Knowing how to outset a gas station successfully is only role of the procedure of starting a gas station concern. Hither's your in-depth 10-step guide to get your gas station running smoothly!

Tabular array of contents
  1. Write Your Business Plan
  2. Fix Your Business concern
  3. Get Funding For Startup Costs
  4. Purchase Property and Equipment
  5. Find A Supplier
  6. Get All Necessary Permits And Insurance
  7. Set up Your 24-hour interval-To-Day Responsibilities
  8. Marketplace Your New Gas Station
  9. Prepare For The Future
  10. Moving Forward on Starting a Gas Station: Gear up and Implement

Opening a business can be a complex process full of unforeseen surprises, and opening a gas station is no different. With an estimated market place size of $138 billion in 2022, in that location is plenty of opportunity waitial wng if y'all play your cards right.

If you've always dreamt of owning your own concern only have no idea how to open up a gas station, this guide volition walk you through all the necessary steps. Follow it closely to ensure that your new business volition exist well planned out, legally compliant, and in a higher place all, successful.

Write Your Business Plan

Like any successful business, opening a gas station starts with meticulous planning. Your business plan is much more just an outline of your goals—it will help yous identify, describe and analyze the specifics of your business and is key in securing funding for your future gas station.

To assistance yous go a articulate picture of your path forward, your business plan should include the following points:

Market analysis

Gas stations operate in a competitive market place characterized past razor-thin turn a profit margins of less than 2%. That's why you must research and empathize your competition, so y'all learn from their success and avert their mistakes. Some of the questions you want to ask in your market assay are:

  • What are your competitors' strengths, and how can you conform those strengths to your own business?
  • What are your competitors' weaknesses, and how can you eliminate those weaknesses in your own business?
  • How can you solve the same problems better or different than your competitors?
  • Who are your straight competitors, and could they be a significant threat to your gas station?
  • Who is your platonic customer?
  • How can you use location to drive traffic to your concern?

Location

The location of your gas station tin can make or intermission your business and should be an absolute priority during the planning stage. If you lot've washed your market analysis correctly, you should already have a good idea near whether the location you picked tin can propel your business forward. Are you planning to open your gas station forth a populated highway and focus on truck drivers and commuters or have you chosen a location across from an established competitor that isn't maximizing its potential?

When choosing a location for your gas station, a good tactic is to wait into budding neighborhoods or industrial parks. These locations are often just outside the city and require a gas station. That can interpret into more than commuters and cheaper existent estate, just the location might lack the existing infrastructure needed to operate your gas station.

How much does it toll to open a gas station?

Starting a gas station is not cheap; you can expect to spend anywhere between $250,000 to $2,000,000 to become your business off the basis. The verbal costs vary depending on the state you're in, your chosen location, and whether you buy a franchise or open an independent location. Your business organisation programme should include detailed estimates of the cost involved.

Use this list as a guide for the costs you lot need to research:

  • Purchasing or leasing the location
  • Securing a franchise agreement
  • Registering your business organization
  • Trademarking a business name
  • Insurance, licenses, permits, and other legal fees
  • Securing a supplier
  • Inventory (gas, consumables)
  • Setting upwardly your gas station
  • Setting up your convenience shop
  • Hiring and training employees
  • Royalties per your franchise agreement
  • Marketing materials

In addition to the cost of opening a gas station, your business organization program should also piece of work out an educated guess of the running cost of your business concern. This should include all expenses from licensing and insurance to inventory and payroll.

List your products and services

Modern gas stations are much more than just a row of fuel pumps, and you'd be difficult-pressed to find a successful gas station that doesn't offer additional services. Your business plan should include the number of gas pumps you intend on operating (based on your marketplace research) as well as additional products and services to maximize your profit margins. The well-nigh common products and services at gas stations include:

  • Convenience stores selling snacks, drinks, motorcar accessories, tobacco, alcohol, and lottery tickets
  • Automobile washes (Total service or self-service)
  • Air pumps
  • Restrooms
  • Mechanic for oil changes and repairs (increasingly rare nowadays)

Keep in mind that each of these services carries its own costs, in addition to permits and maintenance requirements. If you lot decide to operate your gas station through a franchise agreement, you will likely also exist limited in the services and products you tin offering.

