How to Open a Gas Station

Making A Business Plan

1. How to Open a Gas Station Picture 1
   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.

   1. 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.
   2. A fully fleshed out business plan will be more attractive to lenders and investors.
   3. You will need to include a description of the services, products, and amenities (air stations, car wash, vacuum stations etc.)
   4. For example, you will want to detail how many gas pumps you will have, if you will have a carwash, an air pump or vacuum station, how many restrooms, what type of snacks/food your convenience store will carry.
   5. An analysis of the local market and competition will need to be included.
   6. You will need to explain where other similar businesses are located and why your business will do well in competition.
   7. Provide a detailed plan of the organization and management of the business.
   8. For this section you will need to detail who will be running the finances of the company, who will be managing the store and inventory, and who will handle any legal concerns.
   9. Include an advertising and marketing strategy.
   10. Suggest ways in which you will advertise in local papers, and get business going.
   11. Make a detailed budget and estimation of start up costs.
   12. 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.
   13. Write a mission statement and goals for your gas station business.
2. How to Open a Gas Station Picture 2
   Research what types of insurance and permits you will need to operate a gas station. This can vary by country, state and county.

   1. You may need a permit if you wish to sell tobacco and alcohol.
   2. 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.
   3. You may be required to have liability for customer injury. Many insurance policies are available to business to cover these instances.
   4. 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.
3. How to Open a Gas Station Picture 3
   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. ^[2]

   1. A franchise agreement allows a franchisee (you as a business owner) to use the trademark, products, and business models of a larger company.
   2. For example, if you entered into a franchise agreement with Sunoco, you would essentially own a Sunoco station.
   3. Franchisees have to pay royalties to the parent company. This is usually a percentage of sales or a monthly fee.
   4. Most gas stations are part of a franchise agreement.
   5. Before you decide to franchise or sign a specific franchise agreement, you will need to do your research.
   6. Talk to other business owners who have a franchise agreement with the chain you want to open.
   7. Know what you are getting into. Look at a franchise contract to know what your rights and responsibilities are.
   8. Watch out for specifics in your contract. Most franchise agreements benefit the company more than the business owner.
   9. Talk to an attorney or other suitable legal professional to make sure of the legalities of any franchise agreement.
4. How to Open a Gas Station Picture 4
   Make a budget for your new business. You will need to include funds for start-up as well as operation.

   1. Your budget plan should definitely include real estate costs: purchasing the land and building costs, or the cost of purchasing an existing gas station.
   2. An estimation of legal costs, such as attorneys' fees for drawing up business contracts and consultations, will need to be included in your budget.
   3. Insurance and permits will be costly and you should include this in your budget estimate.
   4. You will need funds for set-up of your gas station.
   5. Include an estimation of costs for promotions, advertising, and signage.
   6. Make sure you have an estimate of costs of start-up inventory and cash you will need to have on-hand.
   7. 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.
   8. 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.
5. How to Open a Gas Station Picture 5
   Research different companies and obtain a gas supplier contract. You will need someone to supply the gas for your station. ^[3]

   1. Different suppliers may offer you different contracts. Basically, a supplier contract stipulates that the supplier will earn a cut of your gas sales.
   2. Typical profit on gas sales for many gas station owners is 8-13 cents per gallon. This varies around the globe.
   3. Don't immediately sign a fuel contract with a local supplier unless you are required to contract with a specific company by your franchise agreement.
   4. It is best to shop around for companies which will offer you the most profit on your gas.
   5. 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.