Opening up your own gas station isn’t a super simple process. And because it isn’t your average business venture, it can seem pretty difficult to come up with a business plan. But that shouldn’t push you away from creating your own fuel station business. Creating your business plans means you’ll need to keep a lot […]
Opening up your own gas station isn’t a super simple process. And because it isn’t your average business venture, it can seem pretty difficult to come up with a business plan. But that shouldn’t push you away from creating your own fuel station business.
Creating your business plans means you’ll need to keep a lot of things in mind, ranging from your financial situation, the services you want to offer and the type of gas station you’re looking to make.
But why a gas station? That’s because we’re talking about a very profitable industry, one which is expected to value almost $3.1t.
By creating your master plan, you’ll be able to capitalize on a growing market. We’re going to list down all you need to know about your new gas station. By the end, you’ll have a plan that you can place your entire trust in.
One of the many questions that people have in mind when we talk about a fuel station business is: Why a new gas station? Is owning a gas station profitable? If you haven’t ever given it a thought, this whole plan may look a little absurd to you. But you’ll be surprised!
You see, the gas station business is actually a lot more profitable than you might think. In 2023, the petrol station business market was noted to be at $2.4t! And in the next 10 years, that number is estimated to jump up to around $3.1 trillion! That’s right, this market is growing a lot faster than a lot of people know, with a CAGR of 2.5%.
By just glancing over the fuel station business market, you can see that there’s definitely potential for a very lucrative plan. But where is all this growth coming from?
The gas station market is growing because of a lot of changing customer preferences and many new advancements. Our world is quickly shifting towards more ecofriendly products. And this worldwide shift has significantly changed many markets, along with the fuel stop market.
With a greater focus on environmentally friendly products, we’re seeing a large increase in electric vehicles. With more people wanting more electric cars, gas stations are also moving towards diversifying the services they offer. Nowadays, you’ll find a lot of gas stations looking to cater to the increase in electric vehicles.
As we said earlier, there are also consumer preferences. Consumers love convenience more than anything. And that’s why many fuel station businesses are moving towards online transactions. Now, instead of having to carry around cash to get some fuel, you can simply use any online app!
The gas station market is also seeing a big change in the convenience stores. These stores are starting to expand the products that are offered due to increasing customer demands. You’ll also see many small quick service restaurants available to increase the number of customers visiting gas stations.
When you’re aiming to figure out how to own a gas station, you’d first need a business plan.
Having a good business plan helps keep everything in check. It’ll consist of many sub-plans such as a focus on securing funding as well as a general overview on how you should be working.
You should also know that for a fuel stop business, there are a lot of barriers to entry. The biggest of them all is: Cost. If you don’t have the kind of money to bypass this yourself, you’ll need funding. And getting funding isn’t possible unless a plan exists that investors can see.
We’ve already told you how lucrative it can be to open a gas station. And so, you should already know that there’s going to be a lot of competition to deal with. You’ll need to start researching a lot about your competitors to see where you can stand out as a differentiable fuel station business. If you’ve selected an area with higher EV options, then you also need to consider adding electric vehicle services.
To strengthen your business plan, you’ll also need to keep a close eye on product/service offerings. What are you going to be marketing in the stores? How many drivers can you accommodate? Answering questions like these is essential if you’re trying to meet a higher customer demand.
The biggest question that arises during a plan making process is: How much does a gas station cost? The answer here entirely matters considering your goals.
Opening up a station business can cost anywhere from $250000 to $1.1m! This includes all the one time expenses you’ll be looking to make such as construction, inventory etc. Your operational costs can also range from anywhere around $34000 to $110000 a month. These operational costs include:
This involves a lot of conversations with your attorneys to figure out what type of firm structure fits your aspirations the best.
If you’re looking to get up and running as soon as possible, this option fits you the best.
A sole proprietorship allows you and only you to leverage tax benefits and enjoy all profits. But that also means that you are the only person in charge.
Owning gas stations can be a little risky. You can be at risk of accidents or maybe even robberies. And if that were to ever happen, you’ll have to deal with the damages all on your own.
A popular option is going for an LLC. LLCs are popular amongst smaller firms that plan to open one new gas station.
Not only you’ll be paying less than you would as a corporation and get to leverage some tax benefits, but an LLC also protects you from any damages or legal issues that you may have to deal with.
However, choosing to be an LLC can also make it harder to get funding loans.
Corporations are more suited to owners looking to have multiple gas stations. If your plan is to go against huge gas station leaders, becoming a corp should be your go to. These often bring in owners that plan to boost their assets from new investors.
