Table of Content

    Do you want to start gas station business?

    Are you thinking of starting a gas station? A gas station was also known as a petrol station is a business that retails diesel, gasoline and various types of motor vehicle lubricants. The increase in the number of automobiles has pushed up the demand for gasoline and diesel which makes the gas station business plan a lucrative venture. The oil and gas industry has in recent times gone through various challenges, but it still remains one of the most lucrative business sectors. Investing in a gas station requires a significant amount of investment, but with a sound business strategy, you can be assured of recovering your entire investment.

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    Executive Summary

    2.1 The Business

    The gas station will be registered under the name Savoy Gas and will be located in Princeton, New Jersey on Exit 2 off the New York Philadelphia interstate highway. This is an excellent location considering the high amount of vehicular traffic that uses the highway on a daily basis. Savoy gas station will be owned and managed by Mike Wall who is a Petroleum Engineer.

    2.2 Management Team

    Mike Wall is an expert Petroleum Engineer who has had a successful career spanning over twenty-five years. Mike has worked for large and reputable international organizations in the oil and gas industry. He has overseen numerous large-scale industry projects that have earned him respect and recognition in the industry.

    2.3 Customer Focus

    Savoy Gas Station aims to offer a fully equipped gas station facility for motorists using the busy Interstate highway. Identifying potential customers is a critical step of starting your own gas station business plan.

    2.4 Business Target

    To succeed in its mandate, the gas station intends to focus on harnessing the latest technologies in the oil and gas industry to offer quality and reliable services to motorists.

    Gas Station Business Plan - 3 Years Profit Forecast

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    Company Summary

    3.1 Company Owner

    Mike Wall is a Petroleum Engineer who has worked for several high profile oil and gas companies across the United States. He is credited for his professionalism and spearheading of numerous technical projects. Mike has worked in various senior capacities in different organizations, as well as participated in numerous local, regional and global petroleum conferences.

    3.2 Aim of Starting the Business

    Starting your own gas station requires a good understanding and knowledge of the oil and gas industry. Having been in the industry for almost three decades, Mike was deeply involved in policy making and technical implementation of gas station projects. Working closely with gas station stakeholders, Mike thought it would be a great idea to transfer his expertise to entrepreneurship.

    3.3 How the Business will be Started

    As a Petroleum Engineer, Mike Wall already has the technical knowhow of the infrastructure and technologies required to start a gas station. However, he has closely worked with financial experts to formulate a sound financial plan to support the business model. The following is key financial information for Savoy Gas station.

    Gas Station Business Plan - Startup cost

    Start-up Expenses  
    Legal $3,000
    Consultants $6,000
    Insurance $12,000
    Rent $14,000
    Research and Development $7,000
    Expensed Equipment $6,000
    Signs $3,500
    Start-up Assets $0
    Cash Required $60,000
    Start-up Inventory $23,000
    Other Current Assets $14,000
    Long-term Assets $10,000
    TOTAL ASSETS $107,000
    Total Requirements $52,000
    START-UP FUNDING $70,000
    Start-up Expenses to Fund $25,000
    Start-up Assets to Fund $20,000
    Assets $12,000
    Non-cash Assets from Start-up $8,000
    Cash Requirements from Start-up $0
    Additional Cash Raised $50,000
    Cash Balance on Starting Date $20,000
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    Capital $0
    Planned Investment $0
    Investor 1 $20,000
    Investor 2 $15,000
    Other $0
    Additional Investment Requirement $0
    Loss at Start-up (Start-up Expenses) $50,000
    TOTAL CAPITAL $70,000
    Total Funding $105,000
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    Services for Customers

    Savoy Gas station is focused on offering a professional service in line with the growing demand for well-equipped gas station facilities in Princeton, New Jersey. Opening a gas station requires great innovation in service delivery. Savoy Gas station will offer the following diversified services.

