When the gas and electricity agency has significant growth but very tight margins

And the fear of not paying salaries

Do you recognize this situation?

• Gas and electricity agency, decent revenue with minimal profit (unsustainable margins)
  
• Several employees and collaborators to pay
  
• Significant growth in recent years
  
• But main concern: "Not being able to pay salaries"
  
• Many weekly hours worked, of which large part dedicated to prospecting
  
• Tiring situation: relationships with clients
  
• Goals: revenue growth, sales point expansion
  

And the fear is: more revenue = more stress, not more profit, all family income depends on this

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The trap of growth without margins

The company grows.

Significant growth in recent years.
New clients continuously.
Large part of time dedicated to prospecting (practically all operational time).

But the numbers don't add up.

Decent revenue.
Minimal profit.

Unsustainable margins.

You must pay:
Several employees.
Collaborators.
Operating costs.

Yourself.

And you have very little left per year.
Little per month.
With all family income depending on this.

You're not an entrepreneur. You're a cashier paying others.

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What happens when you grow without profit

On the economic front:
Decent revenue but minimal profit = margins below survival threshold.
Each new contract generates revenue but almost equivalent costs.
Significant growth? Yes, but in REVENUE, not in PROFIT.
More you work, more you bill, more you pay others, less remains for you.

Constant fear: "I won't be able to pay salaries" (always critical cash flow).

On the operational front:
Many weekly hours, of which large part prospecting.
You're a full-time salesperson, not entrepreneur.
Several people to manage with margins allowing no errors.
Each lost contract = immediate crisis.

Impossible to delegate acquisition: it's all on your shoulders.

On the clientele front:
"Relationships with clients" among tiring situations.
Probably: price-sensitive clients, who haggle every cent.
Commoditized gas/electricity market: competition only on price.
Client sees you as interchangeable intermediary.

High churn: client changes supplier as soon as someone offers less.

On the growth front:
Goal: double sales points and revenue.
But: doubling revenue with low margins = profit still low.
Minimal profit to manage many more people and double sales points?

Building larger prison, not freedom.

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Why it happens

You're in an affiliate/franchising business with commissions eaten by model.

Gas/electricity agency:
You sell contracts.
Supplier pays you commissions.
But commissions increasingly lower (saturated market, fierce competition).

And you:
Licensed brand (pay royalty?).
Franchise affiliate (pay fixed fees?).
Several employees and collaborators to pay.

Physical sales points (rents, utilities).

Result:

You work to pay structure, not to create value.

And more you grow with this model:
More revenue, same percentage margins, more complexity, more stress.

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The (wrong) path many try

Apparent solution: "If I double revenue, I double profit"

But if margins are very tight:
Double revenue = profit still low.
You work double for little more.

Don't double volume. Double margins first.

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The method

No longer grow without margins. Double margins before volume. Brutal margin analysis per contract type.

Not all gas/electricity contracts are equal.
Analysis: which client/contract type generates better margin?
Residential vs business, mono-commodity vs dual, long vs short contracts.

Find niche with significantly higher margins. Firing unprofitable clients.

Tiring "relationships with clients" = probably clients costing more than they yield.
Identify: which clients require most post-sale assistance?
Which clients have high churn?

Cut least profitable clients: free time, don't lose margin. Dramatic fixed cost reduction.

Several employees and collaborators with minimal profit = unsustainable.
Options: reduce team to core people (the best).
Physical sales points: necessary or can you do only online/home?
Counter rent = fixed cost eating margins.

Goal: bring break-even significantly lower. Pivot from volume to premium service.

Don't compete on "cheapest gas".
But: "Complete energy consulting: consumption optimization + solar + efficiency".
Upsell: gas/electricity client entry point, then sell energy audit (much higher margins).

Client pays for expertise, not commodity. Commission-only model for expansion.

If you want to expand sales points: DON'T hire more fixed employees.
But: commission-only agents (pay only on closed contracts).
Zero risk, infinite scalability.

You supervise, they sell, everyone wins.

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What changes after

You no longer fear not paying salaries.

Because you reduced team to essential core.
Because you cut unprofitable clients.
Because you optimized fixed costs.

Margins:
From unsustainable to healthy.
Same revenue = profit multiplied several times.

And if you then grow:
With commission-only agents, scalability without risk.
Double revenue with healthy margins = multiplied profit.

You no longer dedicate large part of time to prospecting.
You dedicate time to supervising agent network and optimizing operations.

You're no longer salesperson paying employees.

You're entrepreneur building profitable system.

And finally:
All family income no longer means "total vulnerability".
But stability built on healthy margins.

This is the turning point: when you stop chasing volume and start building margins.