Starting and growing a company is not easy. Entrepreneurs go through a lot to create value. If you are running an oil and gas company, you might be thinking of ideas and strategies to take the business to the next level. The big question on your mind today might be: what is the best way to grow an oil and gas company?
The best way to grow an oil and gas company is by ensuring you unlock your cash flow bottlenecks, leverage on technology and create the most value to your clients.
Starting an oil and gas business in general is not easy. However, once you have it going, growing the oil and gas company or business is a different story altogether.
I took some time to research and bring you ideas that you can use to grow your oil and gas business, across the entire value.
This means you can use these tips in whatever business you are doing in oil and gas industry.
13 Ways to Grow Your Oil and Gas Industry Today
Now, if you are keen to see growth of your oil and gas company, the following tips and ideas are going to help you do that.
- Build Your Network.
- Continue Learning.
- Study Your Customers.
- Manage Your Cash Flow.
- Use Technology.
- Leverage Data Analytics.
- Embrace Cost-Cutting Ideas.
- Business Integration.
- Adopt New Revenue Models
- Consider Consolidation.
- Think Ahead.
- Hire the Right People.
- Refine Your Marketing.
These are some of the ideas and tips that I have found out from my research. You can use them, and probably add others, to grow your oil and gas company.
I would actually be interested in knowing what other ideas you are using.
For now, let us dig deeper into these tips.
13 Key Tips to Grow Oil and Gas Company Today
If you are serious and ready to do what it takes to grow your oil and gas company, this is a deeper look at some strategies you can use.
Implementing these will provide you with an opportunity to achieve the growth you are seeking.
Now, let us discuss how you can grow your oil and gas company in today’s market or industry environment.
Build Your Network.
You never know who you are going to meet on a day to day basis.
In the oil and gas industry, you meet many people that handle many different aspects of your work. It is important that you make as many connections to these individuals as possible.
It does not matter if they are in the acquisition, exploration, or production sector. In some way, you are likely to meet someone that can further your knowledge of their industry or even further your success in certain aspects.
Making connections is an organic way to begin building a professional network and reputation in the oil and gas field.
It is important to remember that when you focus purely on personal gain, your business will suffer. See your business’s success as a team effort that can only be bettered with more, appropriate, partnerships.
Smart partnerships lead to better business.
In the early stages of your business, you will likely see a very lean profit margin (or no profit at all), so any money you do make should go directly toward helping you grow.
“A startup’s ability to invest in itself helps accelerate growth”
Learning, un-learning and re-learning is and should be continuous.
This does not matter if you are just starting in the oil and gas industry or if you are a seasoned entrepreneur or professional. Do not stop learning.
Study and stay up to date on all aspects of the oil and gas industry and constantly challenge your business. I am not saying to follow each and every trend that comes your way.
Study the trends and challenge them against your business to see if they would make improvements or just make a mess of your business.
Staying up to date in your field is a must. Prices, equipment, and other aspects of your industry are constantly changing. Do not be the last to know.
Give your business the advantage it needs by being the first to know, understand, and use the newest trends to your advantage.
Study Your Customers.
A smart business studies not only what its competitors are doing, but more importantly, studies and understands customers.
This helps your business make fewer mistakes and make the right decisions faster with less work.
Studying what your customer’s needs and establishing the best way to respond to those needs will help your business grow.
Studying the tactics that failed and brought success to the competitors in your business plan will help bring you success in the future.
Implementing strategies that will help you retain or get more customers to your business can help you expedite your success. Do your research and choose the best plan for your needs, not anyone else’s.
Manage Your Cash Flow.
One of the best ways to grow your oil and gas company is by managing your cash flow.
For example, the use of invoice discounting is beneficial in many ways. One of them being that you can be able to control your cash flow in a better way.
Due to the invoice-based nature of your business, you are constantly waiting for invoices to be paid and processed by your clients.
With oil and gas invoice factoring, you can get up to 96% of your invoice total in your pocket in just 24 hours with low rates.
This will help your business build up a strong source of working capital that will make it easier than ever before to tackle unexpected expenses that come your way.
