I've been solo for about a year here in Raleigh working Duke Energy Progress accounts. A colleague approached me about partnering up - he handles the sales side, I do the technical analysis. Split would be 60/40 since I'm doing most of the actual audit work. Anyone have experience with partnerships in this business? My concern is that utility auditing requires such specialized knowledge that it's hard to divide responsibilities cleanly. Last week I found $31,000 in overcharges on a textile plant's account that involved understanding both demand response programs and manufacturing exemptions.
Structuring partnerships vs going solo - lessons learned
Steve, I've seen partnerships work but you need ironclad agreements upfront. The technical expertise is definitely the harder part to replace. Here in Memphis with MLGW accounts, I've had people approach me about similar arrangements. My rule is that if someone brings clients but can't do the actual work, they're more like a referral source than a true partner. I'd consider 70/30 or even 80/20 depending on what they're actually contributing besides introductions.
I tried a partnership arrangement here in Louisville about two years ago. Guy was great at getting meetings but had no clue about LG&E's rate structures. Clients would ask technical questions and he'd defer to me anyway. The relationship fell apart when he promised a client results I knew weren't realistic based on their usage patterns. Now I just pay referral fees - 10% of first year savings for anyone who brings me qualified leads.
Pete makes a good point about managing client expectations. I'm up in Rochester dealing with RG&E accounts and the technical complexity is what clients are really paying for. Anyone can promise to look at bills - understanding things like coincident demand charges or interruptible rate eligibility is where the real value is. If your partner can't speak that language, they're just expensive overhead.
You're all confirming my gut feeling. This guy is good at networking but when I showed him a complex demand charge calculation last week, his eyes just glazed over. I think I'll stick solo for now and maybe consider the referral fee approach Pete mentioned. The 60/40 split felt too generous for what he was bringing to the table anyway.
Smart move Steve. I'm solo here in Spokane with Avista accounts and frankly the margins are better without a partner. The business is relationship-based anyway - once you do good work for a client, they refer others. I get about 40% of my new business from referrals now. Build your reputation first, then worry about scaling if you get overwhelmed.