As an energy broker, you may be even more aware of what most people take as a given—energy use goes down in the spring and fall months, and peaks during summer and winter. It makes sense, the more extreme the temperatures, the more buildings are going to need heating or cooling to combat the weather outside.
And higher energy costs lead to businesses looking to cut those costs, i.e. going through an energy broker such as yourself to find a cheaper supplier. But just knowing that doesn’t help you when your business is cooling off, even though the weather outside is pretty mild.
So how should you deal with seasonal highs and lows? What should your strategy be to protect yourself from marketplace turbulence? Take a look at some of the options we’ve put together for you.
The first thing you will need to do is make sure your budget lines up with the realities of seasonal fluctuations. If you’re going to make it through these ups and downs, you have to predict your cash flow into the future. Here are a few simple ways to do that.
Save for the worst-case scenario. It’s not always possible to do this, but you shouldn’t paint a rosy picture of the future when you’re riding high. Business will fall with more moderate temperatures, and saving for those times is half the battle. Being conservative on your estimates for these lean times will lead you to save more, and those savings can get you through tougher times when business isn’t booming.
Figure out your fixed and variable costs. This will help you budget better, as well. Know what you’re going to have to pay no matter what, and when cash flow tightens up, you can look to cut back on your variable costs.
Analyze the situation regularly. Having an annual budget is great, but with a seasonal business it’s imperative that you take a look at your finances either monthly or quarterly. Business can change quickly, and if you have a down quarter when you should have been bringing in a large cash flow, you may need to change your budgeting, as well.
Look for help when you need it. If you’re having trouble managing your cash flow, hire an expert in this field to do it for you. There’s no shame in hiring someone if your business is going to benefit from that help. At BOX, we understand that an energy brokerage is a complex business that can be subject to a seasonal rollercoaster. That’s why we offer EnergyEngine, a comprehensive software platform that significantly reduces the time and energy spent searching for suppliers and finalizing contracts. EnergyEngine is the perfect partner for an energy brokerage that is looking to expand into new markets and find new suppliers.
If you would like to grow your business on your terms, and not be held back by seasonal ups and downs, contact Broker Online Exchange today.
