Gas Station Business Plan



Gas Station Business Plan

Across the world we all need gas stations as the car is still the fundamental means of travelling. Cars are still mostly powered by gas(petrol) or diesel fuel. Most filling stations are built in a similar manner, with most of the fueling installation underground, pump machines on the forecourt and a point of service inside a building. Single or multiple fuel tanks are usually deployed underground. Local regulations and environmental concerns may require a different method, with some stations storing their fuel in container tanks, entrenched surface tanks or unprotected fuel tanks deployed on the surface.

Over the globe gas stations are known by different names:

  • filling station
  • fueling station
  • garage
  • gasbar
  • gas station (U.S.)
  • petrol bunk (India)
  • petrol pump
  • petrol garage
  • petrol kiosk (Singapore)
  • petrol station (United Kingdom)
  • service station

The number of vehicles on the road continues to rise, however fuel sales have not risen in comparison. Engine efficiency is improving, requiring less fuel.

Many gas station operators now depend on non-fuel sales, with a significant proportion of their profits coming from convenience retailing. Independents are increasingly branding their forecourt shops by linking with convenience retailers in order to compete with the large petrol retailers. Many major retailers are also upgrading and expanding their sites to include dry-cleaning, Internet cafes, etc.

The fierce competition in the industry has led to a fall in the number of petrol stations. In the past this has been due to a fall in the number of independent sites. The repeated fuel crisis of the current decade has also resulted in the closure of many sites.

The petrol industry as a whole is in some flux, with several of the larger companies merging or considering mergers, and this has left their agents and franchisees in a state of some insecurity.



There are several ways to enter the petrol retailing industry. Sites can be independently owned and have a supply agreement with a petrol company, or they can be owned by the company, who employ an on-site manager. Many people enter the market with an operator agreement, whereby the fuel belongs to the oil company and the operator gets a share of profits and is responsible for the shop. Commission agents run their business from the shop, and get a commission from the petrol company for selling fuel. Similar arrangements, whether as franchisees, operators or agents, are available from most of the major companies. There has been coverage in the trade press of retailers' unhappiness with some of the larger companies' franchise/agency practices, so thorough investigation should be made before making any commitment. Operators should also be aware that very high wet stock losses can occur, e.g. through vapour loss and shrinkage, which can further damage profit margins.

Gas stations have changed considerably over the years - nowadays a gas station can offer so much more than gas. An excellent way of making more money is by having a food counter as well such as a deli. If you offer commuters gas, produce, and a deli then a commuter could stop for gas and pick up a sandwich. On the way home from work, the same commuter could stop again to pick up something for dinner.

In addition to fuel, your gas station can include a self-service car wash and air pump / pressure gauge, motoring accessories, hot and cold snacks, convenience food, cigarettes, newspapers, etc, can be offered inside the shop. The range of goods offered can include such things as toiletries, plants / flowers and even garden furniture. Your gas station can also include car servicing and a car sales room at a later date.

The potential customer base is widening. Motorists will stop to fill up with fuel or use the car wash. Customers for fuel may wish to establish a monthly or weekly account, and while this will require careful book keeping and administration, it will establish customer loyalty. It may be possible to obtain business from companies operating a fleet of cars.

Both motorists and passengers may use the convenience store for impulse or emergency buys, whether stopping for fuel or not. Nearby residents may also use the store for 'top up' or impulse shopping, especially outside normal shop hours. A range of carefully selected goods will encourage this trade.

If possible you should offer 24 hour petrol by having pay at the pump capabilities. You can also have vending machines if people want a quick snack as well.

Gas station franchises represent a very lucrative business opportunity for anyone desirous of their own gas station operation. The gas industry is one that is very tumultuous right now. With prices for gasoline as high as ever before, people need to go to quality gas stations to get their money's worth. If you operate a clean gas station, with a friendly and helpful staff, people will choose to patron your station. That is why the gas stations with different prices still get the traffic they desire. It is the auxiliary conveniences and purchases that draw people to use your gas station.



Gas Station Franchises can be a pleasure to operate. A large portion of your business is located outside, and many people enjoy being able to go outside frequently. There are many aspects that come together to make a successful gas station. If you are considering opening your own gas station, you need to have knowledge about the gas station business.

Having employment history related to gas stations, and gas station management, will help with your overall operation. If you lack the experience, or even if you are experienced, consider the benefits to opening a gas station franchise instead of your own operation. There are numerous benefits to opening a franchised unit instead of a brand new gas station.

When you invest in a gas station franchise, you instantly gain the stature and reputation of the company. Additionally, your franchise board will guide and advise you on all of the processes involved in the operation of a successful gas station. With a good location and a dedicated staff, gas station franchises are destined for success.

Your objectives should be to make your gas station the preferred gas station for the local community and commuter traffic by providing customer service that is second to none.

Your mission of your gas station is to offer commuters competitive gas prices and great food. Your company will make a healthy profit and provide a rewarding work environment for your employees.

Your keys to success are:

  • Provide good quality products at competitive prices.
  • Excellent customer service that will promote customer loyalty.
  • To convince local residents that your gas station is their gas station.
  • To provide a broad supply of motoring accessories, hot and cold snacks, convenience food, cigarettes and newspapers in the shop.


What should be included in the Gas Station Business Plan?

Every Gas Station and situation will be different, but the headings below are useful 'stepping stones' to include in any Gas Station Business Plan and will ensure you address the most important issues that an investor or a funding body may have.

Include a table of contents listing the main sections and page numbers in the Gas Station Business Plan. If it is difficult to find key information among a mass of text that has no logical index the person assessing the Gas Station Business Plan will be frustrated, and so less likely to consider the Gas Station Business Plan positively.

