This is the first decision to make. There are advantages and disadvantages to both approaches in terms of tax and how you access your income.
Option 1: Self-employed energy broker
If you're new to the industry and want to quickly and easily get started, the self-employed route may be for you. Simply register as a sole trader on HMRC, and you're ready to go. You'll need to complete a tax return every year - you may wish to use accounting software to help you keep track, or you can use an accountant if you prefer. When you start to receive your broker commissions, this income is yours to spend as you wish, as long as you put enough aside for your tax return. You don't need a separate business bank account to keep your money separate from business income.
You'll probably need to register as a sole trader even if your brokerage business is supplementary to an employed job.
Option 2: Setting up an energy broker company
If you plan to employ other people, or you're forecasting a high turnover, you may prefer to set up your own limited company. It's definitely a good idea to use a professional accountant if this is the route you go down. They can help you with things like what start up costs you can claim, what to do about VAT, and registering your business at Companies House. When your business earns money, you pay yourself with a salary or in dividends, as if you are your own employee. The company is a separate legal and financial entity to you.
The Big 6 energy companies generally don't negotiate with individuals or small businesses. Partnering with an energy aggregator like Evolve means you benefit from the buying power of brokers all of the UK, giving you lower rates that you can pass on to your clients. It also means you'll have access to tools that you wouldn't have access to if you operated alone: a CRM system (Customer Relationship Management) to help you track your leads, compliance support for legal peace of mind, and a UK based helpline if you're struggling with a supplier. Get in touch with us, we'll talk you through everything and if you're happy to go ahead, we'll set you up as a broker within 24 hours.
Once you're all set up as a broker, we'll provide you with a training session on our software and systems. You'll have immediate access to over 150 live rates, and a live stream of updates and notifications from energy suppliers. How much training you need will depend on your previous experience - there's no one size fits all and we want to make sure you have everything you need to start up your company.
Now the real work starts! Before you get started it's a good idea to make a few notes - why should these businesses go through you for their energy needs, what can you offer them? If you have previous experience in a sector this can be a great place to start, such as the leisure industry, education, even doctor's surgeries or corner shops. You'll be able to talk knowledgably about how they operate and build trust in this way. Use Evolve's CRM to track every conversation and set reminders to get back in touch.
If you're looking to seriously grow your business, it's likely you'll need to put some effort into marketing. If your leads are mostly word of mouth or personal connections you can probably get away without this for a while, but once you're speaking to business owners "cold" they'll want to know more about who you are, and why they should work with you. You can register your business for free on Google Maps (don't worry, you can hide your home address!) When you have happy clients, ask them to leave you a quick star rating. You can even set up a free mini website within Google for Business in about ten minutes.
It's a good idea to have a Linkedin page so if people look you up they can see your previous experience - Linkedin is also a great place to look for new leads. All of this helps to establish you as a credible business, not an annonymous voice on the end of a phone.
By following these steps, you'll be off to a flying start. If you have any other questions about how to set up your energy brokerage, just get in touch.