Set Upwards Your Business organization

Forming a legal business entity is the side by side footstep in starting a business concern. Make sure you consult with your attorney to talk over which blazon of legal entity is all-time for you.

While a sole proprietorship is the quickest entity to set up and enjoys certain tax benefits, running a gas station this way is not recommended. Gas stations are a risky business, and should at that place ever be an accident or fifty-fifty a robbery, you lot alone will be liable for amercement.

That's why most gas station owners opt for a Limited Liability Company (LLC). This nonetheless gives you some of the tax benefits used past sole proprietors only protects you from beingness personally liable for any legal problems.

An LLC is especially attractive for modest business owners that own only one gas station, as y'all volition pay lower fees than a corporation and get to choose if you want to be taxed as a sole proprietor or a corporation. However, it can make it more difficult to secure a loan for your business organization.

Registering a corporation offers you the aforementioned legal protection every bit an LLC only comes with boosted costs and double taxation (corporate tax + income tax). It'southward by and large recommended for owners that plan to open a chain and grow their business organisation to compete with the big brands out there.

Forming an LLC or a corporation is relatively simple and, in most states, can be done online. If you don't desire to deal with the paperwork at all, plenty of companies volition practice all the work for you. Their services will usually include filing as an LLC or corporation and registering with the IRS. (Don't skip this step!)

Register for taxes

Equally a small business possessor, you must get an employer identification number to open your gas station. An EIN is a nine-digit number used when filing your business concern taxes with the IRS. Yous can easily utilize for an EIN online with the IRS and should receive your number in just a few minutes.

Depending on tax regulations in your state, yous might also need to register for a state revenue enhancement ID when starting a gas station. Be sure to consult with an accountant or revenue enhancement lawyer to avert missing annihilation important.

Purchase a franchise

Most gas station owners choose to get into business concern past buying a gas station franchise. This tin can reduce some of the fiscal burdens of opening a gas station and has the added do good of immediately giving your gas station a recognizable brand.

When choosing a franchise, make sure you lot intimately sympathize the franchise agreement and concur with its terms. Each franchise has different requirements for y'all to get a franchisee, and many won't fifty-fifty consider you if you don't accept a background in management or entrepreneurship.

Check the qualifications of some of the bigger gas station franchises to detect 1 that matches your concern program:

  • Chevron
  • Shell
  • ExxonMobil
  • ConocoPhillips
  • Circumvolve K
  • LUKOIL
  • Sunoco
  • Marathon

Before signing whatsoever franchise agreement, make sure you have reviewed the contract with a specialized lawyer. They can also help yous negotiate the terms of your agreement and secure lower royalties and other benefits.

Open a business organisation bank account and credit card

Many first-time business owners brand the mistake of using their personal bank account for their concern. This can not only complicate your accounting simply also put your personal assets at take a chance if your business organization ever gets sued.
Don't make the aforementioned mistake and open up a business depository financial institution account early on. Additionally, learning how to build business concern credit tin can help yous get financing and business credit cards with better involvement rates and college lines of credit in your business'south name.

Get Funding For Startup Costs

With your business plan fleshed out and your business concern registered as a legal entity, it's time to get funding for your gas station. As we've already established, opening a gas station can cost anywhere between $250,000 to $two,000,000, so outside funding will be inevitable for most people.

If you've done your homework in your business organisation plan, you are well gear up to request a loan. There are several avenues bachelor for small businesses to get a loan.

Business concern loan from a bank

If this isn't your beginning rodeo and you lot can show a stellar runway tape with previous businesses, a conventional banking concern loan tin be an option. Simply even then, most banks will decline your request for a loan due to traditionally slim turn a profit margins and the perceived risk of a gas station business organization. This doesn't hateful you shouldn't try, only you should come well-prepared with a water-tight business plan and anything documenting your previous business experience.

