The Gas Station industry is vast and thriving all over the world. There are around 168,000 service stations in the US. According to statistics, 10,719 licensed service station companies employ approximately 120,226 people in the United States of America alone. Besides, the industry brings in 106 billion dollars a year. Opening a gas station can be very lucrative.In this article you will learn how to write a gas station business plan
However, the creation of your business must be well planned to function. That’s why it’s great to learn how to write a gas station business plan before you start.
The business plan provides daily instructions on how to operate the gas station. This is useful if you’re looking for funds to rent or buy stations or buy fuel with products. After creating your business plan, your gas station will be ready to differentiate it from the competition, make a profit, and develop it, which will tell you how to supply the fuel you need.
Why is the Gas Station business plan mandatory?
Are you pondering how to open a gas station? You must start by writing the gas station business plan. Strictly speaking, this document is not mandatory, but it is highly recommended for a project of this magnitude.
Writing a gas station business plan is very useful for:
- Predict the profitability of a service station;
- Convince investors (entrepreneurs, banks, etc.);
- Take a step back from the project.
How to create a gas station business plan?
For many entrepreneurs, it is not easy to structure a business plan properly. However, whether it is to buy a gas station or build it, the process is quite simple.
In terms of substance, the gas station business plan should answer the questions your potential investor has, including:
- What is the project? (Place, interest, legal form, etc.)
- What will be the benefits?
- Who are the targeted customers?
- How is the market doing?
- What are the costs?
- What are the gains?
- How will the gas station develop?
Let’s discuss it in detail…!
Preparation of Business plan
Do your research
Compare your services with other gas stations near the proposed location. See what works and what doesn’t. Next, find a consultant who owns the station in the past or present. Gas station owners outside of your area will usually give you valuable information and advice because you are not competing.
Start by estimating business costs and potential profits.
Make a list of the different types of fuel and vehicle maintenance you want to include. Once the gas label has been decided, the dealer should determine the potential costs and benefits. Consider staff salaries and hardware costs. If you are thinking of buying a franchise service, the franchise business can get good information about costs and potential profits, especially if you are affiliated with Mini-Mart.
Check local, state, and federal licensing, environmental, and permitting laws. If you are purchasing an existing gas station, contact state and local environmental authorities to determine if the property needs to be cleaned of toxic waste.
Business plan development
Write an executive summary. Describe a concise description of the entire business proposal. These are usually a few paragraphs, but not more than one page. It should give the reader a basic understanding of the proposal without reading the details. Briefly include a mission statement and purpose, then place it at the beginning of the proposal.
After executing summary, start writing a business plan based on the information you learned from your research. The first part describes the economic model. List the types of gas stations such as law, property rights and fuel only, fuel repair garage, mini fuel market, or a full list of services. Include a brief experience of yourself and your partner in this project.
In the next segment, add your revenue model. Explain how you make money and what products and services you offer. Describe how you will compete with other gas stations, expected seasonal differences in revenue, and how you will enhance your profits.
Add your marketing model in the next part. How you’ll market your gas station? Describe your service area’s demographics. Explain how you intend to entice consumers through specific advertising, publicity, and community activity sponsorship.
Develop a sales and marketing strategy that will appeal to customers and fill their tank. Your strategy includes offering a bonus program and giving drivers a fuel price tag. If you plan to sell products inside the station, you should mention promoting food and beverages on the pump. If your station is part of a franchise, please provide details about the parent company’s advertising and promotion.
Explain the organization and management of gas stations. Create a hierarchy of your employees and include their job descriptions and details in it. Also, describe the gas station’s physical layout (building layout, cash register location, etc.).
Describe your background and demographics as an owner. It helps to let the investor know that you’ve the skills and experience to build a profitable station. If you don’t have the experience, explain how you can help other companies succeed. If you don’t have personal experience running a gas station, look for equipment brought in by a manager who knows the industry and gives you details.
Create a financial projection to determine the initial cost of leasing or purchasing a gas station and operating a pump. The financial statements should also include the cost of licenses, salaries, utilities, and required environmental services. The Revenue Estimate calculates the expected revenue from the sale of fuels, automotive products, and incentives.
The initial financing plan indicates the capital to be raised to launch the project under good conditions. To correctly identify all sustainable financing needs, a thorough analysis and calculation must be carried out to determine the amount of working capital requirement correctly.
- The income statement for the first three years: It allows you to judge the new company’s future profitability.
- The 12-month cash flow plan: this table makes it possible, over a relatively short period, to ensure that the new company will always be able to meet its financial commitments. However, it must be based on what one can reasonably predict,
- The calculation of the break-even point: It is important to know the company’s turnover must imperatively achieve to cover all of its expenses. Besides, it helps to determine the moment when this threshold (break-even point) will be reached. Beyond that, the company begins to make profits.
- The three-year financing plan: this table is necessary to assess the company’s financial structure’s forecast evolution in the medium term. An excellent financial structure is one of the conditions for new companies’ sustainability.
- The table of credit annuities (if there is a medium or long-term loan): knowing the breakdown of loan repayments is necessary to feed the income statement (financial charges) and the 3-year financing plan (repayment of borrowed capital).
Now you know everything about the gas station business plan. Whether you want to integrate a gas station franchise or start your gas station on your own, all you have to do is get started.