Running fuel stations come with a lot of risks. You’re choosing to handle fuel which is always linked to pollution. And considering our world’s shift towards more ecofriendly products, there’s significantly less tolerance towards mistakes in this business.
That’s why new business owners need to account for liability protection. This will help cover any cleanup fees and legal problems that you may have to face if something goes wrong. Paying for environmental damage is expensive, so you’ll need protection if that ever happens.
When you open gas stations, you’ll need to sign up with the IRS. And this is extremely important.
Upon registering, you’ll be given an EIN. This 9-digit ID will be necessary whenever you’re paying taxes to the IRS. Applying for an EIN can be done online. Some states also require a state tax ID.
Always remember to reach out to your tax lawyer to prevent any mishaps regarding your state’s tax laws.
The next step is to get some funding. Let’s see the ways to fund your new business
Going for traditional bank loans is pretty standard and there’s not much we have to tell you about. Getting traditional bank loans means dealing with interest rates and it is often just suited for those who have good credit scores. However, traditional bank loan have a lengthy process with a strict criteria. This can include things like:
SBA loans are loans offered to small-medium business and partially given out by the government. It is popular among new owners looking to buy a gas station.
Compared to traditional bank loans, these have smaller down payment criteria and longer repayment times which lowers the risk that lenders have to deal with. The criteria for getting SBA loans is:
If getting loans isn’t in your plan, you can always look towards investments. This means turning to angel investors or raising money through crowdfunding. However, when you choose to turn to investors, you’re signing off a part of your company to them. You can also look to add in your own personal savings into the business plan.
let’s see the cost breakdown to figure out how much you’ll need to raise in funds:
Opening up a gas station business plan in the middle of nowhere isn’t really going to be as lucrative as you want. That’s why you want to look places with a lot of traffic. Let’s see some things that’ll help you pick a location:
Selecting an area with a lot of traffic is going to give you the most out of your business. You’ll have a lot of people moving about which will also mean a lot people need gas.
However, you’re not the only one thinking this. And this isn’t an immediate opportunity. You’ll also need to look out for how close you are to your competitors. What may seem like a good area to open gas stations in, may just fall in the proximity of larger corporations.
You’ll also need to keep an eye out for the environment. If you’re building from scratch, it’s probably not a good idea to clear a part of the environment. Additionally, if you end up picking a state that suffers from a lot of natural disasters, you’ll spend a lot of time in maintenance.
The argument of whether you should be leasing or buying a gas station depends on your aspirations. If you don’t have a lot of funding available, going for the lease options is your best bet.
Before you go ahead and buy or lease your gas station, it’s also important to be critical in your checks. Some fuel stations can have faulty underground storage tanks which can be detrimental for your business if left unnoticed. Additionally, knowing your leaser is also very important. Sometimes fuel suppliers will be leasing out fuel stations and different suppliers have different requirements and conditions.
To open gas station, you’ll need to meet many legal requirements. This includes meeting regulatory criteria and getting permits/licenses to keep your business up and running.
As per some state environmental laws, owning a gas station also means that you may have to install unique tools to prevent any spills. Additionally, the state you pick may also have zoning laws. This could affect where you’ll open your fuel station. Many states do not allow stations near homes/schools.
You may also think: what certification do you need to work at a gas station? Here are the permits you’ll need to open your gas station:
Looking for Fueling Equipments with BEST PRICE?
Gas station equipment can be expensive. However, you do not need to have everything that another branded station has. So lets see some of the main equipment needed:
Fuel pumps are the very first piece of equipment that you’ll need to get. These allow consumers to pump gas into their vehicles.
Depending on the type of station you’re opening, you’ll find many types of fuel pumps. Many modern pumps have digital screens that work out how much a customer has to pay as they’re pumping gas. Other new pumps also have advanced features such as automatic mechanisms that’ll prevent any overflows. You’ll also be able to find pumps that come with their own payment options, offering customers a convenient service.
For your fuel pumps to work, you’ll need underground tanks to hold the large amounts of fuel. These tanks are made with multiple walls and detection alerts which signal if there’s a leak. This offers the best protection you can have against any harmful spills.
Besides, don’t forget to crosscheck your storage tanks’ dimensions with state regulations.
Your gas station is incomplete without a place for the customers to pay. A POS system is important in order to prevent any long queues and make sure that convenience is always offered to the customers. The POS system can also help you keep track of inventory and the amount of sales your station is making. Additionally, it can also keep track of payroll. All in all, a good POS system can help you make data driven choices.
