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How to start a Gas Station Business in 2022


If you have ever considered How to start a Gas Station in 2022? Then you don’t have to let that be a concern anymore, as we will be providing every detail and information you will need here on how to start a gas station business. Starting a gas station, as much as it is expensive, is also very profitable.

There are millions and millions of cars all over the world, with daily needs of gas, so starting your own gas station business, will no doubt be a lucrative business and one of the best decisions you will ever take. But it must be noted that starting a gas station business, requires some organisational skills and information, hence, in this practical guide, we will be providing the information that is needed, ranging from the cost of starting a gas station, sourcing of funds and products, to running the business, and finally how to scale the business and make it become profitable and successful.

According to research findings, the oil and gas industry soared to over $180 billion in 2018 alone, with millions of licensed drivers, and just over 100,000 gas stations in the United States. It is very evident then that oil and gas is a multi- billion industry, the question is, do you want to seat back and watch things move by? Or you want to find your own slice of the market share?

I know you have had your legs fixed firmly on the brakes of indecision, but now is the time to release your legs from the brakes and drive into this journey, knowing that the information, we will provide here, will serve as a road map and a tour guide, as you embark on this all important breathtaking and interesting journey into the world of running a gas station business.

Before you plunge and immense yourself fully into the business of oil and gas, it is worthy of note that running a gas station, does not necessarily mean the selling of gas only. A gas station also serves as a convenience store, which will enable you to sell the following products or provide additional services also.

  • Snacks
  • Drinks
  • Car washes
  • Air stations
  • Tobacco
  • Alcohol
  • Lottery tickets
  • Pre-made food (e.g. pizza and hot dogs)
  • Grocery staples (e.g. milk, bread and eggs)
  • Basic automotive supplies (e.g. windshield washer fluid and tire pressure gauges)
  • Beer and wine (if permitted by law)

So for the purposes of starting a gas station business, we will be looking at the following steps and processes on how to get started and profit from your gas station business.

  1. Register your business
  2. Plan your business/write your business plan
  3. Obtain permits/licenses/insurance
  4. Open a Business bank account
  5. Source for funding
  6. Find a location/buy a property
  7. Sign a supply contract/buy a franchise
  8. Set up your convenience store/buy inventories
  9. Set up employees payment system
  10. Market your business


  1. Register your Business

The first step in starting any business is to get the business registered. The process of registering a business might be slightly different in some states or countries. But the basic legal structures of businesses are the same across board. As a new business owner, you have the option to register your business, as either a sole proprietor, limited liability partnership or limited liability company. You may decide to seek the advice of a lawyer on the best legal structure for your business, but we will however, recommend that you register a limited liability company for your gas station business, as this legal structure have some protections, when it comes to loss of personal assets, when the company fails.

So you should reach out to the company house of your state or country and get your business registered, by choosing a name that is available for registration and such also that will help you brand your business. Once you are done with the process of registering your company, the next key important step is to register for taxes with the revenue board. The tax registration will be needed for the purposes of remitting taxes, as you will not want a situation where your business will be shut down by the authorities, for the simple reason of your business failing to remit taxes.

Also part of the registration process is the applying for and obtaining of Employers Identification Number (EIN), as you will be hiring staff for your gas station business. Aside the purposes of hiring staff, the EIN will also be needed for the opening of your business bank account, and you might likely need it, if you want to sign a contract with product suppliers.

  1. Plan your business/write your business plan

Starting a business without a business plan, is like having a very beautiful car, without gas inside, the car will be very attractive to behold, but you can’t go anywhere with the car. In other words, writing a business plan for your new business is very instrumental to the success of the business, as through the business plan, you will be able to capture the direction the business will be heading and how you can drive it there, manoeuvring all the ditches along the way.

Writing a detailed business plan, will help you answer the following questions:

  • What will be the startup and ongoing costs?
  • Who will be your target market?
  • How much you are going to charge customers?
  • How you will market your business?
  • What the financial projection or break-even point will be?
  • How you are going to source for funds for the business?

