How to manage volatility in the energy industry

May 18, 2023 By    

Fuel dealers, wholesalers and service contractors face a wide range of challenges in the energy industry.

From seasonality, inflation and politics to the people who depend on their business, these outside forces can make it difficult for dealers to generate a stable stream of revenue. To ensure success and grow their business, fuel dealers must develop a well-thought-out strategy.

Strategic planning

Photo of Kendall Rawls


Through collaboration among owners, key management and outside advisers, the strategic planning process facilitates conversations to develop and agree on the vision and mission of the organization and the resources needed to achieve objectives. The result of this process is a comprehensive action plan that outlines short- and long-term goals, operational strategies, personnel recruitment, a suitable business model and clear communication. This plan will then become the guiding light to steer the business and future succession.

Discussing weaknesses with your team and engaging in strategic planning can help to identify your strengths and opportunities. You can then evaluate which outside business lines could fit in your existing setups, such as HVAC, home energy audits, concrete, pest control or landscaping. By taking this step, you can better insulate yourself against change. Furthermore, it is possible to develop strategies and identify resources to address performance issues.

Budgeting strategies

Creating an operational budget is essential to measure and compare a business’s past and current performance. Many businesses lack a proper budget, leaving them unable to identify issues or deficits. For example, dealers might find themselves in their third week of the month and down 20 percent on degree-days, with no plan on how to address the deficit.

Dealers often have a budget, but they might miss key performance metrics. One of these is the number of drivers needed to support the business. Many dealers are unaware of how to calculate this metric, such as delivery efficiency, the number of service calls in a day and the number of installations.

Manpower is a major expense in this business, second only to product cost. Despite this, there is a lack of appreciation and recognition of the work involved in creating a budget that maximizes opportunities.

Breakeven analysis

One powerful tool that can help dealers maintain control of their budgeting is a breakeven analysis. This analysis enables them to understand precisely how many gallons they need to sell to break even, as well as the margins required to generate a profit. By leveraging this tool, fuel dealers can proactively adjust their margins during times when gallons sold are lower than expected and optimize their profitability.

Kendall Rawls addresses attendees. (Photo by LP Gas staff)

Kendall Rawls addressed attendees at the 2022 LP Gas Growth Summit. (Photo by LP Gas staff)


An effective strategy that can help insulate dealers from the seasonality of the business is diversification. By exploring and incorporating other products and services that they can offer outside the winter season, dealers can generate additional revenue streams that offset the fluctuations in their winter revenues. Diversification also can help to mitigate the impact of external factors like politics, inflation and the speed and change of technology that can significantly impact the energy industry. Embracing diversification can help fuel dealers achieve a more stable income and enhance their financial resilience in a rapidly evolving business landscape.

Standard operating procedures

To achieve sustainable revenue growth and success, the talent, teamwork and reliable systems must be in place for employees to adhere to, providing standard processes for tasks. Without this, people will use their own methods of working, leading to inconsistencies and inefficiencies within the organization. Establishing an efficient workflow that saves time and money is essential to reaching profitability and generating margins.

Taking control of your future

By seeking expert advice and dedicating time to work on your business, you gain greater control over your envisioned future. Taking a proactive approach to addressing the issues creates a range of options that are available at your disposal.

Kendall Rawls is director of development with The Rawls Group. Visit, call 407-578-4455 or email

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