800fund.com shares some fresh views on Gas Station Businesses
Are you considering opening a gas station?
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. 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.
Earning a decent profit selling gas usually has to be taken out of the equation of a gas station, so where should the focus be placed? With attention to certain details within the customer service realm, you can probably increase business the following ways:
Profit from a Convenience Store
Most gas stations you see now have convenience stores on site to pull in extra money. This doesn’t mean all gas stations will buy into the convenience store model considering it takes capital to acquire one. Nevertheless, selling food items can make a significant difference in profit, especially if you’re located near a highway off-ramp. You may even want to consider lottery.
Offer non-gasoline items
Items that attract customers include beverages – both soft drinks and beer – snack items and cigarettes. Drivers won’t mind stopping for gas as much if they know they can purchase other items that can make the journey more pleasurable. On a hot summer day, cold drinks are most welcome. Many gas stations are expanding and adding 7/11 or other convenience stores that offer staples such as milk and bread, in addition to snacks and beverages. Stopping at the gas station can eliminate — or at least delay — the need to stop at a grocery store.
Adding advertising to your budget is more than worth the money you’ll likely make back. While an ad for a gas station is usually uncommon on TV or in newspapers, having good signage on highways or in town helps promote that you’re nearby. Particularly if you have a convenience store, prominent signs indicating this will increase your business with locals and tourists.
Location, Location, Location!
Can you think of an area in need of a gas station?
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. 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.
Successful Business Plan
You will need a very well detailed Business Plan in place in order to appeal to lenders and/or investors.
Be sure to include a description of the services, products, and amenities (air stations, car wash, vacuum stations etc.) 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.
You will need to include funds for start-up as well as operation.
- 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.
- Insurance and permits will be costly and you should include this in your budget estimate.
- You will need funds for set-up of your gas station.
- Include an estimation of costs for promotions, advertising, and signage.
- Make sure you have an estimate of costs of start-up inventory and cash you will need to have on-hand.
If you should find yourself in need of additional working capital, 800fund.com is here to help. We’re a phone call away!