For this purposes of this guide, we will not be focusing on how you can write a business plan, as there are many free business plan templates you can access online to serve as a guide, or you can always hire a professional to help you write your business plan.

We will rather focus here on the idea of the cost that is required to start your gas station business. It must be however noted, that the cost of starting your gas station business will be dependent on the size, location, country or state, and everything else in between.

According to findings by JUX Law Firm, a standard gas station business start- up cost is in the range of $300,000, broken down into the following items:

  • $2,000 for legal fees
  • $2,000 for insurance premiums
  • $3,000 for state permits
  • $5,000 for promotional signage
  • $10,000 for initial inventory
  • $20,000 for setting up a convenience store
  • $100,00 for setting up the gas station
  • $150,000 for purchasing a building

As stated earlier, the above costs could be less or more, it depends on the size and how the gas station is set up. Aside the set up cost, there are also ongoing costs like purchasing of gas for sale and paying of staff wages, utilities bills, permit fees, taxes, etc., till the business eventually becomes sustainable.

  1. Obtain Permits/Licenses/Insurance

The gas station business is a highly regulated business, hence it is not such that can be operated without obtaining the requisite permits, licenses and insurance covers. A good step will be to contact the state chamber of association or relevant trade associations, so as to find out the requirements, with regards to permits and licenses needed to get started with your gas station business.

Since this is a practical guide, which promises to give you massive value, we will be saving you the stress of searching for the types of permits or licenses you will need for your gas station business, the following permits and licenses will therefore be required.

  • Fire inspections permit
  • Tank inspections permit
  • Water discharge permit
  • Sale of alcohol and tobacco license
  • Restaurant codes and regulations permit
  • Motor fuel outlet license
  • Certificate of Occupancy

After securing all the required permits and licenses, the next non-negotiable, is the obtaining of insurance cover for your business. Gas is very flammable and volatile, so also is business, so it will be a very wrong move to leave your business to fate and luck. It is then expected that you get an insurance cover for your business.

There are different types of insurance covers, but the mandatory ones you will need are General Liability Insurance and Workers’ Compensation Insurance. It is advised to reach out to an insurance broker and get proper advice on the specific types of insurance your business will need.

  1. Open a Business bank account

It is always a good advice to separate your personal account from your business account, doing so will help you avoid complications when it comes to remitting of taxes for the business. It is therefore required that you open a business account for your business.

There is no gain-saying the importance of a business bank account, one of such is its usefulness when sourcing for funds for your business, as the business bank account, for instance will give you access to business credit card, which you can use as a form of funding for your business.

There are different types of business bank account, each with their different terms and conditions, it is therefore important that you contact your local bank to find out more information about the different types of business bank account and choose the one that will be best suited for your business. The Employer Identification Number (EIN), which you obtained during the process of your business registration, will be needed at the stage of opening of the business bank account.

  1. Source for funding

We have already highlighted earlier that starting a gas station business is capital intensive, so if you don’t have a pile of cash stashed away or you have not inherited a fortune of a million dollars, it then implies that you will be needing external source of funds to get your gas station business up and running. Aside your personal savings, the followings are other avenues where you can raise funds to start your gas station business.

  • Friends and family: You may be fortunate to have friends and family members who can loan you the money to start your gas station business. But it is always advisable to ask your friends and family for the amount they will be willing to lose, as business does not always go as plan, so that you don’t lose their trust when the business fails. It is also very important that you document every details of the loan.
  • Bank loans: Depending on the country you live in and your credit history, you may qualify for a bank loan if you apply for it. Bank loans however requires that you provide collateral and that you also meet up with other terms and conditions as set up by the bank. So check out with your bank and see if you are eligible for a loan for your gas station business.
  • Equipment loan: The advantage of applying for equipment loan is that it does not require collateral as the equipment will serve as a collateral. You should therefore check out with any bank or lending company that offers equipment loan and apply for one.
  • Crowdfunding: Another available means of raising funds for your gas station business is through crowdfunding platforms like Kick starter, Indiegogo or any of such platforms. Crowdfunding involves getting a large number of investors contribute to your business, enabling them to own a certain percentage of the business. You should check out the platforms to see if their terms and conditions are in line with your business objectives.
  • Angel investors: You may be fortunate to find an angel investor, who is willing to invest in your gas station business. If your business plan is convincing enough, you might just be able to get an angel invest in your business.
  1. Find a location/buy a property

A gas station business is not a business you can operate in the online space, it then implies that you will be needing a physical location to operate from. You should therefore look for a location that will be accessible and as drive through as possible, so motorists can quickly and easily drive in for their gas needs.