    • Provision of retail gasoline and diesel
    • Selling automotive related products such as oil and lubricants
    • Automotive repair services i.e. Wheel Balancing, Wheel Alignment and Vulcanizing
    • Selling soft drinks, snacks, groceries and selected household items.

    Marketing Analysis for Gas Station Business


    For Savoy Gas station to be successful, a comprehensive market analysis was carried out to pinpoint areas of focus that will drive business development.

    This gas station business plan sample explains the strategy the gas station intends to follow to meet its targets. Using this strategy, the business intends to get a good amount of revenue considering it lies on a main interstate highway that is used by thousands of commuters on a daily basis. Currently, commuters don’t have a well-equipped shop where they can get adequate food supplies while travelling since the nearest gas station is over 15 miles away.

    Strategic/Operational Business Plan

    5.1 Market Segmentation

    After realizing there are few gas stations around Princeton area off the interstate highway, Savoy Gas has found a market it can effectively explore and provide a critical service for its customers. Based on market research and findings, the business is targeting the following customers for inclusion in its gas station marketing plan. Anyone looking for gasoline and diesel as well as a well-stocked food and drinks outlet is a potential customer for the business.

    Gas Station Business Plan - Market Segmentation

    5.1.1 Automobile Owners

    Automobile engines rely on gasoline and fuel in order to operate efficiently. Savoy Gas station will be located on the main New York to Philadelphia Interstate highway at Princeton, New Jersey. This is an extremely busy highway with thousands of vehicles using the highway on a daily basis. The nearest gas station is about fifteen miles away and Savoy gas station knows it’s located in a strategic location to offer key services to vehicle owners. In addition, the business intends to sell automotive products such as oil and different types of lubricants which are essential products to car owners. Given the scarcity of gas stations in the area, Savoy gas station intends to capitalize on the untapped market by setting up a fully equipped and professionally managed gas station. Motorists are the key customer target included in this gas station business plan template.

    5.1.2 Commuters and Travellers

    Because of the gas station’s strategic location on a main highway, services and products offered will help regular commuters, as well as long distance travellers using the interstate highway. With the wide range of services offered by the gas station, the business intends to rely on the high number of people using the highway to stop and buy food, snacks, drinks and other products at the facility.

    5.1.3 Households

    Princeton, New Jersey has nearby residential households that will benefit a great deal when the gas station is set up. The gas station business plan has focused on stocking a wide variety of foodstuffs, drinks and other products that primarily cater for household consumers. Starting a gas station business plan should include a strategy that incorporates the local community as customers. Local communities living around the gas station are excellent customers because the gas station business plan will get steady revenue from them. Savoy gas station is expected to be nearest shopping facility that stocks basic items.

    5.1.4 Students

    The vicinity of the gas station has many educational facilities including the famous Princeton University. Savoy gas station plans to market its products especially drinks and snacks to students from nearby high schools, colleges and universities.

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Automobile Owners 35% 25,000 27,000 30,000 33,000 36,000 10.00%
    Communters and travellers 30% 22,000 23,000 26,000 29,000 32,000 8.00%
    Households 20% 15,000 18,000 21,000 24,000 27,000 12.00%
    Students 15% 10,000 13,000 16,000 19,000 22,000 7.00%
    Total 100% 80,000 95,000              110,000 125,000 140,000 11.00%

    5.2 Business Target

    Savoy gas station intends to open in an area with a lot of business potential. There is no doubt one of the greatest strengths and advantages outlined in this gas station business plan is the strategic location. The plan is to implement a unique business model that focuses on an exemplary customer service approach and provision of topnotch products and services. Savoy gas station will recover its entire startup capital after three years in operation. There is a projection of annual sales growth of between 20-25%.

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    5.3 Product Pricing

    A good gas station business plan & startup guide should always give guidance on how product pricing will be implemented. In the case of Savoy gas station, prices for various products and services have been determined using a competitive approach. After considering price ranges from nearby gas stations, the business has carefully priced its products.

