18 Steps How To Open A Gas Station

(doylc.com) How to Open a Gas Station - People all over the world need fuel for their cars, trucks and other vehicles. Gas stations can be good investments, and profit margins have increased in recent years. However, successfully opening and operating a gas station requires intelligent planning and significant investment. You need to create a business plan, choose a location, get funding, and run your business effectively.

• How to creation of a business plan

1. Create a business plan for your gas station. Discuss this with an accountant to get a realistic professional opinion on your estimated expenses and income.

A business plan contains several important pieces of information and is more than just a simple sketch. You must provide as much detail as possible.

A fully prepared business plan becomes more attractive to lenders and investors.

You must provide a description of the services, products, and amenities (air stations, car washes, vacuum stations, etc.)

For example, you want to specify exactly how many gas pumps you will have, whether you will have a car wash, air pump or vacuum station, how many toilets, what type of snacks/groceries your supermarket will stock.

An analysis of the local market and competition must be included.

You need to explain where other similar companies stand and why your company will do well in the competition.

Present a detailed plan of the organization and management of the company.

In this section, you must indicate who manages the company's finances, who manages the store and inventory, and who handles legal matters.

Add an advertising and marketing strategy.

Suggest ways you can advertise in local newspapers and get the business off the ground.

Prepare a detailed budget and start-up cost estimate.

This section requires you to fill in the cost of the property, the cost of daily operations, the cost of gas contracts and franchise fees, etc.

Write a mission statement and goals for your gas station business.

2. Find out what insurance and permits you need to operate a gas station. This may vary by country, state and county.

You may need a permit if you want to sell tobacco and alcohol.

Most gas station owners are liable for any gas and spills from underground storage tanks under the EPA or other equivalent regulations. Most gas station owners have insurance for these purposes.

You may have to be held liable for customer damages. Many insurance policies are available to companies to cover these cases.

You must ensure that you are not personally liable for any damages. You may need to consult an attorney to create legal contracts.

3. Consider whether or not you will be part of a franchise agreement. For example, if you wanted to open a Sunoco or BP gas station, you would be part of a franchise.

A franchise agreement allows a franchisee (you, the business owner) to leverage a larger company's brand, products, and business model.

For example, if you operate Sunoco as a franchisee, you would essentially own a Sunoco station.

Franchisees must pay royalties to the parent company. This is usually a percentage of sales or a monthly fee.

Most petrol stations are part of a franchise agreement.

Before you decide to franchise or enter into any particular franchise agreement, you need to do thorough research.

Talk to other business owners who have franchises with the chain you're considering opening.

Know what you're getting yourself into. Look at a franchise agreement to learn what your rights and obligations are.

Pay attention to special features in your contract. Most franchises benefit the business more than the business owner.

Speak to an attorney or other appropriate legal professional to ensure the legality of a franchise agreement.

4. Create a budget for your new business. You must budget for both start-up and operating funds.

Real estate costs should definitely be included in your budget planning: land purchase and construction costs or the costs of buying an existing gas station.

An estimate of legal fees such as legal fees for drafting business contracts and consultations must be included in your budget.

Insurance and permits are expensive and you should factor this into your budget estimate.

You need money to set up your gas station.

Include an estimate of the cost of promotions, advertising and signage.

Make sure you have an estimate of the cost of starting inventory and the cash you need to have on hand.

Build the cost of gas supply and convenience store inventory into your budget. You need to research gas suppliers and warehouses to see where you can get a cheap contract.

Finally, add an estimate of salaries and staff costs, as well as daily expenses like gas and utilities. You need to research the industry for standard employee salaries as well as gas costs.

5. Find out about different companies and sign a contract with a gas supplier. You need someone to deliver the gas for your gas station.

Different providers can offer you different contracts. Basically, a supplier contract provides that the supplier shares in your gas sales.

The typical profit from gas sales for many gas station owners is 8-13 cents per gallon. This varies around the world.

Unless your franchise agreement requires you to contract with a specific company, do not immediately contract with a local supplier for fuel.

It's best to look for companies that offer you the greatest return on your gas.

You should have your contract with your fuel supplier checked by a lawyer to ensure that all agreements are mutually beneficial and that you are not caught in a legal loophole.

• How to choose a location for your gas station

6. Think of open country near you. Can you think of an area where a gas station is needed?

Market analysis has shown that location is one of the most important things consumers think about when choosing a gas station.

Customers want a location that is on a major route to work and convenient in terms of traffic patterns.

Also think about the setup of your station. Customers want to go to a station that can be easily entered and exited from nearby streets.

