How to start a gas station Kiran / 13.07.202013.07.2020 How to Buy and Run a Successful Gas Station Apr 14, · Starting a gas station requires a significant amount of money when you factor in purchasing property, stocking up on supplies, paying employees, and keeping up with regulations. Jan 27, · Start a gas station by following these 9 steps: STEP 1: Plan your business. A clear plan is essential for success as an entrepreneur. It will help you map out the STEP 2: Form a legal entity. The most common business structure types are the sole proprietorship, partnership, limited STEP 3. 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, how to start a gas station 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. 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 what is interior design salary you in finding the gaps and accordingly plan your gas station business. 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. 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. 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. 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. 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. 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. Owners of the gas station must hold a business license and federal and state how to hard reset palm pre identification numbers. Every country and states have different sets of rules and regulations for the gas station business. If you are from the How to start a gas station 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. 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. You first need to create an organizational flowchart before starting to hire manpower. Decide on the number of how to start a gas station 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. 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. 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. Our aim is to educate the entrepreneur on the various stages of entrepreneurship. Skip to content. Spread the love. Here are the Steps to Follow to Start a Gas Station Business May 05, · Draw up a business plan for your gas station. Discuss it with an accountant to get a realistic professional opinion about your estimated expenses and income. A business plan involves several key pieces of information and is more than just a simple outline. You will need to include as much detail as possible%(39). To operate your gas station successfully, you need to plan and equip your station with basic equipment. In this age and time, you must procure the basic technology to keep up with the trends in terms of dispensing the gas, transporting the fuel to your station, securing the station, entertaining motorists who drive in to fill their tanks and collecting payment when the product is sold. Starting a gas station or filling station or petroleum station as it is typically called in some parts of the world is indeed one of the means of owning a business portfolio in the oil and gas industry. This is for sure one business that has made a lot of people millionaires or even billionaires. Familiarize yourself with your day-to-day responsibilities. Writing a comprehensive business plan will be key in convincing lenders to approve your loan application or getting investors interested in funding you. When writing a business plan for a gas station, here are some points to research:. List your products and services. Gas stations are rarely limited to motor fuel. In addition to recording the number of gas pumps and fuel options will be available at your gas station, you should research additional products and services to boost your profit margins. Market analysis. The gas industry has a competitive market. In your market analysis, here are some questions you want to answer:. How can you eliminate those weaknesses in your own business? How can you solve the same problems better or differently than your competitors? Will your competitors be a significant threat if you opened your business? How can you use location to drive traffic to your business? Reference back to your market analysis and how your chosen location is advantageous to your business. Will you choose a location where there is a fierce competitor across the street from you? Or will you choose an isolated location along a populated highway and cater to truck drivers and traveling families? One tip when choosing a business location is to research up-and-coming neighborhoods. Register a business entity. Every business operates as some kind of business entity or business structure. However, when starting a gas station, we do not recommend operating as a sole proprietor. A gas station can be exposed to many risks, like burglaries and leaks, and you want to ensure that your personal assets will be protected. The two most common business structures for gas stations to consider are limited liability companies LLCs and corporations. You may want to consider consulting a business attorney to determine which legal structure is best for your needs. Also, they tend to pay lower annual fees. This business structure tends to be attractive to gas station owners who choose to stay small, especially if they own only one gas station. However, LLCs usually experience more difficulty raising money from investors. Corporations tend to attract business owners who expect to raise capital from investors. If you expect to own a chain of gas stations or grow your gas station brand to compete with industry leaders, like Shell of Chevron, then a corporation may be the business structure for you. In some states, you may also have to publish a notice in a local paper. Choose a unique business name. When it comes to how to open a gas station, you want to ensure