordance with the main budget
- Responsible for administering payrolls
- Prepares the tax documents and ensures that all tax information are submitted to the tax authorities
Customer Service Executives
- Ensures that they remain updated about the gas and energy industry so as to ably represent the company to customers
- Responsible for keeping and updating an accurate customer database
- Responsible for answering inquiries, responding promptly to complaints, and taking orders
- Manages other duties as assigned by the human resources and admin manager
Cleaners
- Responsible for keeping the premises clean especially after work hours
- Ensures that the rest room and convenience is kept clean for employees and visitors
- Ensures that cleaning supplies are in stock and sends in requests for depleted stock
- Carries out any other duties as might be specified by the Admin Manager
Security Guard
- Responsible for ensuring the security of the premises as well as the properties within during and after work hours
- Scrutinizes the influx and out flux of guests to Everyday Renewals LLC
- Responsible for monitoring surveillance equipment
- Carries out any other duties as assigned by the management of Everyday Renewals LLC
6. SWOT Analysis
Carrying out a SWOT (Strength, Weakness, Opportunities and Threats) analysis on our energy brokerage business was intended to act as a guide on whether it was necessary for us to go into the business at all. As a SWOT analysis can be very subjective especially if conducted by the business, we hired an expert business consultant who helped us critically review our business concept to determine if we were best suited to go into this business, and what opportunities we had and what threats we were likely to encounter in the course of running the business.
Our hired business consultant used the PEST (Political, Economic, Socio-cultural and Technology) analysis to be able to conduct a thorough SWOT analysis on behalf of Everyday Renewals LLC. Below is the of the SWOT analysis that was conducted on behalf of Everyday Renewals LLC;
- Strengths
Our strengths lie in the fact that we would be offering several unique services for our various customers not offered by our competitors in New York. We are also strategically positioned which makes us more likely to attract more customers especially with the services that we are offering.
Another factor to our advantage is the fact that we have competent and experienced hands who do not only have a great understanding of what our visions and goals are but have also seen themselves as stakeholders in ensuring that Everyday Renewals LLC becomes an industry leader.
Also, our ability to provide excellent customer care is unrivalled in the industry as we are not only meeting but exceeding our customers’ expectations as well. Finally, our Chief Executive Office, Mr. Jack Bill has the required experience necessary to take the business to heights never before attained in the industry.
- Weakness
Our weakness lies in the fact that we are in an industry that is filled with intense completion, and so we might have to engage in constant and intense publicity so that we can stand out from our competitors.
- Opportunities
The opportunities in this market are limitless. We are also offering green energy services for customers who have gone green or are looking to go green; this gives us leverage over our other customers in the industry as we have been able to offer our customers a service that was previously thought unattainable.
- Threats
The threats that are likely to confront us in this industry is the fact that we are entering a market that is filled with many energy brokerage firms especially here in New York City, who are also competing with us in trying to gain a share of the market.
Also, we will have to contend with changing and strict government policies. Every business is likely to face threats either at start-up or during the course of running the business, we are optimistic that we would overcome whatever threats might come our way.
7. MARKET ANALYSIS
- Market Trends
Everyone uses energy and so the trend for this market is relatively the same. The only difference in the trends of this industry is that people pay differently for what they consume depending on the energy company they patronize. As an energy broker staying updated as regards the energy rates of all suppliers in the energy and gas market is very vital and determining the best energy companies to market for is vital as well as it would determine what the number of customers you would broker to.
Most energy brokers have gone beyond helping customers analyze their energy costs and comparing it to the energy consumed and ensuring that they pay the fairest rates for the best service to educating these customers on purchasing energy. This is done so as to attract more patronage from potential customers as well as cause existing customers to refer new customers to the energy broker companies.
The increase in the use of technologies have made it easier for energy brokers to be able to reach out to many customers as possible as most have resorted to using their websites and social media platforms to educate and inform customers on the choices they have when it comes to paying for energy consumption. The internet has also made it possible to see what competitors are doing and offering and which will allow us adjust suitably as well as network with energy and gas suppliers.
8. Our Target Market
Everyone uses energy for one purpose or the other, and so when it comes to the market for those that use energy, we would say everyone. However, the target market we intend to focus on based on our strategic location in New York will fall on several categories of customers both private and commercial.
We carried out a thorough market research that was to enable us have an idea on what we would be expecting from our target market and what they in return would be expecting from us. The result from our business research therefore means that we would be offering our services to the following group of customers;
- Households
- Schools
- Hospitals
- Small Businesses
- Salons
- Spas
- Motels
- Hotels
- Restaurants
Our Competitive Advantage
Our vision at Everyday Renewals LLC is to ensure that we offer our customers the best services for the fairest rates in the industry. We also intend to be one of the leading brands in the industry here in New York City as well as the whole of the United States of America as a whole. To achieve this, we have certain strategies in place that will allow us have competitive advantage over our competitors in the industry.
