Difference between revisions of "Open a Gas Station"
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| − | {{fa}}People all over the world need fuel for their cars, trucks, and other vehicles. Gas stations can be good investments and profit margins have been growing in recent years. <ref>http://www.forbes.com/sites/sageworks/2014/01/21/profit-margins-at-gasoline-stations-have-increased/</ref> However, successfully opening and running a filling station requires smart planning and a significant investment. You will need to make a business plan, choose a location, obtain financing, and run your store effectively. | + | {{fa}}People all over the world need fuel for their cars, trucks, and other vehicles. Gas stations can be good investments and profit margins have been growing in recent years. <ref name="rf1">http://www.forbes.com/sites/sageworks/2014/01/21/profit-margins-at-gasoline-stations-have-increased/</ref> However, successfully opening and running a filling station requires smart planning and a significant investment. You will need to make a business plan, choose a location, obtain financing, and run your store effectively. |
[[Category:Automotive and Transportation Businesses]] | [[Category:Automotive and Transportation Businesses]] | ||
== Steps == | == Steps == | ||
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#*For this section you will need to include costs on how much the property will cost, how much you will need to run the day to day operations, costs of gas contracts and franchise fees etc. | #*For this section you will need to include costs on how much the property will cost, how much you will need to run the day to day operations, costs of gas contracts and franchise fees etc. | ||
#*Write a mission statement and goals for your gas station business. | #*Write a mission statement and goals for your gas station business. | ||
| − | #Research what types of insurance and permits you will need to operate a gas station. This can vary by country, state and county. <ref>http://thompsonhall.com/starting-your-own-gas-station-minnesota-business-attorney/</ref> | + | #Research what types of insurance and permits you will need to operate a gas station. This can vary by country, state and county. <ref name="rf2">http://thompsonhall.com/starting-your-own-gas-station-minnesota-business-attorney/</ref> |
#*You may need a permit if you wish to sell alcohol and cigarettes. | #*You may need a permit if you wish to sell alcohol and cigarettes. | ||
#*Most gas station owners are liable for any gas and spills from underground storage tanks under EPA or other equivalent regulations. Most gas station owners have insurance for these purposes. | #*Most gas station owners are liable for any gas and spills from underground storage tanks under EPA or other equivalent regulations. Most gas station owners have insurance for these purposes. | ||
#*You may be required to have liability for customer injury. Many insurance policies are available to business to cover these instances. | #*You may be required to have liability for customer injury. Many insurance policies are available to business to cover these instances. | ||
#*You will need to make sure you are not personally financially liable for damages. You may need to consult an attorney to draw up legal contracts. | #*You will need to make sure you are not personally financially liable for damages. You may need to consult an attorney to draw up legal contracts. | ||
| − | #Think about whether or not you will be part of a franchise agreement. If you want to open up a Sunoco or BP station, for example, you would be part of a franchise. <ref>https://www.sba.gov/content/franchise-businesses</ref> | + | #Think about whether or not you will be part of a franchise agreement. If you want to open up a Sunoco or BP station, for example, you would be part of a franchise. <ref name="rf3">https://www.sba.gov/content/franchise-businesses</ref> |
#*A franchise agreement allows a franchisee (you as a business owner) to use the trademark, products, and business models of a larger company. | #*A franchise agreement allows a franchisee (you as a business owner) to use the trademark, products, and business models of a larger company. | ||
#*For example, if you entered into a franchise agreement with Sunoco, you would essentially own a Sunoco station. | #*For example, if you entered into a franchise agreement with Sunoco, you would essentially own a Sunoco station. | ||
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#*Watch out for specifics in your contract. Most franchise agreements benefit the company more than the business owner. | #*Watch out for specifics in your contract. Most franchise agreements benefit the company more than the business owner. | ||
#*Talk to an attorney or other suitable legal professional to make sure of the legalities of any franchise agreement. | #*Talk to an attorney or other suitable legal professional to make sure of the legalities of any franchise agreement. | ||
| − | #Make a budget for your new business. You will need to include funds for start-up as well as operation. <ref | + | #Make a budget for your new business. You will need to include funds for start-up as well as operation. <ref name="rf2" /> |
#*Your budget plan should definitely include real estate costs: purchasing the land and building costs, or the cost of purchasing an existing gas station. | #*Your budget plan should definitely include real estate costs: purchasing the land and building costs, or the cost of purchasing an existing gas station. | ||
#*An estimation of legal costs, such as attorneys' fees for drawing up business contracts and consultations, will need to be included in your budget. | #*An estimation of legal costs, such as attorneys' fees for drawing up business contracts and consultations, will need to be included in your budget. | ||
