Interested in small gas station business ideas? If YES, here is how to start a gas station with no money and no experience. How much does it cost to start up?
How to Start a Gas Station Business
Are you interested in starting a gas station business? Are you interested in doing business in the oil and gas sector? How much does it cost to open a gas station? How much money do you make owning a gas station? Is it profitable to buy a gas station?
This is a post that will be giving information and help on how one can start a gas station business. Therefore, I will be talking about the steps that you need to take towards achieving and starting your gas station successfully.
The oil and gas sector is a very big and lucrative industry in the economic sector of a nation. The industry is very important even to the extent that other industries depend on its output I.e. petroleum products.
The industry is quite risky, capital-intensive and filled with bureaucratic processes hence, the need for you to prepare yourself well before going into the business. You will have to prepare yourself and be strong mentally, physically, and even financially to succeed in this type of business.
A gas station business basically has to do with retailing and selling products such as Dual Purpose Kerosene, Premium Motor Spirit or Petrol, Automated Gasoline Oil or Diesel, Lubricants and so on to end users.
This is a very good business that you can decide to go into because it is a tangible investment and profitable business that doesn’t even need marketing because petroleum products sell themselves. Even the world at large is dependent on the oil sector. As the level of acquiring automobiles increases so also the level of demand for gasoline increases.
Like other industries, this industry has also had its ups and downs. The major breakthrough came for the gas industry when there was an increase in automobile ownership because Henry Ford starting making automobiles that the middle class can afford. Even though the oil and gas industry is highly competitive, it doesn’t stop creative and financially capable entrepreneurs from becoming successful in the industry.
There are so many decisions to be taken and things to be done when starting a gas station business and some of those things are:
STEP 1: FEASIBILITY STUDY
A feasibility study is a kind of research that helps you understand the market and industry your business is going into. This goes a long way in helping the business owner knows if he or she will still be going into the business or not, it all depends on the outcome of the study.
This study is always carried out before spending a dime in starting the business, the study helps in avoiding certain mistakes, risks, and bottlenecks and at the same time, increase your chance of being successful.
STEP 2: BUSINESS PLAN
Once you have a knowledge of the industry you are going into and also have conducted a feasibility study, you can then prepare your business plan. In preparing, you have to be very careful of what is being written there, this is because the business plan is the only document that can prove to bankers and investors that you have done your work well.
The business plan for your gas station should be about everything that relates to your business which includes an executive summary, financial cost, sales and marketing strategy, business structure, mission and vision statement, possible problems to be encountered and how to solve them, and so on.
You can work with a business consultant that deals with the oil and gas sector in writing your business plan and also in conducting a feasibility study.
Securing a good location is very important in starting a gas station business. Location is very vital to a gas station so much that if a gas station is in the right location then it will definitely be successful, you won’t even have to spend money on advertisements.
Some good locations that you can look into are industrial areas, commercial areas, along with major highways, areas with high level of vehicular traffic, residential areas and so on.
STEP 4: STARTUP FUND
You will also need to raise the capital needed to start your business. You might decide to finance the project yourself, raise money from private investors or get a loan from banks. The capital you need all depends on the type of gas station you want to build; you can either start small and continue building the business gradually or start big at once.
You just have to know that starting big will require more fund and you should be ready to provide the money.
STEP 5: LICENSE AND PERMITS
Obtaining the necessary licenses and permits for your business is also important. In doing this, there will be regulatory bodies for you to deal with and you might also have to join several associations and unions that have to do with the business you are about to start.
For you to be able to get your license of operation, you will be needing a certificate of incorporation and tax clearance which can be obtained with the help of a lawyer or attorney. The oil and gas sector is highly regulated so getting your licenses might not come easily but with perseverance, you will emerge successfully.
STEP 6: BUILD THE STATION
Building the gas station and buying necessary equipment requires a huge amount of money. In building the station, you will have to put the location, size of the station, and a number of fuel pumps into consideration.
These factors also determine the extent to which you will be spending money and some of the things you will be spending money on are:
- Land for the gas station
- Construction of the gas station
- Installing underground tanks
- Buying equipment such as fuel pumps
- Insurance fee
- Buying fuel supplies
Therefore, all the points listed above are very important in starting your gas station business. Doing all those things diligently will definitely yield a good result.