Each gas station comes with a convenience store for customers to buy products from. This serves as a good way to make extra money and increase the flow of consumers. For the convenience store, you should look into shelving and display units which can help you maximize the space you have to include more products. Additionally, you should also look for screens to mark any promotions to catch the consumer’s eye.
Once you’ve gotten your fuel pumps and underground storage tanks, you’ll also need a way to keep refilling them. For this, you need to do your own research according to where you’ll be opening your gas station. A lot of fuel suppliers often look to earn off of your sales. That’s why you’ll need to do a lot of math to ensure you’re maximizing your profit.
These are the types of insurance coverage you should be looking for:
Gas stations are under a lot of risk and we’ve talked about some above. To prevent that, you’ll need to protect your new station. The insurance can cover any accidents or unwanted problems that you may have to deal with. In order to maximize the protection you get, it’s also important to look out for any potential risks. This involves preparing for problems like human errors or accidents. These problems can not only risk the safety of your business but also the people around your station.
Remember, your business assets are very important. So always look to have them protected through insurance.
People don’t often have a preferred gas station to go to. More often than not, they’re just trying to make it to the closest one possible. And when you consider that, investing in highway signs or large pole signs seems like a no brainer. After all, your goal is to capture a customer’s attention. And this is only done safely when they can see your signs as they travel around.
Yelp and Google My Business are the most common ways people look for the nearest fuel stations. And that’s why you need to build a good reputation for yourself on these apps. When people look for nearest gas stations, they’ll often pick the ones with the highest ratings. So you should look to improve your ratings through customer service and offerings. Additionally, replying to reviews left by consumers also shows that you care about their experiences.
Getting yourself new customers is way more expensive that attracting old consumers. That’s why a lot of brands, including gas stations, have loyalty programs. With impressive loyalty programs, you can build a customer base that will always want to come back for your services.
Now that we’ve talked all about what you’ll need to set up your new gas station, it’s time to see what your day to day operations will look like. The first step to doing that is deciding the hours of operation.
Most gas stations are open 24/7, and if you’re looking to maximize consumer traffic, you’ll have to do the same. And that also means having to get more employees to manage the shifts. For this, you’ll also need to come up with training programs as most employees may be students that are looking to earn through part time jobs.
Since you’re probably going to have a convenience store with your gas station, it’s crucial to keep track of all the items you’re selling. By following a plan that lets you manage your inventory on a day to day basis, you’ll always be able to restock before running out.
Dealing with robberies is by far the biggest problem gas stations have. Especially those that choose to keep open 24/7. If you’ve read through everything we’ve said, that means you’re already set to be insured for any losses you have. But you’ll also need to invest in cameras as well as shatter proof windows. Moreover, you’ll also need a security program so all your employees know what to do in case of an emergency situation.
The gas station market is one that’s going to go through a lot of changes in the upcoming years. And that’s not because you have less vehicle drivers. Instead, we’re seeing a lot of demand for new EVs which means that gas stations need to cater to these customers or they’ll lose the importance they hold. You can do this by getting EV charging stations installed while you’re setting up your new business.
In order to keep your business up and running for a long time, it’s also good to look for new ways to earn revenue. This can be done by adding more services like vehicle repairs or partnering with companies to sell more items in your gas station.
Step#1 – Research gas station brands to find a franchise that aligns with your budget and goals.
Step#2 – Review the franchise agreement to understand more about the fees involved. This will include initial franchise fee, royalty fees and marketing contributions.
Step#3 – Meet franchisor requirements. These differ depending on the franchisor you pick. It may include prior business experience requirements or a minimum amount of liquid assets criteria.
Step#4 – Leverage the franchisor’s training to maximize profit from operations. Your franchisor’s support will grant you operational guidance and access to proprietary systems.
Opening a gas station with no money is extremely difficult. But it’s not impossible. This can be done with the help of investors, loans or even crowdfunding efforts.
However, each method comes with its own difficulties. Partnering with investors means that you’ll be losing out on a part of your company. Similarly, going for loans means that you’ll be spending a lot of your first operational years repaying the loan.
If you’ve got this far, then you have the entire gas station plan ahead of you. By now, you’ve read about all there’s to know about opening up your own fuel station. From learning about how much to buy a gas station to creating your own from the ground up, all that’s left for you to do is start working on it! It’s no surprise that earning from gas stations can be a little difficult, but the profits can be maximized if planned carefully. So remember to keep a close eye on the gas station market as you think about making a name for yourself. After all, you don’t want to be left behind by the changing market trends
How to Open a Gas Station: A Step-by-Step Guide – NerdWallet
12 月 04,2024