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#*Build the costs of gasoline supply and convenience store inventory into your budget. You will need to do research into gas suppliers and store warehouses to see where you can get a cost-efficient contract. | #*Build the costs of gasoline supply and convenience store inventory into your budget. You will need to do research into gas suppliers and store warehouses to see where you can get a cost-efficient contract. | ||
#*Finally, include an estimation of salaries and employee costs, as well as day to day expenses such as gasoline and utilities. You will need to do research in the industry for standard employee salaries as well as costs of gasoline. | #*Finally, include an estimation of salaries and employee costs, as well as day to day expenses such as gasoline and utilities. You will need to do research in the industry for standard employee salaries as well as costs of gasoline. | ||
| − | #Research different companies and obtain a gas supplier contract. You will need someone to supply the gas for your station. <ref>http://petromac.com/Buying-A-Gas-Station-Or-Convenience-Store-Need-Capital-Try-This.html</ref> | + | #Research different companies and obtain a gas supplier contract. You will need someone to supply the gas for your station. <ref name="rf4">http://petromac.com/Buying-A-Gas-Station-Or-Convenience-Store-Need-Capital-Try-This.html</ref> |
#*Different suppliers may offer you different contracts. Basically, a supplier contract stipulates that the supplier will earn a cut of your gas sales. | #*Different suppliers may offer you different contracts. Basically, a supplier contract stipulates that the supplier will earn a cut of your gas sales. | ||
#*Typical profit on gas sales for many gas station owners is 8-13 cents per gallon. This varies around the globe. | #*Typical profit on gas sales for many gas station owners is 8-13 cents per gallon. This varies around the globe. | ||
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#*You should have an attorney look over your contract with your fuel supplier to make sure all the agreements are mutually beneficial and will not involve you in a legal loophole. | #*You should have an attorney look over your contract with your fuel supplier to make sure all the agreements are mutually beneficial and will not involve you in a legal loophole. | ||
===Choosing a Location for Your Gas Station=== | ===Choosing a Location for Your Gas Station=== | ||
| − | #Think about open land available in your region. Can you think of an area in need of a gas station?<ref>http://www.phillips66fuelsupplier.com/new-to-industry/planning-tools/choose-location/</ref> | + | #Think about open land available in your region. Can you think of an area in need of a gas station?<ref name="rf5">http://www.phillips66fuelsupplier.com/new-to-industry/planning-tools/choose-location/</ref> |
#*Market analysis has shown that one of the top things a consumer thinks about in choosing a gas station is location. | #*Market analysis has shown that one of the top things a consumer thinks about in choosing a gas station is location. | ||
#*Customers will want a location that is along a major route to work and convenient in terms of traffic patterns. | #*Customers will want a location that is along a major route to work and convenient in terms of traffic patterns. | ||
#*Think about the set up of your station as well. Customers will want to go to a station that is easy to enter and exit from nearby roadways. | #*Think about the set up of your station as well. Customers will want to go to a station that is easy to enter and exit from nearby roadways. | ||
| − | #Consider the local competition. You will want to avoid an area that is already saturated with gas stations. <ref | + | #Consider the local competition. You will want to avoid an area that is already saturated with gas stations. <ref name="rf5" /> |
#*Look into areas where there is a lot of growth, such as around major cities. As new neighborhoods and business districts crop up, there will be a demand for new gas stations. | #*Look into areas where there is a lot of growth, such as around major cities. As new neighborhoods and business districts crop up, there will be a demand for new gas stations. | ||
#*Research the locations of big-box retailers such as Sam's Club which offer steep gas discounts. | #*Research the locations of big-box retailers such as Sam's Club which offer steep gas discounts. | ||
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#*Consider hiring a modeler to work with you. Many companies exist for site modeling. These professionals will help you build a digital model of your gas station at the site you are planning. | #*Consider hiring a modeler to work with you. Many companies exist for site modeling. These professionals will help you build a digital model of your gas station at the site you are planning. | ||
#*This can help you decide whether or not your design is feasible at the location and if there is too much competition nearby. | #*This can help you decide whether or not your design is feasible at the location and if there is too much competition nearby. | ||
| − | #Think about the accessibility of a potential gas station to local roads and interstates. Your presence along a key interstate or street will draw in customers. <ref | + | #Think about the accessibility of a potential gas station to local roads and interstates. Your presence along a key interstate or street will draw in customers. <ref name="rf5" /> |
#*If your site is close to an interstate or major highway exit, consider investing in advertising signage along that route to increase your business. | #*If your site is close to an interstate or major highway exit, consider investing in advertising signage along that route to increase your business. | ||