One of the first things we intend to use as leverage over our competitors is to ensure that we have the best networks in the industry. This way, we would remain tops when it comes to getting and disseminating vital industry information to our customers.
Another competitive advantage we intend to have is in ensuring that we source for and recruit only the best professionals in the industry to work with us. Our employees will not only be competent but they will have the required experience intended to make us stand out from our competitors.
We also intend to ensure that we provide excellent customer care by ensuring that our customer service executives remain updated as regards happenings in the industry and also that they give the highest professional service to our customers always so as to communicate our brand effectively, whilst carrying out their assigned tasks on behalf of the company.
Lastly, as part of our competitive strategies, we intend to ensure that we offer more services than what our competitors are offering, this way we gain more customers that will invariably ensure that our bottom line is improved.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Everyday Renewal LLC just like any other business has been established with the aim of generating revenue in the energy industry in the United States of America, and due to this fact, we will ensure that we offer our customers different services that are intended to boost our sources of income and improve the bottom line for our company.
Everyday Renewal LLC therefore intends to generate income through the offering of the following services;
- Costs analysts
- Sales agents
- Auditing services
- Green energy services
- Consultancy and advisory services
- Franchise
- Trainings
10. Sales Forecast
The energy industry is one that will always have a stable demand especially as energy is an essential commodity that people can’t do without.
Due to our strategic location in New York City, we know that we are well positioned to grab a fair share of the market and so we are optimistic that we would meet our revenue generation target in less than one year of operation, and grow our business from there.
To achieve this target revenue generation, we have carried out a critical evaluation of the market in order to be able to come up with a sales forecast. We also hired a business consultant who helped us carry out a thorough analysis to determine our revenue generation chances in the market, especially as it relates to New York City.
Below is the sales projection for Everyday Renewals LLC that was primarily based on our location as well as several other factors;
- First Fiscal Year-: $180,000
- Second Fiscal Year-: $360,000
- Third Fiscal Year-: $750,000
N.B: It is worthy to note that these projections were done based on several factors that were used such as the lack of similar competitors in the energy brokerage industry, lack of cheap alternatives, and on the assumptions that we would not change locations in the foreseeable future. This therefore means that should there be any change in the above mentioned factors; the sales projections might be higher or lower.
- Marketing Strategy and Sales Strategy
As an entrepreneur starting a new business, marketing can be very daunting, especially as it requires a degree of expertise and strategies to pull it off. In marketing your energy brokerage business, you would need to pay attention to details and be committed to basic marketing principles.
The deregulation in the industry has made energy brokers come up with different ways to penetrate the market in order to make clients aware of your business and the benefits they stand to gain in patronizing your services. Marketing serves a dual purpose of communicating the brand to customers and also generating the needed revenue required to make the bottom line of the company to become healthy.
To be able to effectively draft the right marketing strategies, we would need to know and be updated about energy law, market suppliers as well as its pricing structures. We will need to also be informed about brokerage opportunities that are available for us and our marketing team. Our marketing team will also be empowered to come up with different effective strategies that will enable us penetrate the market, and have leverage over our competitors in the marketplace.
We know how important technology is at Everyday Renewals LLC, in ensuring that we reach all our customers – both potential and existing – in New York City as well as in the whole of the United States of America. We also intend to use multichannel marketing strategies so as to engage our customers in diverse ways.
In essence, we intend to adopt the following marketing and sales strategies at Everyday Renewals LLC;
- Introduce our energy brokerage business formally to our commercial and private target market through mails to private customers and sending of introductory letters to commercial customers
- Create a unique logo
- Design and launch a unique and interactive website
- Throw an unforgettable opening party to capture the attention of the community and attract clients
- Attend trade fairs so as to be able to meet with more potential customers
- Advertise our business in newspapers and via radio and television stations
- Ensure that our energy business is listed in offline and online directories
- Empower our marketing team to engage in direct marketing
- Use our social media platforms – LinkedIn and Facebook, to vigorously promote our business
- Encourage our existing customers to refer us to others
11. Publicity and Advertising Strategy
The energy brokerage industry is such a competitive one that without engaging in intense publicity, one might find that the business might not survive beyond the first year. Even though we are aware that we are offering services that most other brokerages around us aren’t, we still know how important it is for us to engage in publicity.
Publicity serves a dual purpose for us as not only will it allow customers to be aware of the services we offer, but it will also increase patronage for our business as well.
Everyday Renewals LLC intends to use technology in its publicity strategies. We know that using technologies will ensure that our brand is effectively communicated to our customers in New York City as well as all over the United States of America.