Small Business Administration (SBA) loans

The Modest Business Administration has loan programs designed to help small businesses, such as gas stations, get started. While the SBA doesn't lend money directly to you lot, they work with other lenders to reduce their take a chance on a loan by backing it by as much as 85%.

SBA loans usually require low down payments and offering reasonable interest rates but you lot may accept to put downwardly a lot of collateral. SBA loans too require a lot of paperwork, can be difficult to secure, and usually take a long fourth dimension to become approved.

Other options

Besides loans, prospective gas station owners often fund their initial costs through low Apr business organisation credit cards or friends and family. Business credit cards can be a expert option for smaller purchases like equipment and inventory, simply you need to be careful to pay off what y'all owe in time.
Family and friends can also exist a good option if you tin can hold on mutually beneficial terms with everyone. These can range from zero-interest loans to them receiving equity in your business. Be warned, though, that mixing business and family has ruined more than than ane relationship.

Shell gas station

Purchase Property and Equipment

Once you've taken care of the funding that you'll need to start a gas station concern, you'll be able to officially buy or lease the belongings where you'll have your station. Before signing the buy (or lease) agreement, there are a few of import pitfalls to look out for:

Who owns the equipment?

If the site has this equipment, make sure that the sale also includes ownership of the pumps, tanks, and other necessary equipment. Many gas station owners don't own the equipment itself only charter information technology from the property owner or a franchise.

Depending on the term of your franchise agreement, you may be required to employ specific equipment, branded pumps, etc. In these cases, you volition desire to exclude existing equipment that does not conform to these requirements from the purchase. Make sure to utilize a qualified lawyer to finalize the sale.

Bank check the maintenance history of all tanks and pumps to ensure they work and comply with country regulations. More than one gas station possessor has lost their business concern because they purchase a station with lacking equipment.

Environmental Assessment

If you want to open up a gas station, you take to get a and so-called Phase one Environmental Assessment of the location done. This document, which has to exist prepared by an environmental professional, determines the environmental history of the location and the backdrop surrounding it.

Without this document, you won't get a loan from the SBA. More chiefly, the Stage 1 Cess will allow you lot to cancel a purchase agreement if the assessment shows issues and your purchase agreement includes an ecology contingency clause.

All Essential Gas Station Documentation in One Place

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Find A Supplier

If you are operating your gas station as a franchise, check your franchise understanding to come across if y'all are bound to a specific supplier for your gas (chances are you are). If not, information technology's time to enquiry dissimilar gas suppliers and do a thorough rate comparison.

Gas suppliers often receive a percentage of your sales, and then be sure to compare and negotiate.

Your business plan should offer you a good estimate of how much gas you volition need and how often your reserves should be replenished.

Once again, have an attorney look over your franchise agreement and your supplier contract to ensure you don't hold to anything you shouldn't.

Get All Necessary Permits And Insurance

I footstep that can't be skipped when opening a gas station is acquiring the proper permits and insurance. The specific licenses will vary from state to state, and it is your responsibility to brand sure that everything complies.

Some standard licenses and permits include:

  • Building and burn down inspection
  • Tank and pump inspections
  • Water discharge permit
  • Alcohol, tobacco, and lottery ticket licenses
  • Nutrient and beverage distributor licenses
  • Document of occupancy
  • Health inspection

This is as well a good time to ensure that your new concern is properly insured. General liability insurance is a given, merely gas stations require a trivial more than basic business insurance.

Boosted insurances can include:

  • Workers' compensation insurance
  • Fuel tank contagion insurance
  • Liquor liability insurance
  • Franchise insurance

Set Up Your Day-To-Day Responsibilities

Establish hours of operation

While writing your business plan, you volition likely accept already decided your business hours. Many gas stations, particularly in high-traffic areas, are open up 24/7, and if you want to proceed up with the competition, yous might have to practise the aforementioned.

