Automobiles are very important not only for personal purposes but also for commercial entities. Whether they are trucks, cars or other vehicle types, these machines depend on fuel in the form of gas to operate. Third party businesses persons must provide this gas and it is a lucrative type of business.
Currently, the world is trying to reduce global warming by adopting green energy and therefore the most profitable gas station business is that which deals in greener fuels such as biodiesel, hydrogen fuel, ethanol and hybrid fuel. If you are inclined toward gas supply business, then you need to know how to start a gas station business. You have to understand that this endeavor can be capital intensive and needs you to be very smart. Here are the steps.
- Step 1: Carry out extensive research
- Step 2: Make a business plan
- Step 3: Find partners in investment
- Step 4: Review the legal requirements
- Step 5: Pick a suitable location for your gas station
- Step 6: Find a supplier and sign a contract with it
- Step 7: Consider other business opportunities
- Step 8: Hire employees and advertise your gas station
Step 1: Carry out extensive research
Due to the intricacies of a gas station business, you cannot just wake up one morning and decide to build a gas station. Carryout some research in terms of the viability of the business, its sustainability and finally profitability. Do market study and talk to relevant people about what it takes to start such a business.
Step 2: Make a business plan
Once you are convinced that a gas station is the right business for you, it is time to settle down a draw a business plan. No business can succeed without the right plan. You many need to seek the services of a business-planner and an accountant for realistic professional opinion. This will help you project or know about your estimated expenses vis-à-vis income.
Among the things you need to consider is the estimated cost of the real estate for the filling station, the cost of fuel supply, the number of employees you need and how much you will pay out annually in terms of salaries and wages. You also need to know about taxes, insurance and other costs you may incur for the business to run smoothly and optimally. Do not forget to include the cost of advertising.
Step 3: Find partners in investment
As mentioned earlier, starting a gas station business can be capital intensive. You may not manage to raise all the capital you need single-handedly. You can approach banks, other financial institutions as well as individual investors and see if they can agree with your business plan.
Make sure that you are secure in the partnership by making everything official. The only way to do this is to find a good lawyer who is independent to review the investment contract between you and your funders. Ensure you understand each detail of the contract before signing it for your own security.
Step 4: Review the legal requirements
Each state or country has its own set rules that govern different business types. Gas station business deals in highly inflammable and thus dangerous fuels. This makes the legal requirements to run them a little bit more stringent compared to other business entities.
You will need to meet all the state and federal requirements for a gas station and obtain a license or permit to run such a business. You will also need to provide proof that you met all the requirements from a local fire department closest to you. Failure to do this could land you into problems, some criminal in nature.
Step 5: Pick a suitable location for your gas station
Ideally, you need to keep this in mind from the moment you first conceive the gas station businesses idea. A gas station cannot just be located anywhere; you need to have a catchment area with enough automobiles and little competition. You can either build a new gas station or buy one placed on sale. In the latter case, you need to find out the reason for sale and make sure it is primly located.
Step 6: Find a supplier and sign a contract with it
Different suppliers have different prices and customer care services. You need to get one, which offers the gas types you wish to sell and at best prices. It is also important to find one that offers after sale services. Take your time and research on the best companies by visiting trade shows or searching online. Once you settle on one, you can get a lawyer and sign a contract with it.
Step 7: Consider other business opportunities
Gas stations serve not only as filling stations; they are also rest stations for many travelers. Here, they can grab some snacks, drinks and even sleep while they are on a long journey. You can consider opening, in addition, a coffee, snack shop, a restaurant or even a motel. Another thing you must include is a car wash and a vehicle service bay.
Step 8: Hire employees and advertise your gas station
After the gas station is completed, you need to find the right employees to work. Call for an interview and ensure you shortlist only those candidates that are merited to work in such a setting. You can then find the best advertisement media to popularize your gas station.