7. Consider the local competition. You should avoid an area already dotted with gas stations.

Look at areas where there is a lot of growth, e.g. B. near major cities. As new neighborhoods and business districts emerge, there will be a demand for new gas stations.

Find out the locations of major retailers like Sam's Club that offer big gas discounts.

You should place your gas station at some distance from these locations to avoid the competition.

Consider hiring a modeler to work with you. There are many site modeling companies out there. These professionals will help you create a digital mockup of your gas station in the location you want to use.

This can help you decide if your design is viable on site or not and if there is too much competition nearby.

8. Consider a potential gas station's accessibility to local roads and highways. Your presence along a major highway or road will attract customers.

If your location is near a freeway exit or exit, consider investing in billboards along that route to increase your business.

Consider traffic flow at different times of the day.

You want your gas station to be on the same side of the road as heavy traffic during rush hours.

9. Find out about current and future construction projects in the area. You should avoid opening a new business along a route affected by long-term construction.

Customers will try to avoid highways and roads with heavy construction.

If there is long-term development planned on or near your location, you should consider purchasing another plot of land.

Even short-term construction projects can affect your business. Remember, your goal is to get a lot of customer traffic near your gas station.

10. Consider local and state regulations regarding gas station construction and location. There may be local restrictions or fees associated with opening this type of business.

Check the history of the site you are considering.

If you're buying an existing gas station, be aware of any spills or leaks that have occurred in the past. You could be held liable under local or state law for future complications.

If you are buying an existing gas station, check whether you are bound by the gas supply contract for that location. Some places have laws that bind you to an existing agreement.

• How to finance gas station

11. Gather documentation to obtain a gas station loan or other eligible loan available where you live. Some countries require you to collect the following types of documents:

- A copy of your detailed business plan.

- Three years of tax returns (both private and business)

- Supplier agreements (for gas and convenience store items)

- Interim financial statements

- As-built plan

- AR/AP schedules

- Franchise agreements

- Budget for operating and start-up costs

12. Understand that getting a business loan for a gas station is very difficult. The market is becoming very competitive and costs are increasing.

For this reason, a fully researched business plan is essential.

Your location must be ideal to be a successful gas station.

Your budget must include a realistic and detailed explanation of the funds required.

You may need to visit several banks and financial firms before your plan is accepted.

Understand that you may need to change your business plan according to investors' suggestions.

13. Consider a small business loan approved by the Small Business Administration. These are often the easiest to get.

Gas stations come with many environmental and other property valuation concerns.

Often, SBA loans can cover costs related to environmental issues or reassessments.

Other banks can provide similar loans, but lenders suggest it's often easier to get financing to buy an existing gas station than to build a new one.

14. Shop at banks to get a good interest rate on a fuel loan. If you can't get enough seed capital with a better office loan, you can try getting a more traditional business loan.

Make an appointment with a loan officer at the bank.

Show him your gas station business plan.

Complete all forms and bring all documentation such as tax returns, ID cards, legal contracts, etc.

Apply to multiple banks. Your creditworthiness, tax information, and the viability of your business plan are all factors in obtaining your loan.

Different banks may offer you different interest rates on your loan with more or less flexibility in repayment.

Carefully weigh the pros and cons of each offer you receive and decide accordingly.

• How to operation of gas station

15. Set fixed opening hours. Decide on these before you officially open.

You may need to research when are the busiest times.

If none of the other gas stations nearby are open late, consider going late. Consider becoming a 24 hour gas station if there is a market for shops after midnight.

Always open punctually at the set time. Customers will not want to wait for the opening.

16. Conduct job interviews and hire reliable employees. Make sure they understand all aspects of their job.

They want employees who show up for their shifts on time.

Plan your employee shifts so that they are adequately covered throughout the workday.

Have a store manager on duty for all shifts.

17. Carry out an inventory regularly. You should inventory all cigarettes, lottery tickets, and money orders at the end of each business day.

Place stock orders in time. If you're constantly running out of stock at your convenience store, customers will complain or be less likely to shop at your store.

Consider how long it takes for your suppliers to make deliveries. Plan ahead and pre-order popular items.

Generate inventory and treasury reports at the end of each business day. Keep a book of this information so you can track losses.

Deposit cash into the bank every day.

18. Think about the safety of your employees. While most gas stations operate without many incidents, accidents and robberies do occur from time to time.

Only keep small amounts of cash in your tills.

Install a safe so employees can deposit cash from their tills.

Empty your custodian safes at the end of each business day and deposit cash in the bank.

All employees should be trained in firefighting as a fire can start at the fuel pumps.

Install shatterproof glass windows.

Consider a 24-hour security system with cameras.