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    In order to understand how to open a gas station and be successful, there must be a well-defined sales strategy. Mike Wall has cooperated with business startup and strategy gurus to find a creative and smart way of boosting business revenue. The following is a detailed sales strategy for Savoy gas station.

    6.1 Competitive Analysis

    Savoy gas station is located in an excellent location off a busy interstate highway and near a large residential area. This is the only gas station within a fifteen mile radius, the demand for gas station business plan and products is expected to be high.

    6.2 Sales Strategy

    To ensure Savoy gas station captures the intended market, the gas station business model will rely on the following sales strategy to increase customer numbers and boost sales.

    • Create awareness of the gas station by distributing introductory letters to local residents, merchants, transport companies and other interested parties.
    • Conduct a grand opening party of the gas station to capture the attention of residents who are a priority customer segment for Savoy gas station.
    • Advertise the gas station business plan on various media channels i.e. local TV stations, newspapers and popular radio stations.
    • Invest in a search engine-friendly website and market using various social media platforms such as Facebook, Twitter and Instagram.
    • Hire expert marketing firms to formulate innovative sales strategies that will be used on a continuous basis to attract customers.
    • Always meet customer expectations and learn to listen to what customers are saying to better understand their needs.
    • Erect billboards on the highway and within strategic locations in the neighborhood to let potential customers know about the gas station.
    • Come up with an exciting loyalty program to reward regular clients.

    6.3 Sales Forecast

    Savoy gas station is keen to implement its sales strategies to achieve its targets. Below is a summary of sales forecasts for the gas station.

    Gas Station Business Plan - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Retail gasoline and siesel 310,000 350,000 390,000
    Selling automobile products 150,000 170,000 190,000
    Automobile repair services 200,000 220,000 240,000
    Selling soft drinks 300,000 320,000 340,000
    TOTAL UNIT SALES 950,000 1,060,000 1,160,000
    Unit Prices Year 1 Year 2 Year 3
    Retail gasoline and siesel $150.00 $170.00 $190.00
    Selling automobile products $120.00 $140.00 $160.00
    Automobile repair services $110.00 $130.00 $150.00
    Selling soft drinks $100.00 $120.00 $140.00
    Retail gasoline and siesel $300,000 $320,000 $340,000
    Selling automobile products $170,000 $190,000 $210,000
    Automobile repair services $100,000 $120,000 $142,000
    Selling soft drinks $200,000 $220,000 $240,000
    Direct Unit Costs Year 1 Year 2 Year 3
    Retail gasoline and siesel $2.20 $4.20 $5.00
    Selling automobile products $2.00 $3.00 $4.00
    Automobile repair services $1.60 $2.60 $5.00
    Selling soft drinks $3.00 $7.00 $5.00
    Direct Cost of Sales
    Retail gasoline and siesel $120,000 $140,000 $160,000
    Automobile repair services $160,000 $180,000 $190,000
    Selling soft drinks $125,000 $135,000 $150,000
    Comic Books $140,000 $150,000 $165,000
    TOTAL $315,000 $385,000 $465,000

    Personnel Plan

    Savoy gas station has diversified its product range and service niche meaning the business requires staff of different expertise and backgrounds to run the gas station business plan. When determining how much does it cost to start a gas station business, the issue of staff and their salaries has to be considered.

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    7.1 Personnel Plan

    Savoy gas station is owned by Mike Wall, a Petroleum Engineer who will also be the Chief Executive of the gas station. The gas station business plan will employ the following staff to work in various departments.

    • Gas Station Manager
    • Assistant Manager
    • Convenience Store Manager
    • Three Pump Attendants
    • Two Marketing Executives
    • One Cashiers
    • Two Security guards
    • Two Automobile Repair Technicians

    Successful applicants will undergo an intensive training and induction session before the gas station opens to the public.

    7.2 Average Staff Salaries

    Savoy gas station intends to pay its staff the following salaries for the first three years after launching operations.