That ways hiring enough employees to cover all shifts. Brush upwardly on your cognition of unlike types of work schedules, besides as the benefits of total-time vs. part-time piece of work schedules. Nosotros highly recommend researching the best tools for fourth dimension tracking, job, and shift scheduling, advice, reporting, and more than to ensure you manage your employees equally efficiently as possible.

Larn about inventory direction

Since your gas station will likely sell not just gas but also a range of appurtenances, such as snacks, drinks, and accessories, you must keep your inventory organized. Learning how to keep a running inventory every solar day will let you identify when you lot demand to restock before you run out of products. Make sure to nurture adept contacts with your vendors and understand estimated delivery dates to amend coordinate when you need to resupply.

Set up up security measures

One of the major risks to gas stations, especially those operating around the clock, is crime. If you've been following this guide, y'all'll already be insured against theft, only it'southward of import that yous and your employees are safe. Invest in installing security cameras and shatter-proof windows as an additional security measure and establish protocols so your staff knows what to do in an emergency.

Market Your New Gas Station

Now that all the hard parts of starting your gas station are out of the style, information technology'south time to start marketing your new business. If you picked the correct location for your gas station, you lot'll probable receive some customers that only saw your business and decided to stop. But to make your gas station a success, you'll need to invest in a proper marketing strategy.

Become active online

Google Maps, Apple Maps, and Waze are fantastic tools to help drivers detect your business concern on their commute. Make sure to listing your gas station on these services so you'll popular up when they search for a gas station nearly them.

In addition, open up a business business relationship on Yelp and any local business organization directories. Yous can even create a comprehensive social media strategy for all major platforms like Facebook, Twitter, Instagram, and TikTok.

Use pole signs and highway exit signs

Proficient, one-time-fashioned highway signs tin help a new gas station business get off the ground, specially if you lot're located near major exits or commuter hubs. Many drivers don't have loyalties to specific brands and just want to find the closest gas station. If you're running special offers or discounts, brand certain to allow drivers know to give them an actress incentive to visit your gas station.

Create a loyalty program

To continue people coming back, consider offering a loyalty program when y'all're starting your gas station and slowly build up a loyal client base of operations. Smart marketers know that many times it'south cheaper to retain existing customers than to find new ones. Crunch the numbers for your business organization to effigy out how much you can spend to keep your customers coming back.

Lower your prices

Nosotros've mentioned previously that gas stations operate on very thin turn a profit margins when looking at gas sales only. In fact, most gas stations make the bulk of their profits with all the other services and goods they offering. Consider lowering your gas prices by simply a few cents to attract customers that will buy additional items from your convenience store.

Partner with nutrient franchises

Nowadays, many gas stations partner with food franchises to attract hungry travelers to their business. If you've picked your location well, a partnership with a nutrient franchise can be mutually beneficial and transform your gas station into a rest end. This creates even more than opportunities for customers to as well enter your convenience store and buy goods.

gas station

Fix For The Time to come

Information technology's no surreptitious that the gas station industry is in decline. As of early 2020, in that location were roughly 115,000 gas stations in the United states of america, and that number is falling apace. That doesn't mean that people are driving less, just they are switching from petrol-based cars to electrical cars.

Get alee of the contest and already install a number of charging stations for electrical vehicles. Not simply volition this fix your gas station for the (non-so-distant) future, just it volition put your business on the map for the electric vehicle community and ensure a steady flow of customers.

Moving Frontwards on Starting a Gas Station: Prepare and Implement

Now that you lot have a solid roadmap for how to start a gas station, all that's left is for you to implement it. Get-go with a comprehensive concern program, and don't permit yourself get discouraged by the inevitable setbacks you will feel.

Gas stations come across tight margins, but they can turn a decent profit if carefully planned and well run. Fifty-fifty with the growth of electric and hybrid vehicles, conventional gas stations will be around for at least a few more decades.

Do your enquiry, gear up your contingency program for when incidents occur, and near importantly, don't be agape to go with the times.

If you take all of this advice to heart, your gas station is off to a roaring success.

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