Also, actively engaging in publicity means we would be growing our brand strongly and have it deeply rooted in New York City before branching out to other cities. Some of the platforms we intend to use in achieving our publicity and advertising strategies for Everyday Renewals LLC are;
- Ensure that our website is interactive and user friendly to potential customers
- Make sure that our social media platforms such as Facebook and LinkedIn are always active to educate as well as attend to inquiries and complaints of our customers
- Place adverts on popular forums and blogs
- Sponsor certain school programs in the community
- Distribute our unique fliers and handbills in target areas
- Ensure that our bill boards are placed in strategic locations around New York City
- Attend trade fairs to network and physically connect with customers
12. Our Pricing Strategy
Setting the pricing for our services will depend entirely on what the requirements of our customer is. Our rates therefore depend on what package our customers pick. We will however ensure that all our customers get a fair rate and that each package gives our customers more than what they would get from our competitors.
Due to this face, we intend to ensure that our rates for the first six months in business are a bit lower than that of our competitors in New York and in the whole of the United States of America as well. This is so that we can attract as many customers to our business. In also setting the low price, we have put strategies in place that will ensure that we are able to grow our bottom line in the first year of business.
- Payment Options
Everyday Renewals LLC has developed several payment options that will be not only beneficial to us but also to our clients as well. We are aware of the fact that due to the variety of customers we are going to cater to, they might prefer different payment options that would suit their needs at any given moment.
Therefore the payment options that will be available to our different customers are;
- Cash payment
- Credit card payment
- Payment via Point of Sale (POS) Machine
- Payment via online portal
- Payment via check
These payment options were carefully chosen in line with our bank, which has the capability of managing these different platforms without hitches.
13. Startup Expenditure (Budget)
Even though this is a majorly a service oriented business, however, starting an energy brokerage business would require that one gets several things in place, such as leasing a facility, hiring and paying employees as well as payment of utility bills as well.
Most times the bulk of the generated capital goes into taking care of the above mentioned requirements. Therefore the areas we intend to use our generated start-up capital for are;
- Fees for business registration and incorporation – $750
- Insurance coverage (General liability and Workers Compensation) – $1,500
- Obtaining of licenses and permits, as well as accounting software – $2,000
- Marketing expenses for a period of one year as well as marketing expenses for the grand opening of Everyday Renewals LLC – $5,700
- Cost of hiring reputable business consultants – $2,550
- Operational costs for the first 6 months (employee salaries, utility bills) – $100,000
- Leasing of office facility for a period of one year including renovations – $30,000
- Cost of purchasing furniture, computers, printers, fax machines, phones – $12,000
- Cost of launching a website – $500
- Cost of our opening party – $5,000
- Miscellaneous – $5,000
From the above requirements, we would need the sum of $165,000 to be able to start and successfully run our energy brokerage firm in New York City. The above amount covers the salaries of our employees and payment of utilities for at least 6 months of operations. It also covers the leasing of an office facility for a period of one year.
Generating Funding / Startup Capital for Everyday Renewals Energy Broker Business
Everyday Renewal LLC is a business owned and operated by a business man, Mr. Jack Bill. Mr. Jack Bill intends to run this business alone without getting or working with an external business partner, which is why while sourcing for startup capital has decided to limit his sources to these three sources.
The areas where Jack intends to generate his start-up capital include;
- Generate from personal savings
- Source for soft loan from wealthy friends
- Apply for loan from the bank
N.B: From personal savings we were able to generate the sum of $15,000. Soft loans from wealthy friends amounted to $30,000. Having applied to the bank for a loan several moths back for the sum of $120,000, we have finally been given approval and would soon be in possession of the capital once our account is credited.
14. Sustainability and Expansion Strategy
Every business is established not only to make profit but to also ensure that it stays around for a long time. Therefore, any business that plans on being around for a long time would need to draft sustainability and eventually expansion strategies so as to ensure they remain in business for as long as they want.
One of the ways by which a business can remain in business for a long time is through its customers. Customers are the lifeblood of any business and have to be treated right always if a company hopes to retain a high number as well as attract potentials. Customers like it when a company listens and attends to their complaints promptly and also if their inquiries are well attended to.
Also, customers love when a business not only meets their expectations but surpass it as well, and so we intend to have different strategies to ensure that our customers stick to us. We intend to ensure that we use emails to constantly keep in touch with our customers and ensure that they are aware of new changes in either our services or policies as regarding the energy industries.
However, we will not be able to give our customers the utmost care if we do not ensure that we hire competent hands to deliver our goals and objectives. Asides from hiring competent and experienced staff, we intend to ensure that our staff is well taken care of, by ensuring that the right welfare package is in place. We also intend to constantly train and retrain our employees to enhance their skills as well as increase their productivity effectively in the workplace.
We know that if these two strategies are effectively put in place, we would be able to not only attract customers to our business and increase the bottom line of our company; it would also ensure that we are able to effectively compete with our competitors in the industry.
Check List / Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting feasibility studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party / launching party planning: In Progress
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
- Purchase of trucks: Completed