There is always a demand for energy, so starting your own energy supply firm could be quite profitable for you. Instead of a conventional energy supplier, you could venture into the renewable energy sector. In the future, there will be more demand for renewable energy as fossil fuels are depleting every day. You can choose to be a supplier of geothermal energy, wind energy or solar energy. Read on to find out how to set up an energy supply company:
Tips to set up an energy supply company
1. Decide on the type of Energy Company
A rising global population needs energy, and energy sources are finite and depleting. The dependence on fossil fuels has to decrease as they are going to run out sometime in the future. To prepare for that eventuality, as well as to protect the environment, we have to start gaining energy from renewable source.
Besides, concern for the environment have made governments all over the world focus on green energy and are providing many incentives right now to people who are interested in investing in renewable energy. Now is the time when you would get loans and grants easier than ten years down the line.
Market savvy entrepreneurs have started to set up an energy supply company which supplies green energy. You can be a green entrepreneur too, and start an energy company which provides solar, wind or geothermal energy.
To decide which type of Energy Company you want to invest in, you should see which renewable energy is being already used in your area, and which can be easily generated. If you live somewhere along the coastline, you might choose to invest in wind energy. Or if you live in a place which has strong sunlight, then solar energy could be the right choice.
An energy supply company is one of the best renewable energy business ideas, as the demand for energy is going to increase not decrease. Your company would be good for the environment and provide an alternative to people who seek to use renewable energy, instead of conventionally derived energy. You can make a good profit in it, too.
2. Apply for a patent
Depending on your idea/concept of company, you should apply for a patent in your country, and around the world if required. This is because every energy company has its own schemes for the benefit of customers or the rates are different or you may have a completely new and innovative concept. You have to protect your concept when you set up an energy supply company, and patents can help you do that. Your patents should be in place before you meet with potential investors, so that no one can misuse your concept.
3. Do your research
If you want to be an energy broker, and set up an energy supply company, you should do a lot of research on every aspect of the renewable energy industry. Ideally, you should read about recycling as well and also about green energy which is generated from trash, apart from the other green energy. Once you get to know the market, you may be able to find the right niche for you. You will also get to know the profit margins you can expect from your start-up.
4. Find your target customers
There is a lot of talk about sustainability, but when it comes down to it, consumers still look at the cost factor. They want to pay the lowest cost for energy, so you have to find out what the price for renewable energy is in your area.
If there is already a renewable energy service provider in your region, then you have to find out whether your company can match their prices or offer lower prices/rates. If your cost is higher, then you would have to spread awareness about renewable energy, and explain the value addition to your customers. If you can offer a lower rate than your competition, then your efforts as energy broker will have more success initially.
Your target customers may range from individuals, schools and colleges, offices and other establishments. You could even meet some potential customers and get to know their requirements first hand, which could help to set up an energy supply company.
5. Develop Business Plan
While devising your Business Plan, you can look to other similar service providers in your region. Study them carefully and use their fundamentals to base your business plan. Whether you plan to start small or start big, to become a successful green entrepreneur, you must have a detailed business plan, clearly setting your goals and milestones.
6. Pitch for investors
To set up an energy supply company, you will need money. If you have enough money to invest and wait for returns, and enough money to sustain you before the profit starts showing then it’s a good option.
But instead of investing all your savings into your company, you can invest an amount you are comfortable with, and market your idea to investors. You have to be savvy enough to work out deals with the right investors, who have a good reputation in the industry. Banks and government grants are sources for finances.
Why not start a crowdfunding company, funded by your family, friends, neighbours and others in your community? Everyone will benefit from the energy company set up by you, and if you start a renewable energy supply company, your area will benefit from the clean energy. A couple in Scotland has used crowdfunding to create their energy company and have promised to give its customers 75% of the profits.
7. Consider market stability/instability
Many energy companies are forced out of business as they cannot cope with the vagaries of the market. Will your company be able to withstand lower rates which you might have to give at some periods of the year?
Setting up an energy supply company is one of the better renewable energy business ideas, as the demand for renewable will increase with time. You have to remember this and get enough finances to tide you over till you start making profits.