Do you want to start a gas station business? If so, find here a detailed stepwise guide on starting a gas station covering aspects like costs, licenses, market opportunity, etc.
A gas station is a retail business engaged in selling fuel for personal or commercial vehicles. Right at the outset, it must be mentioned, starting a gas station requires a huge amount of investment. If you have the ability to invest or have a financial investor backup, and highly passionate in the automobile industry only then consider starting a gas station business.
Here are the Steps to Follow to Start a Gas Station Business
1. Understand the Market
As with any other business, it is extremely important to understand the local market. The target audience can be broadly categorized into three sectors. First is the local residents, second families on a traveling trip, and the third is the trucks running for distribution materials. It is advised to go for market research and collect information regarding local demand, competitors if any, products and services offered by them and much more. It will help you in finding the gaps and accordingly plan your gas station business.
2. Decide on the products/ Services
Talk to existing gas station owners and learn the day to day operations of running it. The primary job is to fuelling vehicles and restocking fuels and gasoline. However, most gas station owners add a convenience store and sell items like food, and items required while traveling. You can also run services like car wash at your gas station.
3. Select a Location
Selecting the right location is extremely critical for a successful gas station business. Most gas station owners suggest choosing a location near highways. You must ensure the selected location is visible to people from a long distance.
4. Choose the Type of Gas Station
There are three ways of starting a gas station business. Firstly, you can build your own gas station from scratch. Secondly, you can buy an existing gas station store. Thirdly, you can buy a franchise of an existing reputed gas station company. Companies like Shell, Lukoil provide franchise opportunities to deserving candidates in the United States.
5. Learn the Startup Costs
If you are planning to have your own gas station build from scratch in the United States, prepare for an investment of at least $300000. The investment will vary as per the scale of your proposed gas station. The bigger the station, the more will be the cost. The investment mainly will comprise of purchasing the building, setting up of the gas station, and additional cost if you want to add for car wash service workshop, convenience store, etc.
6. Name Your Gas Station
It is very important to choose the right name for your gas station business. You can check this guide to know more about naming a business.
7. Create a Business Plan
Based on the information collected, starting writing a business plan for your proposed gas station. Include chapters like objectives of the company, operating plan, financial plan with costs, break-even analysis, payback period, and a marketing plan. You can take help from business plan generators if the need arises.
8. Licenses and Permits
Owners of the gas station must hold a business license and federal and state tax identification numbers. Every country and states have different sets of rules and regulations for the gas station business. If you are from the United States, go to the official site and learn more about the licenses and permits required to run a gas station. It is advised to talk to local attorneys, and procure the licenses.
9. Arrange Finance
Gas station business is a cash-intensive business. I f you are looking for funds, it is wise to create a professional business plan. This plan will be extremely critical while pitching for finance with investors or financial institutions.
10. Hire Manpower
You first need to create an organizational flowchart before starting to hire manpower. Decide on the number of staffs required to operate the gas station along with job descriptions of the vacancies. Post advertisements with local newspapers or contact a recruitment agency and fix appointments for selected candidates.
11. Set Up Proper Business Accounting
Setting up a proper business bookkeeping process is extremely critical as it is a retail-based operation and lot many financial transactions are expected. Choose proper accounting software for daily accounting needs.
12. Promote Your Gas Station
The most popular way of attracting customers for gas station business is to put catchy signage which is clearly visible to people crossing the station. In addition, distribute brochures and pamphlets in the launching phase. Create a website, and social media pages and keep posting the activities of your business.
In conclusion, though most gas station earns its primary income from fueling vehicles, the secondary income through selling food items and facility service like the car wash is the cake in the pudding. Hence, anyone planning to start a gas station must include a convenience store for more profitability.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.