There should be a brief executive summary of the rest of your Gas Station Business Plan and should be no more than two pages long. It is the first thing that an investor will read and so it must be well written, should excite the reader and ideally should stand out from the many other Gas Station Business Plans an investor or lender will receive.

There are four key ingredients that investors will be looking for in your executive summary:

  • What it is that makes your business idea, product, service or approach to your market unique or original, and gives you an edge over similar businesses and products?
  • What experience you and your team have in your target market, or in this line of business, that will make a funder confident that you are capable of making it succeed.
  • How you have demonstrated, or at least illustrated, that your Gas Station is going to stack up financially, and will be viable and profitable.
  • How and when the funder will get their money back, or your plans to ensure that the investor will achieve an exit with an attractive return when you eventually sell the Gas Station or buy back their shares.

You should also include in the executive summary:

  • Details of the business name, its owners and address.
  • Details of the products and services you are going to sell.
  • A summary of your target market and competition.
  • The amount of finance needed, for what purpose and over what term.
  • The amount of money you and your business partners are investing.

Writing A Gas Station Business Plan

Writing A Gas Station Business Plan

Writing A Gas Station Business Plan

Competition is a way of life. We compete for jobs, promotions, scholarships to institutes of higher learning, in sports-and in almost every aspect of your lives. Nations compete for the consumer in the global marketplace as do individual Gas Station owners. Advances in technology can send the profit margins of a successful business into a tailspin causing them to plummet overnight or within a few hours. When considering these and other factors, we can conclude that business is a highly competitive, volatile arena. Because of this volatility and competitiveness, it is important to know your competitors.

Questions like these can help you:

  • Who are your five nearest direct competitors?
  • Who are your indirect competitors?
  • How are their businesses: steady? increasing? decreasing?
  • What have you learned from their operations? from their advertising?
  • What are their strengths and weaknesses?
  • How does their product or service differ from yours?

Start a file on each of your competitors. Keep manila envelopes of their advertising and promotional materials and their pricing strategy techniques. Review these files periodically, determining when and how often they advertise, sponsor promotions and offer sales. Study the copy used in the advertising and promotional materials, and their sales strategy. For example, is their copy short? descriptive? catchy? or how much do they reduce prices for sales? Using this technique can help you to understand your competitors better and how they operate their businesses.

Place in the Market

Distribution Channels

  • number of retailers ... each type by region;
  • number of wholesalers ... each type by region;
  • per cent of retailers ... each type, handling brand by region;
  • aggressiveness of retailers, co-operation by region, store type and city size;
  • indications of shift in relative importance of channels.

Promotion

Personal Selling

  • recruiting and selection ... methods, qualifications, standards;
  • training ... methods, skill development, motivation;
  • supervision ... performance reviews, development;
  • compensation ... commission, bonus, benefit plans.

Advertising

  • effectiveness ... comparison of spaces purchased, timing, appeals and themes, black and white vs. colour;
  • cost effectiveness ... various media, style, background, placement;
  • product effectiveness ... feature products, merchandising.

Sales Promotion

  • co-operative advertising;
  • deals, premiums, coupons, discounts, bonus gifts.

Publicity

  • announcements, press releases, mentions.

Price

  • from factory ... volume capacity vs. demand;
  • to wholesalers ... by type, size and region;
  • to retailers ... by type, size and region;
  • discounts ... functional, volume, cash, other;
  • allowance and deals;
  • service charges;
  • price stability ... commodity influences such as energy, labour, weather, technology.

Strategy

  • selection of a target market;
  • development of a marketing mix.

Gas Station Business Plan

Gas Station Business Plan

Gas Station Business Plan

A cash flow forecast that is badly drawn up is clearly of little use. It serves merely as a snare and a delusion.

Unfortunately, the project figures in your forecast will depend on the reliability of your crystal ball in foretelling your sales figures. You may improve the accuracy of those figures by conscientious market research or by getting advance orders (or at least firm promises), but you will still be peering into an uncertain future.

However, if the sales figures appear reasonable and conservative, and if the cash flow forecast has been well and logically drawn up, the bank will be able to take a view as to whether it can lend the money (and get it back again without having to sell up your house and furniture - a step even the toughest bank manager is loath to take).

To persuade the bank or building society to lend you the money you need is, of course, the primary purpose of a cash flow forecast. It has, however, some other very important uses.

Actually producing a well-thought-out forecast fulfils the same function as writing a well-prepared Gas Station Business Plan. It will sharpen up your ideas. It will make you aware of the effect on your bank balance of the decisions you take in your planning, such as the amounts to be spent on advertising, your terms of sale (very important for cash flow), whether or not to buy your own transport and so on. Giving thought to your cash flow is a very worthwhile exercise. Try drawing up several forecasts, each based on rather different assumptions of sales and expenditure. The few hours you spend could prove the most profitable of your life!

Even the smallest Gas Station is more likely to do well if its owner keeps a close eye on its financial progress, comparing what is hoped and planned for with what is actually happening. In business jargon this is called ‘budgetary control’. In your cash flow forecast you will have an invaluable little tool when you come to set up your own small-scale budgetary control. So don’t tear it up once the bank has seen it. Use it. Most of the banks appreciate the value of their cash flow sheets as budgetary control documents, and provide adjoining columns for ‘forecast’ and ‘actual’. If, every month and immediately after the month-end, you fill in all the figures in the‘actual’ column, you will get a quick indication of anything that is going wrong, together with strong hints about where to target any remedial action.

Great Gas Stations just don't happen.

They are planned that way.


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