     Personnel Plan      
    Year 1 Year 2 Year 3
    Gas Station Manager $62,000 $70,000 $75,000
    Store Manager $28,000 $33,000 $36,000
    3 Pump Attendants $75,000 $80,000 $86,000
    2 Sales and Marketing Executive $60,000 $65,000 $70,000
    1 Cashier $24,000 $28,000 $31,000
    2 Security Guards $50,000 $55,000 $64,000
    2 Auto Mobile Repair Technicians $50,000 $55,000 $70,000
    Assitant Manager $35,000 $40,000 $45,000
    Total Salaries $384,000 $426,000 $480,000

    Financial Plan

    Savoy gas station has an elaborate financial plan that will serve as the business roadmap towards attaining success. Opening a gas station cost must be known and other key financial variables that will steer the gas station business plan to prosperity identified. The gas station startup capital will come from Mike’s personal savings as well as a loan to supplement initial capital. Two investors will also contribute to the initial business startup capital. Aside from determining how much does a gas station cost to open, other important financial variables have been captured in the sections below.

    8.1 Important Assumptions

    Savoy gas station’s financial forecasts are based on the assumptions shown below.

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 15.00% 12.00% 10.00%
    Long-term Interest Rate 3.00% 3.00% 3.00%
    Tax Rate 12.00% 14.00% 16.00%
    Other 0 0 0

    8.2 Brake-even Analysis

    Savoy gas station Brake-even Analysis is illustrated in the graph below.

    Gas Station Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 8000
    Monthly Revenue Break-even $25,000
    Average Per-Unit Revenue $320,000.00
    Average Per-Unit Variable Cost $2.50
    Estimated Monthly Fixed Cost $370,000

    8.3 Projected Profit and Loss

    Profit and Loss information for Savoy gas station calculated on a monthly and annual basis is shown below.

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $430,000 $470,000 $520,000
    Direct Cost of Sales $31,000 $41,000 $51,000
    Other $0 $0 $0
    TOTAL COST OF SALES $31,000 $41,000 $51,000
    Gross Margin $305,000 $320,000 $335,000
    Gross Margin % 50.00% 56.00% 63.00%
    Payroll $365,000 $400,000 $425,000
    Sales and Marketing and Other Expenses $5,300 $7,300 $9,500
    Depreciation $3,500 $5,000 $7,000
    Leased Equipment $0 $0 $0
    Utilities $3,000 $5,000 $7,000
    Insurance $1,000 $1,200 $1,700
    Rent $20,000 $25,000 $30,000
    Payroll Taxes $24,000 $27,000 $32,000
    Other $0 $0 $0
    Total Operating Expenses $320,000 $350,000 $380,000
    Profit Before Interest and Taxes $40,000 $50,000 $60,000
    EBITDA $15,000 $20,000 $25,000
    Interest Expense $0 $0 $0
    Taxes Incurred $17,000 $20,000 $23,000
    Net Profit $120,000 $140,000 $150,000
    Net Profit/Sales 40.00% 30.00% 20.00%

    8.3.1 Monthly Profit

    Gas Station Business Plan - PROFIT MONTHLY

    8.3.2 Yearly Profit

    Gas Station Business Plan - PROFIT YEARLY

    8.3.3 Monthly Gross Margin

    Gas Station Business Plan - GROSS MARGIN MONTHLY

    8.3.4 Yearly Gross Margin

    Below is Savoy gas station’s Profit and Loss Analysis.

    Gas Station Business Plan - GROSS MARGIN YEARLY

    8.4 Projected Cash Flow

    The diagram below shows pro forma cash flow, subtotal cash received, subtotal cash from operations, subtotal cash spent on operations and subtotal cash spent.

    Gas Station Business Plan - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $400,000 $430,000 $460,000
    Cash from Receivables $4,000 $9,000 $13,000
    SUBTOTAL CASH FROM OPERATIONS $410,000 $502,000 $530,000
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $410,000 $502,000 $530,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $30,000 $34,000 $38,000
    Bill Payments $25,000 $30,000 $36,000
    SUBTOTAL SPENT ON OPERATIONS $55,000 $64,000 $74,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $55,000 $64,000 $74,000
    Net Cash Flow $22,000 $27,000 $32,000
    Cash Balance $25,000 $30,000 $35,000

    8.5 Projected Balance Sheet

    Depicted below is Savoy gas station Projected Balance Sheet that shows capital, assets, liabilities, long term assets and current liabilities.

