Everyone relies on energy to go about their daily lives, and this can make it seem like this sector is a great one to start a business in. While this does have the potential to be a lucrative venture, just like any business, it’s important to carefully consider the pros and cons of starting an energy company before you move ahead with your plans. If this is something that you are interested in pursuing, remember the following key considerations to help you formulate your final decision as to whether or not this is the right move for you.
1. Getting the Right Licenses
It’s not uncommon for businesses to have to go through various legal obligations to get started, and some do need to get specific licenses to operate legally. For example, restaurants/bars will need liquor licenses if they want to serve alcohol. If you want to start an independent energy company, you will also need to obtain the right license to do so. It can take around 12 months to get your electricity supply license and 4 months for your gas supply license. You will need these in place before you can start supplying energy to your customers. You’ll also be subjected to further licensing tests which include the financial health of your energy company to ensure that you can continue to keep up with customer demand and be responsible as their supplier.
2. Price Caps and Competition
Another thing to be mindful of if you want to set up an energy supply business is the price caps that are put in place. You will have to be realistic about your pricing strategies to make sure that you can still make a profit while still offering your customers a fair fee. It is also a highly competitive market with many other companies offering the same service, so you must carry out thorough market research to identify how you can compete in this industry and deliver top-quality service and prices to your customers.
3. Accessing Energy Supply
A lot of energy supply companies will buy energy wholesale and then sell this to customers, but some also get involved in the production of energy. If this is a path you want to take for your company, you will need to carefully consider how you are going to do this and find a suitable location for your power plants, including safe and environmentally sound generation of this energy. You’ll also need to consider the manufacturing side of things as you’ll need the right equipment to generate energy. If you’re going to manufacture these essentials yourself, you’ll need to find the right suppliers for these materials. For example, Righton Blackburns are suppliers of metals and plastics and cater to the power and utility sector.
4. Responsibly Sourcing Energy
Finally, you must consider how your company will impact the environment, and you must know how you will responsibly source energy to help combat the climate crisis. A lot of customers are now looking at greener energy suppliers as they grow more conscious of environmental issues, and this is also something that you can expect to be inspected by governing bodies.
Starting an energy supply company is not a decision that should be taken lightly, but it can prove to be a successful venture if you take the right steps and carry out vital research before putting your business plans into action. While there is a lot more than these points to consider, they are all good places to start.