With oil and gas invoice factoring, you will never have to worry about cash when growing your business.
By utilizing invoice factoring in your oil and gas business, not only will you have instant access to the money owed to your business, but also have the resources you need to grow.
This financial service can help your business secure a strong source of working capital that will make growing into new markets, segments, and making partnerships easier than ever before.
You should talk to your bank or financial partners to find out how you can use this to grow your oil and gas business.
Technology revolutionizes industries, and in oil and gas production, there are trends to watch out for all the time.
Adopting new production methods, for instance, can cut costs, boost efficiency, and build your company’s reputation.
It’s also easier to comply with increasing environmental regulation with new technology.
Some of these new technologies include:
- Cloud-based platforms: To safely host business applications, sub-surface, land, and production systems.
- Adoption of IoT devices and edge computing: Rise of effective data technology using sophisticated sensors. Use of edge computing devices allows better connectivity.
- Data and data technologies: Big data in the oil and gas production industry is crucial. New technologies such as business analytics, blockchain technology, and AI system have improved efficiency in data governance.
- Asset management software: There are new tools to manage oil fields and assets held by oil companies. Such software improves management of resources, reduces risks and generates invaluable data for decision making.
- ‘Smart oilfield’ technology: There’s more automation of processes in the oil industry. This technology seeks to sync all systems and assets across your company’s field of operations. It makes monitoring easier and provides great insight into every aspect of your operations.
It is important that you find ways in which to leverage technology to grow your oil and gas company.
This is one of the best ways in which you can scale your oil and gas business.
Leverage Data Analytics.
Data is one of the most important assets for any business today. If you are after oil and gas company growth or expansion, am sure you have created a strategy founded on data.
Your oil and gas company requires incisive insight into the state of the market at all times. More importantly, you need real-time data on the performance of your equipment and all systems in your organization.
It is also important for your field managers to access real-time data for quick and fast decision making. In oil and gas production, delayed decisions can cost your business.
You can do all this by using data analytics.
For example, I have recently set up an oil and gas blog, which is basically an oil and gas online business. In that blog, I am using Google Analytics to track a host of metrics that inform me how the blog is performing.
Similarly, wrong decisions can lead to devastation akin to the BP’s 2010 Deepwater Horizon oil spill.
To avoid such accidents and keep your business running, you need a solid analytics platform.
You can partner with the best software providers to create a custom analytics tool for your business. The best software developers offer managed services and run these data tools remotely. They deliver real-time analytics reports for your team.
Such data helps you comply with the stringent regulations in the industry. Using this data also gives you a competitive edge.
Embrace Cost-Cutting Ideas.
In a large industry such as oil and gas, most business owners feel the urge to spend more in research, personnel, new equipment, among other things.
For a long time, oil companies have survived through constant expansion and pushing the boundaries. The high demand for oil across the globe has always served as a cushion for poor financial decisions.
Things have changed and today, you need to embrace a tough cost-cutting strategy.
The falling revenues, stringent regulatory guidelines, rise in offshore production prices, competition for alternative energy and geopolitics necessitate a rethink in the industry.
If you want to survive in the oil and gas production industry, you have to adopt new cost-cutting ideas. The idea is to get more oil from the ground at a lower price per barrel.
Some of the cost-cutting ideas include improving horizontal drilling techniques, drilling longer wells with more frac stages and super fracking.
Other cost-cutting strategies include staff cuts, new project postponement, optimizing operations, supply-chain collaborations, and new technologies to boost efficiency.
Another best way to grow your oil and gas company is to integrate your business.
Oil and gas supply chain is complex. It is a behemoth.
A lot of money goes into the business of running supply chains. As companies focus on research exploration and production, they leave everything else to third parties.
Outsourcing equipment and services to multiple providers can complicate your operations. You will have to deal with multiple suppliers which call for more capital injections to manage their accounts.
The idea of vertical integration has gained traction over the last few years. This is an arrangement where your business takes ownership of the supply chain. It reduces coordination costs.
Like I said, you should consider business integration as a growth strategy for your oil and gas business.
Adopt New Revenue Models
It is important to explore new ways of unlocking cash flow issues for your oil and gas company.
