There is no denying that the fuel business continues to thrive as one of the most lucrative investments in the world. Everyone needs fuel for their cars when driving to work, running some errands or finding leisure in their free time. Commercial industries such as logistics, couriers and deliveries need to fill up their engines to operate.
Imagine all these necessities happen every single day. The entire world literally runs on gas, making the global demand for fuel a great opportunity to consider investing in its profit margins. However, it takes smart planning and significant funding to open and run a successful petrol station.
Whether you are planning to purchase a petrol station or sign a franchise agreement but your plans keep delaying because you don’t know where to start, you’ve followed the right roadmap to open your very first gas station. Sure, this will be a big business, but it shouldn’t discourage you from supporting your entrepreneurial spirit.
To begin with, here are the important things you need to understand fully before you move forward.
Franchised vs. Independent
Have you decided whether to start your own independent station or buy a franchise from big petrol names? When choosing between these options, it is crucial that you understand which suits your demands and financial resources.
You can own and operate a franchised petrol station under a franchise agreement with its national supplier. While a franchised station can put your business in advantage by providing a well-established name recognition, trademark and trade design, this can be a big-ticket option for aspiring entrepreneurs. If you prefer a franchised station, there are a few considerations you need to discuss with your lawyer. These include the terms of agreement, requirements for fuel sales and issuance of ownership and maintenance of pumps and tanks.
Independent stations, on the other hand, are not supported by a national supplier. If you are looking into this option, you need to work with your own supplier of on-site refuelling. Basically, independent stations offer unbranded fuel obtained from a wide array of regional suppliers.
Additional Services/Products
The secret to bringing in a bigger revenue is by selling items other than your main product. Consider offering additional services like air stations, car wash and lottery ticket stores. Likewise, it’s not rare to find stations with convenience stores attached on the side these days. Most drivers would love to buy items that will help them pass the time during long hours of driving. You can offer convenience-store items like tobacco, candies, sodas and other travel essentials to boost your profit margins.
Location Hunting
The place where your gas station is located can greatly influence your traffic sales. To make sure you’re not putting up your business at the wrong place, here are a few tips to keep in mind:
Avoid locations near a fierce number of competitors or wholesale retailers that offer extremely discounted prices.
Find prospective upcoming neighbourhoods (preferably away from major cities) that will be in need of petrol stations to fill up for long drives.
Consider an isolated area (near a populated highway), where you can offer petrol services to truck drivers.
Risk Factors
Starting a new business comes with multiple risks, especially for petrol stations. But, one thing that will keep this business afloat is a risk management plan. Before you open and run your first petrol station, make sure you build a long-term risk management plan alongside your business scheme. The environment history of your chosen area to open in may be very important, but nothing matters more than the future of your business. By creating a smart and futuristic risk management plan, you will not just have a focus and direction towards the goal of your petrol station but you will also define your best responses to uncertain events that may have a negative impact on your business goals.
