Your Guide to Starting Your Own Energy Consulting Firm

In many cases, people’s energy conservation efforts end with them turning off lights when they leave the room. While doing so is important, it’s clearly not the whole picture. People and companies waste energy and pay for it with higher utility bills. Many of them know that they want to change their energy consumption and expenses, but they don’t know how or simply don’t focus on doing so.  

Energy consulting firms—whether small, large, or consisting of one energy consultant (you!)—work with individuals and organizations to give them insight into conserving energy, saving money, and otherwise developing an energy and utility cost-efficient home or workplace.

What Is Energy Management Consulting?

When working with a household or corporation, a company’s energy efficiency consultants assess a household or company’s energy consumption histories, needs, and goals. They consider the technologies available for conserving energy and how they might be applied to the situation at hand. They develop reports that recommend ways to become more energy efficient so that households and companies can save money, conserve energy, and become more “green.” In some cases, energy efficiency firms implement recommendations or collaborate with other companies to install solar energy, incorporate power-saving lights, insulate buildings, or take other actions that promote energy efficiency. 

How Can I Start an Energy Efficiency Consulting Business?

Here are some things to consider about building your own consulting business:

• Do you want to run your own business? Are you ready to engage with the responsibilities and challenges inherent to most entrepreneurial endeavors?
• Do you have the time and resources you need to start your business? Can you pay for registration fees and advertisement for your business? Do you have money to live on as you build your customer base?
• How much experience do you have working in the energy management and efficiency industry? Do you have enough knowledge and experience to provide your firm’s customers with the information and guidance they need? If not, do you know of people and companies with whom you can contract to be of service in the way you intend to?

Building Your Energy Consultancy’s Website

A website is often a potential customer’s first interaction with a business. Therefore, designing your website such that it engages visitors and invites them to contact you is important. Here are some things to consider:

• Many people are not familiar with energy efficiency theories, technologies, and practices. Provide clear content that explains what you do in simple, accessible language—use layman’s terms! Avoid using specialized terminology or, when you do, provide a clear definition of what it means and how it applies to the average household or business.
• Provide specific evidence of how your services have saved households and companies money. While some people seek to conserve energy for the sake of the planet, many others do so to save money. Even if your primary concern is protecting our planet’s resources, provide information to your customers that addresses their concerns: saving money.
• That said, many people do indeed care about the planet. Consider devoting a portion of your website to clearly describing how your services affect and protect our planet’s resources.
• Do the research so that your customers don’t have to. Describe your services and provide simple facts and figures that back up the benefits of your services. For customers who want to sink their teeth into the benefits of your services, provide access to research and articles that offer scientific evidence and support. Some people are easily convinced by simple, straight-forward information; others want scientific evidence that the steps they might take to conserve energy are viable and important
• Provide testimonies from clients satisfied both with your work and with the results of your work.
• Tell your customers about your company. Remember that they’re not only hiring a company who can help them become more energy efficient—they’re hiring a brand. Your company’s background and reputation may help customers choose you over another consultancy.

How Can I Build My Clientele for My Energy Efficiency Consulting Firm?

First and foremost, begin building relationships now. Every household and company on the planet uses some energy resources, and most of them would like to save money. This means that while you’ll ultimately want to advertise to your target market, developing relationships with people and companies outside of your target market won’t hurt. You never know when they or someone they know might want to use your company’s services.

Otherwise, you might consider drumming up business for your energy consulting firm in the following ways:

• Place signs in past or current customers’ yards or in public parking lots and describe how much money and energy potential customers may save. Add your website and phone number to the sign.
• By working with architects and builders interested in building “green” or promoting their products (houses and other buildings) as energy efficient.
• By contacting companies that may use large amounts of energy and may have an interest in lowering costs, like factories, hospitals, production firms, and college campuses.
• By reaching out to small businesses for whom saving money—even small amounts—is critical.
• By developing relationships with companies that provide services your customers might use (solar companies, window companies, insulation companies, etc.). You can refer customers to them, and they can refer customers to you.
• By putting a magnetic advertisement on your car(s) that explains what you do and how people can reach you (keeping in mind that people’s primary concerns are saving money and “saving the planet”).
• By placing fliers in stores that energy-conscious people might frequent (such as health food stores, outdoor recreation stores, technology stores, and others).
• By contacting environmental firms and governmental agencies to see if they need consultants for particular projects.

What Organizations Can Support Me As I Build My Energy Consulting Firm?

The Association of Energy Services Professionals (AESP) is a professional organization for people in the energy efficiency industry. Through membership, energy efficiency consultants gain access to benefits such as a resource library; “brown bag webinars” where professionals learn about current issues, relevant case studies, and new technologies; topic committees; monthly e-newsletters; an annual national conference; networking; training; and a member directory.  Depending on where they live, they may also gain access to a local chapter.

The Energy Professionals Association (TEPA) has a mission to support its members and the energy industry by creating opportunities for energy professionals to network, championing ethical standards, and sharing knowledge that will support the integrity of deregulated retail energy markets across the country.  Membership gives professionals access to the energy industry’s top leaders, legislators, and thought-leaders.

The United States Energy Association is an educational association with a broad membership consisting of major players in all sectors of the American energy industry.  It consists of public and private energy-related organizations, corporations, and government agencies, including those connected to gas and oil. Membership in this organization could help energy efficiency companies understand the political and economic landscape in which they’re building their business. Members may also gain a better understanding of the energy-efficiency climate in the U.S. and abroad.

What Kind of Business Overhead Might I Have as an Energy Efficiency Consultant?

The good news about being an energy efficiency consultant is that you might not have much initial overhead.

First, you can technically run your business with just one employee—you. So long as you’re willing to handle your own advertising and administrative responsibilities, you could feasible consult and run your business on your own. Should you need other people’s services—to incorporate your recommendations for customers, for example—you can simply contract with other companies and utilize their employees.

Second, you don’t necessarily need to rent a space to run your consultancy firm. You may be able to just meet customers at their homes or businesses to assess their needs. You can write your reports and conduct other business from your home office (which you may be able to write off as a business expense). If you don’t have a home office or prefer to meet with customers at your business, you could rent a smaller office or even one room of a larger office or business center. You might even consider renting space in a co-working facility with other consultants and entrepreneurs working in your industry.

Third, you don’t necessarily need insurance or licenses unless you plan to actually incorporate recommendations yourself (by installing solar, for example)*.

Your largest expenses might be registering your business (you can determine your expenses for this through your Secretary of State), advertising and marketing your business, traveling to make sales, and purchasing business attire (so that you present yourself as a trustworthy professional!). 

All of this said, you might ultimately grow your firm to include multiple employees or even other consultants. The expenses required to start and run your business depend on its size and scope. You can address these when you put together your business plan.

Do I Need a Degree to Be an Energy Efficiency Consultant?

Because the field of energy efficiency is broad and ever-changing, energy consultants must have expansive knowledge of energy issues across industries. Therefore, many energy consultants have earned or pursue an associate’s, bachelor’s, or master’s degree in energy efficiency or related disciplines such as environmental science or electrical, mechanical, or civil engineering. Consultants might also earn a certificate in a subject such as renewable energy, energy efficiency, renewable energy technologies, or renewable energy engineering.

Creating Your Energy Consulting Company’s Business Plan

Developing a business plan is a powerful way to distinguish your services and plan your road to success.

According to the U.S. Small Business Association, business owners should include the following in their business plans: an executive summary, a company description, a market analysis, a description of a business’ organization and management, a description of a business’ services, a marketing and sales plan, a funding description and request, financial projections, and an appendix with any other key information.

For your energy consulting firm, you might especially focus on developing your company description, conducting a market analysis, describing your business’ services, creating a marketing and sales plan, and establishing financial projections.

By focusing on these elements of your business plan, you’ll be able to develop a strong narrative of what kind of consulting you provide, why customers should pick your company, what services (beyond and including consulting) your firm provides, and how the company intends to develop and grow its customer base. By having this information, you can determine what actions to take, begin to predict your company’s financial future, and determine how you might expand your consulting services over time.

**This information is for informational purposes only and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal or accounting advisors before you act, or fail to act, upon this information.