#*Take into consideration the flow of traffic during different times of the day. | #*Take into consideration the flow of traffic during different times of the day. | ||
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#*If there is a plan for long-term construction at or near your location, consider purchasing a different lot. | #*If there is a plan for long-term construction at or near your location, consider purchasing a different lot. | ||
#*Even short-term construction projects can impede your business. Remember, your goal is to get lots of customer traffic near your gas station. | #*Even short-term construction projects can impede your business. Remember, your goal is to get lots of customer traffic near your gas station. | ||
| − | #Consider local and state regulations about the building and location of gas stations. There may be local restrictions or fees associated with opening this type of business. <ref | + | #Consider local and state regulations about the building and location of gas stations. There may be local restrictions or fees associated with opening this type of business. <ref name="rf5" /> |
#*Check the history of the site you are considering. | #*Check the history of the site you are considering. | ||
#*If you are purchasing an existing gas station, be aware of any spills or leaks that occurred in the past. You could be held liable by local or state laws for any future complications. | #*If you are purchasing an existing gas station, be aware of any spills or leaks that occurred in the past. You could be held liable by local or state laws for any future complications. | ||
#*If you are purchasing an existing station, check if you are held to the gas supplier contract for that site. Some places have laws that will bind you to an existing agreement. | #*If you are purchasing an existing station, check if you are held to the gas supplier contract for that site. Some places have laws that will bind you to an existing agreement. | ||
===Obtaining Financing For Your Gas Station=== | ===Obtaining Financing For Your Gas Station=== | ||
| − | #Get together documentation to obtain a gas station loan or appropriate loan available where you live. You will need to collect the following types of documents in some countries:<ref>http://www.crefcoa.com/gas-station-loans.html</ref> | + | #Get together documentation to obtain a gas station loan or appropriate loan available where you live. You will need to collect the following types of documents in some countries:<ref name="rf6">http://www.crefcoa.com/gas-station-loans.html</ref> |
#*A copy of your detailed business plan. | #*A copy of your detailed business plan. | ||
#*Three years of tax returns (both personal and business) | #*Three years of tax returns (both personal and business) | ||
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#*Franchise Agreements | #*Franchise Agreements | ||
#*Budget for operating and start-up costs | #*Budget for operating and start-up costs | ||
| − | #Understand that obtaining a gas station business loan is very difficult. The market is becoming very competitive and costs are going up.<ref | + | #Understand that obtaining a gas station business loan is very difficult. The market is becoming very competitive and costs are going up.<ref name="rf6" /> |
#*This is why having a fully researched business plan is essential. | #*This is why having a fully researched business plan is essential. | ||
#*Your location will have to be ideal for being a successful gas station. | #*Your location will have to be ideal for being a successful gas station. | ||
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#*You may have to visit several banks and financial companies before your plan is accepted. | #*You may have to visit several banks and financial companies before your plan is accepted. | ||
#*Understand that you may have to modify your business plan according to investor suggestions. | #*Understand that you may have to modify your business plan according to investor suggestions. | ||
| − | #Consider a small business loan backed by the Small Business Administration. These are often the easiest to obtain. <ref>http://www.dividendamerica.com/business-capital-solutions/gas-station-loans-financing-for-gas-stations/</ref> | + | #Consider a small business loan backed by the Small Business Administration. These are often the easiest to obtain. <ref name="rf7">http://www.dividendamerica.com/business-capital-solutions/gas-station-loans-financing-for-gas-stations/</ref> |
#*Gas stations come with a lot of environmental and other real-estate valuation concerns. | #*Gas stations come with a lot of environmental and other real-estate valuation concerns. | ||
#*Often times, SBA loans can cover costs of environmental issues or re-appraisals. | #*Often times, SBA loans can cover costs of environmental issues or re-appraisals. | ||
#*Other banks can provide similar loans, but lenders suggest it is often easier to obtain financing for purchasing an existing gas station rather than building a new one. | #*Other banks can provide similar loans, but lenders suggest it is often easier to obtain financing for purchasing an existing gas station rather than building a new one. | ||
| − | #Shop at banks to get a good rate on a fuel loan. If you cannot get enough start up funds from a loan from the better business bureau, you can try for a more traditional business loan.<ref | + | #Shop at banks to get a good rate on a fuel loan. If you cannot get enough start up funds from a loan from the better business bureau, you can try for a more traditional business loan.<ref name="rf7" /> |
#*Make an appointment with a loan officer from a bank. | #*Make an appointment with a loan officer from a bank. | ||
#*Show him/her your business plan for your gas station. | #*Show him/her your business plan for your gas station. | ||
