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How to Write a Gas Station Business Plan: Step-by-Step Guide
A gas station can be a profitable business, depending on its location and whether there are additional services attached to it, such as a convenience store. Gas stations can generate around $50,000 to $100,000 in revenue annually. In 2022, the global total revenue, according to McKinsey, was $719.6 billion, with a 2.4% decline in 2023 as prices tempered. If you want to open a gas station, you will need a business plan to present to banks or investors to acquire the funds needed to start your business. This plan will also serve as a working document and a roadmap to guide your operations.
For your gas station to be successful, consider the following:
Adding a convenience store: According to NACS, it is estimated that 80% of gasoline purchased in the United States occurs at local convenience stores. Given the slim margins per gallon, it is recommended to add a convenience store to increase revenue. According to Statistica, “the industry recorded sales of nearly $650 billion, with more than half of it coming from the sale of motor fuel.” This demonstrates that when a gas station includes a convenience store, the revenue generated by customers filling up their tanks and shopping at the store almost doubles.
Diversifying your product and service offering: With an increase in electric vehicles, you can add EV charging stations. Also, consider offering fuel that includes a biofuel blend to attract environmentally conscious motorists. Some state laws require petroleum diesel to contain a small percentage of biodiesel. According to Growth Energy, more gas stations are starting to offer gasoline blended with 15 percent bioethanol. Other complementary services can include self-service car washes, oil changes, and air pumps.
Providing loyalty programs: These programs create repeat customers, build brand loyalty, and keep customers engaged. By implementing customer management technology, you can gain insights from customer spending behaviors and know how to offer personalized services. Loyalty programs, when implemented effectively, encourage cross-selling and increase customer spending.
Here’s a basic outline for a gas station business plan:
Executive Summary
Provide a brief overview of your gas station business, including the business name, location, and ownership structure. Summarize your mission, vision, and key objectives. Highlight the unique features of your gas station that set you apart from competitors. Briefly describe the products and services you’ll be offering. Also, give an overview of the market and the industry.
Business Description
Describe the type of gas station (e.g., convenience store with fuel, standalone fuel station). Explain why you selected the location and your target market, including major roads, highways, and the neighborhood. Provide a brief detail of the property and facilities available to your customers. Discuss the legal structure of your business (sole proprietorship, LLC, corporation, etc.). Also, mention your hours of operation.
Market Analysis
Conduct market research to understand the local demand for fuel and convenience store items. Analyze the competition, including other gas stations in the area. Major oil companies and independent operators are both significant players in the market. Identify your target customers and their needs. Discuss industry trends and potential opportunities.
Organization and Management
Outline the organizational structure of your gas station. Introduce key management team members and their roles. Include brief resumes in the appendix section of your business plan, highlighting relevant experience and expertise.
Services and Products
Detail the types of fuel you will offer (regular, premium, diesel, biofuel, etc.). If applicable, describe any additional services or products, such as a convenience store, car wash, detailing services, etc. Explain any additional services that will set you apart from your competitors.
Marketing and Sales Strategy
Describe your marketing strategy to attract customers to your gas station. Outline any promotions, loyalty programs, or partnerships. Discuss your pricing strategy for fuel and other products/services.
Funding Request (if applicable)
Specify the amount of funding you are seeking (if any) and provide a breakdown of how the funds will be used. Common sources of funding can include small business loans from banks, investor funding, a line of credit, personal savings, etc.
Financial Projections
Include detailed financial projections for the next 3-5 years, including income statements, balance sheets, and cash flow statements, as well as a break-even analysis. This is one of the essential sections of the business plan. Readers will want to know if your business will be profitable.
Operations Plan
Describe the day-to-day operations of your gas station. Outline fuel delivery processes, inventory management, and safety procedures. Discuss staffing requirements and the hiring process.
Licenses and Permits
Ensure you obtain the required permits and licenses you required to open and operate your gas station. These include business licenses, health inspections, food and beverage distribution licenses, environmental permits, building and construction permits, and safety plans.
Risk Analysis
Identify potential risks and challenges your gas station may face. Discuss how you plan to mitigate these risks, such as insurance coverage and safety protocols.
Appendix
Include any additional supporting documents, such as resumes of key team members, market research data, or relevant permits and licenses.
We’ve assisted entrepreneurs similar to yourself in crafting thorough business plans, enabling them to secure business loans and funding from banks and investors. Reach out to us today, and a consultant specializing in business plans will promptly respond to your inquiry.
Image by Photo by Jean-Christophe Gougeon on Unsplash
