The decision to become an independent energy broker isn’t easy.
There’s more risk: you’re responsible for your own business, not someone else’s. Your decisions will have bigger impacts on your life. Not only that, you need to build supplier relationships, get licensing, possibly develop new customer relationships. It’s a lot of responsibility all at once.
But it comes with many benefits: you’re your own boss. You don’t give up the majority of your commissions. You have freedom.
In this post, we’ll help you weight your options so you can make a more informed decision in regards to your independence.
Do You Know the Industry?
Many people jump straight into the independent broker world, even without much experience. They go from a tangentially related industry – for example, real-estate – and become a full-fledged energy broker overnight.
The problem with this is that the energy industry is complex. Hoping you’ll ‘get the hang of it’ is a huge risk. There’s enough competition out there that the learning curve can be steep – and the market unforgiving.
We’ve watched dozens of brokers become independent. There are some success stories from people who jump right into it, but more often they start out strong and fizzle away. It turns out selling energy isn’t necessarily as easy as they think.
(For those who want to get into the energy industry from another sector, you can start out with a simpler program, like an affiliate seller partnership. That will help you get to know the industry without taking a huge, time-consuming risk).
By far, the most successful brokers know the ropes. They’ve sold for suppliers or other brokerages. They understand how suppliers work, how customers buy and how the market can change. This means that once the initial startup is complete, they can hit the ground running.
Do You Have the Connections?
Even though you’ll be independent, you’ll be better off if you have some quality connections. You’ll need supplier relationships and new customers, neither of which are easy to come by.
Let’s take suppliers, for example. You’ll certainly want some top tier suppliers in your toolkit. A bigger name is better: your customers will find comfort in familiar names and you’ll have more competitive rates.
But big suppliers aren’t always keen on taking new brokers. They face risks when they accept brokers—will they pay off? Will they close legit deals? Or will they waste the suppliers’ time? As a new broker, you’re at a disadvantage.
Unless you have a connection into the supplier, that is.
Do You Have the Strategy?
We’ve seen newly independent brokers win big in just a few months. But that’s almost always because they’re ready for growth and development.
For example, brokers should always plan for changing financial requirements. At first, you’ll probably want upfront commission payments until you steady your cashflow. As you get established, you’ll want residual commissions with better splits.
The challenge is similar to the supplier challenge: getting upfront payment plans while relatively unknown. Again, you’ll need good connections or a stellar reputation to get upfront payment plans from quality suppliers. Even that might not be enough.
The risk for suppliers is even larger when it comes to upfront payment plans. They’re not only trusting that you’ll be worth their time, but also that your deals won’t fall through. It’s a lot to ask a supplier to trust someone they’ve just met.
You should also consider other factors early on: when’s the right time to hire employees? Will I expand into new territories or states? If you have a clear plan, you won’t be caught by surprise when you find success.
Do You Have a Reliable Partnership?
You can alleviate many of the challenges above with a strategic partnership.
An energy partner can give you instant access to all the nation’s top suppliers. This gives independent brokers a huge head start: there’s no need to tirelessly build a reputation and relationships before your business booms—you just start selling instantly.
Through a partner like BOX, you’ll gain unique advantages to help your business take off in days, not months:
- Upfront and Residual commission payments from all 75+ suppliers.
- The ability to piggyback off our licensing for instant expansion into new markets.
- You can leverage our licensing for new hires to reduce the time before they produce sales.
- Access to business support so you can reduce administrative work and sell more energy.