Gas StationBusiness Plan

Business Plan Articles

If you are starting a gas station, it is likely that you will require a business plan at some point. The experts at Pro Business Plans have extensive experience preparing plans for investment and strategy. This article provides information on what is included in a gas station business plan and how it is structured.

Gas Station Business Plan

There are several things to consider when starting a new gas station that will influence its profitability. Regardless if you plan is being used for investors, banks, or internal strategy the plan should properly analyze these factors in order to provide a clear picture of the potential risks and opportunities associated with the gas station.Therefore, it is important to provide information regarding each of these aspects in a comprehensive business model that is applied to forming drivers regarding the financial model

Business Model

The business model for a gas station can be relatively straightforward, but the main key success factors are the location and operations process. If the plan is for investment, financiers will analyze the individuals responsible for managing the facility as well as where it is located. Because many gas stations are branded franchises appealing to a price sensitive market, any positioning from branding or modifying the value proposition will be fruitless. Therefore, it is important to demonstrate reliable management at an optimum location in order to build a good investment case.


Management Team

The management of a gas station at the shift level may not be critical to its success, but the ability of a franchise owner to take responsibility of the brand can be vital. A good management team will have a prior background owning or serving as the general manager for a gas station. If this is not possible, it may be advantageous to show at least a relevant management background to demonstrate the capability of managing an independent franchise location.


Location

Selecting an optimal location is a critical success factor that will be scrupulously analyzed by any investor. The location selected must be convenient, such as along a major highway, along with being in a major driving community. For instance, a gas station in New York City may not be as profitable as one in an area where a much larger percentage of the population drives and rent prices for commercial real estate are much cheaper. These points must be analyzed both when selecting a location and forming the justification for the one chosen.


Marketing Plan

The marketing strategy of a gas station largely depends on the flexibility of the brand and franchise agreement. Due to the very thin margins of a gas station and the price sensitive market, most of the marketing is done on-site as a way to increase sales from the appended convenience store. Loyalty programs are also implemented in an effort to persuade consumers to purchase more from the convenience store while their vehicle is refueling. The marketing strategies for these are largely at the corporate or franchise level, gas stations are provided marketing materials or instructions for operating the loyalty program. New brands or smaller independent locations may analyze how they can replicate such promotional strategies and loyalty tactics used at larger franchises.


Customer Loyalty

The customer loyalty for a gas station will depend upon the location of operations. If it is an independently owned private brand, customer loyalty may only be advantageous if the gas station serves the local market. If it is instead located along a highway targeting tourists, for instance, then it may not be as applicable. Nonetheless, customer loyalty is critical to the success of a gas station because it provides consumers with an incentive to give preference to something that would otherwise be considered a commodity.


Cross-Selling Strategies

When a gas station performs marketing, it will often attempt to cross-sell products or additional services. For instance, such may include a car wash whereas others will append a convenience store or even a restaurant in some cases. Having captive customers re-filling their automobiles provides an opportunity to sell additional products while they wait. This means applying a combination of display advertisements, special discounts, and testing the effectiveness of ad copy at the refilling station.


Financial Projections

The financial forecasts for a gas station are driven based upon several revenue sources, each with a varying profit margin. The profits from gasoline sales are relatively fixed, unless the gas station is owned by a supplier. However, the percentage that visit the convenience store or opt for additional services may vary from store to store. Such assumptions can also be driven by the costs associated with an individual location, such as build-out modification requirements and loan amortization.


Revenue Projections

The revenue projections for a gas station are best prepared based on the prior operating performance of the existing gas station. If the station is new and being constructed from scratch, then an analysis of the demand experienced by gas stations in comparable locations is analyzed. Such drivers into the revenue projections include the population, volume of traffic on a daily basis, as well as the demographics of the area to determine their probability of purchasing additional products/services.


Budget Forecasts

The budget forecasting for a gas station will depend upon several variables. For instance, some gas stations may be purchased using a bank loan and will use the financing to continue existing operations. Other gas stations may be built from scratch, or acquire existing buildings and modify them for the purpose of making them more functional. The budgeting should be done based upon your unique circumstances and always be as conservative as possible regarding the amount requested, as to not encounter liquidity issues.


What is Included in Our Custom Gas Station Business Plan?


  • Marketing Plan
  • SWOT Analysis
  • Competitive Analysis
  • Profitability Analysis
  • Personnel Plan
  • Organizational Chart
  • Company Valuation
  • Executive Summary
  • Company Description
  • Keys to Success
  • Three Year Objectives
  • Product or Service Description
  • Market Research
  • Fundraising Support
  • 12 Month & 3 Year Profit & Loss
  • 3 Year Balance Sheet
  • 12 Month & 3 Year Sales Forecast
  • 12 Month & 3 Year Cash Flows
  • Break-Even Analysis
  • Financial Ratio Analysis
  • Management Team

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