Starting a business is difficult regardless of the focus, but the energy sector has some unique hurdles entrepreneurs will be forced to overcome that they may not encounter in any other industry.
The energy industry has been booming in recent years. As engineers and scientists continue to find new ways to conserve and generate energy, business owners and industry leaders are challenged to incorporate this new technology into their business models. This technology includes electric cars and solar and wind energy alternatives, all of which have become more widely available over the years.
However, this technology is just a drop in the bucket, with tons of new product and service offerings emerging each year. This can become incredibly overwhelming, so it's essential that energy entrepreneurs not only understand the technology and how it could benefit their business model but also choose things that are both marketable and profitable.
Because much of this tech is expensive, not easily adoptable, or fairly confusing for the layperson to understand, very few energy advancements have made their way into everyday households and businesses. This makes it all the more difficult to sell such products to the modern-day skeptical consumer who relies on others' feedback to make decisions about what technology they choose to spend their money on.
The key to overcoming this issue is to improve sales and marketing strategies surrounding newer energy technology. "If companies can educate the consumer about how something works and show them how it will save them money in the long term, they are already halfway to making a sale," stated Adam Ferrari.
The next step is to make installation and adoption easy for their client so that the transition from their older energy model to the newer tech is both seamless and straightforward. If all of this can be done, companies will have a greater chance of success.
Another roadblock is the initial upfront investment required to acquire energy tech. While some businesses have little to no startup costs, companies in the energy sector generally need a significant amount of capital to get started. Equipment such as wind turbines, fracking materials, solar technology, or gas lines is not cheap and requires substantial monetary investment. Although some business owners may be eligible for specific grants from their local or federal government, most companies will need to rely on investors' help to get their business off the ground.
In addition to this, new energy companies must also navigate the ever-changing political and regulatory landscape, which may require an environmental consultant's help. This is necessary because many policies surrounding energy initiatives change as new political figures come in and out of office. Business owners will be subject to hefty fines should they inadvertently violate any regulation.
Finally, entrepreneurs are up against fierce competition in the energy sector. For decades, the industry has been dominated by a handful of established and prestigious monopolies with enough available capital to quickly acquire and distribute whatever technology they feel will be the most advantageous to their business models. Time and time again, new companies have been dominated by these competitors and have struggled to find their way in an already occupied market.
About Adam Ferrari
Adam Ferrari, an energy entrepreneur and CEO of Ferrari Energy, was educated as a chemical engineer and graduated magna cum laude. He worked in several companies, where he gained experience in both energy and finance before he eventually decided to establish his own mineral acquisition company, Ferrari Energy, in Denver, CO. In efforts to give back to the community, he supports organizations including St. Jude Children's Hospital, Freedom Service Dogs, Denver Rescue Mission, Coats for Colorado, and Next Steps of Chicago.