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $405,000 $420,000 $470,000
    Accounts Receivable $300,000 $310,000 $330,000
    Inventory $40,000 $40,000 $45,000
    Other Current Assets $11,000 $15,000 $17,000
    TOTAL CURRENT ASSETS $750,000 $775,000 $862,000
    Long-term Assets
    Long-term Assets $5,000 $10,000 $13,000
    Accumulated Depreciation $7,000 $9,000 $11,000
    TOTAL LONG-TERM ASSETS $6,000 $7,000 $9,500
    TOTAL ASSETS $220,000 $240,000 $260,000
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $7,400 $9,000 $12,000
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $23,000 $250,000 $30,000
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $122,000 $142,000 $163,000
    Paid-in Capital $20,000 $23,000 $27,000
    Retained Earnings $16,000 $19,000 $21,000
    Earnings $130,000 $150,000 $170,000
    TOTAL CAPITAL $230,000 $260,000 $290,000
    TOTAL LIABILITIES AND CAPITAL $250,000 $280,000 $310,000
    Net Worth $400,000 $420,000 $505,000

    8.6 Business Ratios

    Business Rations, Business Net Worth and Ratio Analysis for Savoy gas station have been show below.

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 5.00% 21.00% 35.00% 5.00%
    Percent of Total Assets
    Accounts Receivable 4.00% 6.00% 8.00% 8.00%
    Inventory 4.00% 3.00% 2.10% 10.00%
    Other Current Assets 5.00% 4.00% 3.24% 24.00%
    Total Current Assets 120.00% 132.00% 139.00% 40.00%
    Long-term Assets -6.00% -15.00% -20.00% 30.50%
    TOTAL ASSETS 70.00% 70.00% 70.00% 70.00%
    Current Liabilities 6.00% 4.50% 2.60% 17.40%
    Long-term Liabilities 0.00% 0.00% 0.00% 18.40%
    Total Liabilities 6.00% 3.00% 1.40% 34.70%
    NET WORTH 85.00% 100.00% 120.00% 60.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 80.00% 82.00% 86.00% 0.00%
    Selling, General & Administrative Expenses 50.00% 65.00% 72.00% 55.50%
    Advertising Expenses 4.00% 3.20% 2.22% 3.60%
    Profit Before Interest and Taxes 20.00% 22.00% 25.70% 3.10%
    Main Ratios
    Current 14 10 16 0.8
    Quick 30 25 27 1.5
    Total Debt to Total Assets 4.31% 3.00% 2.50% 45.00%
    Pre-tax Return on Net Worth 92.00% 85.00% 92.00% 4.10%
    Pre-tax Return on Assets 78.00% 65.00% 56.00% 8.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 14.00% 17.00% 20.00% N.A.
    Return on Equity 60.00% 52.00% 56.00% N.A.
    Activity Ratios
    Accounts Receivable Turnover 10 5 4.3 N.A.
    Collection Days 80 85 96 N.A.
    Inventory Turnover 14 17 21 N.A.
    Accounts Payable Turnover 8.2 12.9 16 N.A.
    Payment Days 15 15 15 N.A.
    Total Asset Turnover 1.9 0.6 0.4 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.07 -0.04 N.A.
    Current Liab. to Liab. 0 0 0 N.A.
    Liquidity Ratios
    Net Working Capital $270,000 $290,000 $320,000 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.6 0.4 0.3 N.A.
    Current Debt/Total Assets 9% 7% 5% N.A.
    Acid Test 23 27 35 N.A.
    Sales/Net Worth 3.3 3 2.7 N.A.
    Dividend Payout 0 0 0 N.A.

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