that your business name is unique so that it is not confused with another company. Register for taxes. An EIN is a nine-digit number used when filing your business taxes. You can apply for an employer identification number online with the IRS. You should receive your EIN within minutes after applying. Depending on tax regulations in your state, you may also need to register for a state tax ID when starting a gas station. Buy a franchise. Many drivers opt to buy gas from a familiar national brand, even if a competitor offers a lower price. There are several advantages to buying a franchise, like using an existing trademark and operating within a proven business model. However, you would need to pay royalties to the parent company. If you decide to buy a franchise, make sure you have a business attorney review the legalities of any franchise agreement before signing. Starting a gas station requires a significant amount of money when you factor in purchasing property, stocking up on supplies, paying employees, and keeping up with regulations. However, with all the costs involved in starting a gas station, we recommend opening a separate bank account to keep your business and personal finances separate. How much does it cost to start a gas station? As we mentioned before, starting a gas station has a high financial entry barrier. Also, there will be ongoing costs following the startup costs. If your gas station will be operating 24 hours, you will need to pay for employee wages, utilities, and replenishing inventory. Also, the cost of replenishing your fuel reserves can rack up quickly. Financing your gas station. To cover these high initial costs, you should consider applying for a business loan through your bank. Unfortunately, slim profit margins tend to characterize gas station businesses. Some other financing options include:. SBA loans. When purchasing the location for your gas station, it's important to discuss ownership rights to any existing tanks and pumps that may already be there. This is an important step when it comes to how to open a gas station: Before finalizing the purchase agreement, first confirm whether the sale transfers ownership rights of the pumps and tanks to your name. When outlining your purchase agreement, remember to include an environmental contingency clause. If an environmental site assessment yields unfavorable findings, you can withdraw from the sale and get your deposit refunded. Gas suppliers often earn a percentage of your sales, so you should do a thorough rate comparison to ensure you are maximizing your own profit margins. If you are operating a franchise, review your franchise agreement to determine if they already have a preferred vendor for gas supply. Again, have an attorney review your franchise agreement and gas supplier contract to ensure you are maximizing profit and avoiding any hidden fees. When it comes to how to open a gas station, the necessary permits and licenses will vary from state to state. Generally, you would be required to obtain permits for the following:. Certificate of Occupancy. We highly recommend that you buy business insurance to protect your business. Operating a gas station can expose you to several risks on a daily basis: burglary, employee injury, equipment breakdown, property damage, and more. Insurance helps to keep you and your assets protected. Use pole signs and highway exit signs. When seeking a gas station, many drivers just want to find the nearest one, fill up, and then leave. Get active on Yelp. Drivers often use Yelp to find the nearest gas station. Boost your rating by offering stellar customer service, clean facilities, and responding to reviews. Create a loyalty program. Partner with food franchises. This can be great for business because it transforms your business from a gas stop to a rest stop. This creates more opportunities for customers to also enter your convenience store and buy consumer goods. Consider lowering your gas price. Many gas station owners increase their profit margins through their convenience stores. Lowering your prices, even by a cent, can attract more drivers to your location, increasing the likelihood that customers will leave the pump and enter your store to buy a drink or other goods. Install more gas pumps. This chore becomes more of an annoyance when people drive into a fully-packed gas station. Adding more gas pumps makes the gas-filling process as convenient as possible. Just the availability of gas pumps can attract drivers to your gas station. Establish hours of operation. Many gas stations are open 24 hours a day. If you want to keep up with the competition, your own gas station might have to operate 24 hours as well. Punctuality is essential when operating a gas station. Often, drivers will stop by for gas in the early morning before work. Since your gas station will likely sell a variety of consumer goods, like snacks and drinks, you must keep your inventory organized. Running inventory every day will help you identify when your reserves are low and you need to restock. Make sure you also get estimated delivery dates on vendor delivers to better coordinate when you need to resupply. Set up security measures. Gas stations, especially hour operations, are particularly vulnerable to crime. Consider installing cameras and shatter-proof windows as an additional security measure. Also, daily bank deposits will help keep your cash assets safe from burglaries. There are several elements unique to starting and operating a gas station. While there are some risks involved, careful preparation and smart decisions will help mitigate any costly errors down the line. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations.