Episode #501: Lowering Energy Costs for Health Clubs-with David Energy CEO, James McGinniss

James McGinniss is the Co-Founder and CEO of David Energy, a technology-enabled electricity provider that caters primarily to multi-location businesses, quick-serve restaurants, and fitness brands, with a special emphasis on the latter. A mechanical engineering Master's graduate from the University of Texas, James was drawn to the renewable energy sector during a significant solar and wind power boom in the state. Witnessing firsthand the economic opportunities in solar, he recognized this as a pivotal moment in the industry and was inspired to contribute to the burgeoning field. David Energy aims to solve various energy-related challenges for its clients, leveraging technology to enhance efficiency and sustainability.

MCGinniss also discusses how their platform not only offers lower and fixed pricing to safeguard against market fluctuations but also leverages smart technology to optimize energy use and drive cost savings. They explore case studies, including a compelling example of a fitness franchisee saving $11,000 in energy costs in just the first year. Pete and James also touch on the broader implications of these savings, from enhancing business valuations to providing peace of mind for owners wary of scammy energy rates. 

There are a variety of things that can happen where owners end up paying much more than they have to. James states, "The provider could miss-bill them for the wrong amount of volume. There's something called slamming, where providers just fraudulently sign up locations to their electricity supply rate, without the the owner knowing, because they've done it with the GM on-site or something. They could be paying twice as much as they should be . . . and there's a lot more."

Key themes discussed

• Enforce thermostat rules, monitor HVAC, audit bills.
• Business models sharing savings, diminishing returns concern.
• Understanding electricity providers, regulation, and competition.
• Energy cost savings through efficient energy management.
• New technologies transforming energy use and distribution.
• Options to lower fixed costs and implementation.

A few key takeaways:

1.  James discussed how his company stands out by providing fixed electricity rates to protect customers from market price fluctuations. This financial predictability helps businesses plan their budgets more effectively.

2. David Energy primarily targets multi-location businesses. Their technology-driven approach, involving smart thermostats and energy monitoring, has proven effective in reducing electricity costs.

3. The company’s process for onboarding new customers is designed to be efficient and minimally disruptive. Signing a contract, setting a start date, and installing necessary devices can be completed quickly, sometimes in just a few hours.

4. David Energy works with a range of businesses, from small gym owners to large corporate clients, aiming to provide substantial savings opportunities. Their mission is to bring advanced energy technologies to segments that have previously lacked access, thereby simplifying energy optimization for owners who lack the time to dive into this further.

5.  Pete emphasized that the energy cost savings achieved through David Energy could significantly impact the valuation of a business. He suggested that the savings could multiply the business's sale price by 5 to 8 times the initial savings amount, highlighting the strategic importance of energy optimization in business planning.

Click here to download transcript. 

Resources: 

• David Energy: https://bit.ly/david-energy 
• James McGinniss: https://www.linkedin.com/in/james-mcginniss-20b315101/ 
• Prospect Wizard: http://www.theprospectwizard.com
• Promotion Vault: http://www.promotionvault.com
• HigherDose: http://www.higherdose.com 

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