Once you find a location that will be very suitable for your gas station, you will then have to either rent or buy the property, depending on the available option. It must be emphasised that the location of the gas station will be a contributing factor to the success of the business, as not all motorist for instance, will be glad to drive into your gas station from the other side of the road, and then have to drive for another 10,000 meters before they can join back the lane they are coming from.

  1. Sign a supply contract/buy a franchise

Buying of gas in bulk for your gas station business is not like the buying of grocery, where you can walk into any supermarket, pick what you want and leave immediately. A gas station business will therefore require that you sign a supply contract with wholesalers of gas, so they will always have to deliver to your gas station.

Another available option is to buy a franchise from already established gas station franchise, so the process of supplying and delivery of the gas will be taken care of. You can reach out to companies like Chevron for instance, and apply for a gas station franchise and get your business up and running in no time.

  1. Set up your convenience store/buy inventories

We have established the fact that a gas station does not only sell gas, but in most cases serves as a convenience store. So the process involved in setting up the convenience store, once you have secured the location for the gas station, is also part of setting up the business. Setting up will involve the fittings and the installations of all equipment and the buying of the inventories needed in the shop.

Running a gas station business, we have ascertained requires some skills, so it is very important to know how to source for the products that will be needed in the store. The store set up, should be such that motorists can easily walk in and get what they want and leave immediately, as it is not a pub, where people come and seat out for a drink.

  1. Set up employees payment system

At this stage, your business is fully ready for operations, it is then time to set up your employee payment system. You should be able to decide how you are going to pay your employees. Will they be paid weekly or monthly? Will their payment be based on commission of sales? Will they be paid cash or with bank cheques or transfers? It is very important that you get an efficient and effective employee payment system in place for your gas station business.

  1. Market your business

This may sound as a broken record, but no business will become profitable unless the business is effectively marketed. Your gas station may be on the road side, where motorist can simply drive in to refill, but there should be a signage indicating that there is a gas station. So the place of marketing in your business cannot be overemphasised.

So the most effective way to promote your gas station is through signage, which must be very visible and attractive to motorists. And once you start getting your first customers, you can keep them coming back by keeping your gas prices low and also keeping a very clean environment.

As part of your initial marketing efforts, you can use website promotions and social media to promote your business, so your customers can learn about your business and what you offer, but more marketing efforts should be focused on signage and displays like pole signs and highway exit signs.

How much profit can a gas station make?

Gas stations can generate millions of dollars in revenue, but much of this is often consumed by ongoing expenses. In an example that JUX Law Firm provides, a gas station that earns $2.4 million annually might have ongoing expenses of $2.1 million, and that doesn’t take into account all the salaries and some other fees the gas station must pay. According to The Nest, gas station owners make around $70,000 each year. (Profits may increase once a station’s loan is paid off.)

Final thoughts

There are several elements and factors that are important in starting and operating a gas station. While there are some levels of risks involved, as it is with every other business, but careful preparation and smart decisions will help minimum the risks and errors in the process of running the business.

We are very confident that, this step-by-step guide has taught you the detailed steps and processes you can take on how to start a gas station on your own, and is guaranteed to set you up for success in the process.

But the question now is, are you willing to take the steps? Can we trust you enough to make the right decision? Will you let go of procrastination and start your gas station business today? The ball is in your court. But always remember, action is cure.

What are your thoughts with regards to this guide and is there any business idea you want us to write about? Let us know in the comment session.

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