New revenue models proposed by oilfield services and equipment (OFSE) companies have emerged in the industry. These include participation in project financing and performance-based contracts.
These new revenue models offer your company flexibility during lean economic times. The oilfield companies offer your business a lifeline to continue operating in a volatile business environment.
You don’t have to set aside cash during such times. It is easier to access equipment and services through these innovative revenue models.
One other example of this is using leasing to finance your oil and gas business. There are many benefits of leasing.
Your business will never stop exploration or production due to cash flow problems.
If you want access to oil and gas capital, it is important to talk to a reliable financial partner in the industry. Look at the financing options available and ask for tailored financing from the provider.
Mergers in the oil and gas industry are on the rise and for a good reason.
Consolidating similar businesses is one of the best ways to grow oil and gas company. It is one of the ideas for expanding a business. It creates the synergy necessary to survive in this industry.
You should consider looking for partners in the supply chain and merge to optimize operations. It is also possible to consolidate operations with other oil and gas businesses to increase your market reach.
Coming together helps scale your businesses and boosts your new brand. It is one of the most effective ways of building capacity in a capital-intensive industry.
Merging unlocks your potential and improves the chances of surviving the volatility common in this industry.
While agility is an important quality for a start-up, you cannot fly by the seat of your pants when you are running a business.
Planning your next step, even if that means anticipating all possible scenarios, is the best way to stay grounded and secure as your business evolves.
To grow an oil and gas company, you will need to think ahead, understand trends and anticipate scenarios.
Hire the Right People.
Before you can even think about your company’s growth trajectory, you need to ensure that you have a solid staff that can help you achieve it.
One of the best ways to grow an oil and gas company is to have the right team on your side. It is like a sport, where it helps when you have the right players to win.
Your team need to be people who are not afraid to work hard to grow your business.
Hiring the right people is a great way to ensure you oil and gas grows fast.
Refine Your Marketing.
Reaching your target audience through proper channels and by delivering the right message is paramount for making sales.
If you are not getting the results you want from your marketing efforts, it is time to fix your strategy.
Old marketing techniques can hurt your overall marketing strategy. In today’s world, you need to embrace and utilize recent digital technologies.
You should ensure you stay in the loop by researching different options can expose you to new ideas and keep your marketing from becoming stale.
For example, videos are one of the new and biggest marketing opportunity today. Therefore, you should find a way to add it into your marketing strategies or plan.
If you are trying to establish a presence online, maintain a consistent posting schedule, post quality content, and interact with your audience on a regular basis.
It works too in building relationships using emails. Ensure you send out newsletters at certain intervals so readers won’t forget about you.
While it would be great if every marketing technique you tried worked flawlessly, that is not usually the case.
A big part of success is trial and error, so you cannot expect miracles overnight.
Taking the proper steps to correct inefficiencies should prevent you from repeating the same mistakes.
By getting your message to the right demographic through the right marketing channels, you will likely see good results.
Challenges Facing Growth of Your Oil and Gas Company
There are a lot of issues that affect the oil and gas industry.
Your business can be impacted by global political issues, depressed economy and low or destruction of demand.
- Cash flow challenges.
- Fluctuating oil and gas prices.
- Rising costs of production.
- Negative industry perceptions.
- Increase in clean energy adoption.
These are some other major hurdles you have to overcome in order to grow your oil and gas company.
Opportunities for growth in oil and gas sector are many, and am here to share with you ideas of how your company can grow to benefit from them.
In conclusion, the oil and gas industry moves from boom to bust in a few months or years.
In such an environment, you should think about how to grow your oil and gas company.
I think it is one way for you to ensure that you company or business survives. After the market turmoil in 2020, including negative oil prices, it is very important that you find ways to grow your business.
Based on what I have discussed with you above, you should start by identifying risks and weaknesses in your operations, understand your cash flow and have the right team to grow your oil and gas business.
Growing your oil and gas company should be a priority. As an entrepreneur or investor in the industry, I am convinced you want to build a business that lasts.
I hope you have enjoyed this resource and wish you all the best as you grow your oil and gas business.