Petrol Station Business Ideas: How to Start Your Gas Station

Starting an independent petrol station requires two things getting a gas trade licenses and building the station. Getting the appropriate permits and licensing is the most difficult aspect of the enterprise.

New players in oil and gas need to hire an expert to facilitate the process of certification.  To secure a permit to operate a petrol station you need to apply to a designated regulatory authority.

You must fulfill different provisions before approval. The second method is acquiring a franchise from an established brand. And the final method is buying an already established station and inheriting the permits and certification.

How to Start your Petrol Station

There are two categories of petrol stations the independent marketers and franchise operators. You need serious money to establish a petrol station.

The funds are used to get franchise agreement, permits and construction your station. To start your station you need to decide between a franchise agreements or become independent.

Funding

You need lots of funding to start a petrol station. You can collaborate with a group of investors or seek bank loans. Offer equity in the startup or find a core investor.

Services

The filling station can operate up to five services for maximum gain. The core business is to sell premium motor spirit to vehicles.

You can also sell diesel products, lubricants and kerosene products. Other added services include automated car wash and a supermarket or restaurant.

The petrol station owner might decide to lease a shop on the premises. You need a minimum of 2 petrol dispenser, 1 diesel dispenser and 1 kerosene dispenser.

You can increase the number of petrol dispenser at your own discretion.

Starting a Franchise Operation

There are many major markets who offer franchise deals. Petrol companies such as Oando, Shell, Mobil, Total offer franchise arrangement.

It is much easier starting your petrol station through this method. They have a fixed amount a franchisee pays to get the gig.

Major benefits of running a petrol marketing franchise are experienced assistance during the setup process and mentor-ship. They provide assistant throughout the setup and operation of your enterprise.

Another major advantage is technical assistance during the constructing of the station and marketing. The brand name is already established and known to consumers.

You also get permits and licensing to operate the franchise through the marketer. They allow the use of their colors, logo and services.

They also provide intensive training for their franchisees. Study the rules and regulations in your franchise agreement to understand their requirements.

Look closely at the contractual agreement, royalty fees, clauses, and support program. Other things are penalties, training and supply agreement.

The franchise agreement provides provisions for use of brand name and product supply. Engage a lawyer to study the agreement, licenses and permits.

Independent Petrol Station

To start an independent petrol station is infinitely more difficult and tasking. You need to get appropriate permits and licensing to start your enterprise.

Some of the requirements are environmental authorization including site licensing. You also need a petrol retail license and land use rights for your petrol station.

You need to first secure a land use right and environmental authorization before applying for a retail license. The processes are long difficult and subject to onsite inspections and recommendations.

The size of the plot and location is very important before approval. The minimum landed plot allowed in some countries is two plots.

Separate Business Units

Filling stations have discovered other ways to make money apart from dispensing petrol. They include convenient stores, mini marts, car wash or service garage.

Some introduce boutiques and restaurants into their design. Independent marketers can introduce a separate business in the design. Determine the business unit that complements your filling station.

Buying an Existing Station

Another way to get into the petrol marketing business is buying an existing station. This is a short cut way to starting your enterprise but very expensive. You can buy a station from an independent marketer and establish your own brand.

Locating the Petrol Station

Patrol stations have strict land provisions they should follow. Approval is only given when they abide by them.

You are not permitted to open a station in a residential area and the distance between operators is factored. The type of storage tanks, dispensing machines and structures are regulated. Other consideration is the average size of the property.

Supply

Franchisee stations get their supplies directly from franchise owner. You only have to place an order with your major marketer to get supplies.

An independent marketer has to source their products from any source. They source products from importers, major marketers or buys from private deports.

Marketing

The independent marketer needs to do all the promotions themselves. They can advertise in national newspapers and auto magazines.

 An effective method to attract patronage is special promotions and discounts on lubricators. Franchise owners don’t have to do any marketing because the major marker covers this angle.

Step By Step Guide to Opening a Petrol Station

Here are a few steps you need to take before opening your petrol station.

Write a Business Plan

Get a professional to write a comprehensive business plan for your petrol station. Make it detailed and include type of services, number of dispensers and products.

You need detailed organizational and management structure including running costs. Focus on legal issues, finance, location and marketing strategy.

Create a feasible budget, study contractual agreements, franchise fees and startup costs.

Permits and Licenses

Find out the permits and licensing you need to operate a petrol station. You need insurance cover against liability. Make sure you engage the service of a lawyer to study legal contracts.

Decide on Company Structure

You need to decide on either becoming an independent marketer or apply for franchise agreement. The independent marketer secures the license, builds the station and markets the products.

A franchise agreement on the other hand uses the trademark, business model and products of the major marketer. The franchisee pays royalties to parent company including contractual agreements. Make sure your engage a lawyer to study the contract in detail.

Research

How do you choose a franchise owner among the many choices? You need to do some research by studying their contracts.

The contract should include supply, monthly royalty ratio you pay and profit margin per gallon. Select a company that offers the best royalty and brand name. Franchise owners are critical about location and will not allocate permits to stations that are in close proximity.

Locate your Business

You need effective market analysis when choosing a location. The station should be located where there is heavy vehicular and foot traffic.

You need easy entry and exit points and ample space. You need to consider the growth potential, customer base and demand.

Find key areas to locate your station such as major roads, and intersections. Find out civil construction project in the area to avoid major issues. Also make sure you are up to date on state and local government regulations.

Budget and Planning

Now you know the direction to take you need a workable budget. You also need lots of planning and implementation?

The budget should take into account financial considerations such as real estate cost, building cost, equipment and product purchase costs. Other estimates include insurance, legal, consultation and startup funding.

You will expend lots of money on product supply and transportation. Others are stocking the convenient store and general inventory. Other costs are staff wages, and utility bills.

How to Secure Funds

To secure loans from banks you need lots of documentation. Some documents you present are tax returns, comprehensive business plan and franchise agreements.

Others are budget, startup costs, supplier agreements, inventory schedules and interim financial statement. Securing a bank loan to finance you project is difficult but not impossible.

You will also need collateral to cover the loan. Once you secure a loan study the interest rate before signing the agreement.

Organize the Daily Operations

Congratulations you have secured a permit, built you station and fully stocked what next. You need to plan on how to run the station.

Your petrol station can run 24hrs or 10 hrs a day. Operate efficiently, good quality and prompt service.

Hire dependable and trust worthy staff and implement a strict monitoring system. Many stations operate the shift structure because of the tasking job of attendants.

Hire an accountant and clerk to oversee your inventory. Cash handling involves cash drops at bank midday and end of every business day. You need to provide serious security to protect your investment.

Safety Protocols

Since you are dealing with highly inflammable material you need to put in place serious safety arrangement. Visit your local fire station, safety and hazard experts for proper safety equipment and protocols. 
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