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Starting a Gas Station – How Much Does It Cost?

Do you want to know exactly how much it cost to start a gas station? If YES, here is a detailed cost analysis for starting a gas station and raising finance.

A gas station which is also called a petrol station, filling station, fueling station, or service station is a business facility which retails gasoline (petrol), diesel and lubricants for motor vehicles. Gas stations offer one of three types of services to their customers: full service, minimum service or self-service.

Having provided you with a:

  1. Industry Overview
  2. Market Research and Feasibility
  3. Gas Station Business Plan
  4. Gas Station Name ideas
  5. Licenses and Permits
  6. Gas Station Marketing Plan
  7. Cost of Starting a Gas Station
  8. Marketing ideas & Strategies

A full-service gas station has attendants that operate the pumps, often wipe the windshield, and sometimes checks the vehicle’s oil level and tire pressure, then collects payment and perhaps a small tip. A minimum service gas station has attendants that operate the pumps alone. This is often required due to laws in some cities that prohibits customers from operating the pumps themselves.

While in self-service gas stations the customer performs all required service. Instructions informing the customer of filling procedures and cautions are clearly displayed on each pump. Customers are expected to go to the store or go to a booth to give payment to an employee of the station and lastly, we have the unmanned gas station that make use of card-lock (or pay-at-the-pump) system, these gas stations are completely unmanned.

  • Industry Overview

The Gas Station industry over the years has experienced a modest amount of volatility. As a matter of fact, as more Americans acquire automobiles, the total vehicle miles increased and this led to increase in the demand of gasoline. So also, as per capita disposable income continued to increase, some automobile owners would choose to go for premium fuel, which is priced higher than lower-octane fuel.

Just like other industries, the Gas Station industry has also experienced its fair share of ups and downs over the last five years. As a result of strengthening domestic economy and improvement in employment over the last five years, the Gas Station Industry also experienced improvement in performance.

The Gas Station industry is indeed a very large industry and pretty much thriving in all parts of the world. Statistics has it that in the United States of America alone, there are about 10,719 licensed Gas Station businesses responsible for employing about 120,226 employees and the industry rakes in a whooping sum of $106bn annually.

The major breakthrough in the gas station industry came as a result of the increase in automobile ownership which can be attributed to Henry Ford when he started to sell automobiles that the middle class could afford.

In the bid to stay afloat in the highly competitive gas station industry, owners of gas stations now go the extra mile to ensure that they make their facility welcoming and conducive for customers. Gas stations now have vulcanizing services, car wash, convenience stores, coffee bars, snack bars, and cigar lounges within their facility so as to leverage on the opportunities around them to generate more income.

Although the gas station industry can be said to be a competitive industry, but it does not in any way stop entrepreneurs who are creative and financially capable to still make headway in the industry. It is indeed a profitable industry especially when the business is well located. No doubt busy highways and busy cities with growing population are highly suitable for gas stations. The catch is that if there are automobile users in any city, then the city would have need for a gas station.

How Much Does It Cost to Start a Gas Station?

The cost analysis as it relates to starting a standard gas station business in the United States of America, Canada, United Kingdom, and Australia can be said to be almost the same except for few variations. For example, the cost of setting up a full-service state of the art gas station facility with the capacity to carry out automotive services (e.g. repairs, car washes and general parts), supply Nonautomotive fuel, retailing automotive fuels (e.g. diesel fuel and gasoline), retailing cooking gas, selling automotive-related goods, providing automotive-repair services, providing wheel alignment, wheel balancing and vulcanizing services, retailing of groceries and soft drinks et al, are same especially when bench – marked against the US Dollars.

For instance, if you live in the United Kingdom and you decided to import gasoline dispensing pumps and other gas station equipment from Japan, you will pay same price for these machines no matter the part of the world you live in, the only variation will be the cost of shipping the goods to your destination.

Other factors that may be slightly different in terms of costing when it comes to starting a standard gas station business in any of the countries listed above are cost for supply of automotive fuels (e.g. diesel fuel and gasoline), cost of labor, cost of transportation and logistics, local tax, insurance policies, business incorporation fee and rent/leasing amongst other factors.

Over and above, when it comes to starting a medium scale gas station company, you should be prepared to either rent or lease a standard and centralized facility along a major road or expressway with good human and vehicular traffic; this is going to be one of the areas where you are expected to spend the bulk of your start–up capital.

How Much Does It Cost to Start a Gas Station in the United States?

These are the key expenses you are expected to make when starting a medium scale but standard gas station company business in the United States of America;

  • The total fee for registering the business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the gas station in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard facility in a good and centralized location along a major road or expressway – $250,000
  • The cost for remodeling the gas station facility and construction of underground gasoline tanks/reservoirs – $400,000.
  • Other start-up expenses including stationery ($500), phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory (supply of nonautomotive fuel, automotive fuels (e.g. diesel fuel and gasoline), cooking gas, and automotive-related goods) and for fuel dispensing machines and equipment (automobile repair tools, vulcanizing tools, and wheel alignment tools) – $550,000
  • The cost for the purchase of gasoline tanker – $45,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost for the purchase of furniture and gadgets (Telephone, printing machines, computers, tables and chairs et al) – $14,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $8,000
  • Miscellaneous: $10,000

You will need an estimate of two million, five hundred thousand dollars ($2.5 million) to successfully set up a medium scale but standard gas station company in the United States of America. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with more than one outlet in key locations within same city.

Starting a small scale but standard gas station company business that can only retail automotive fuels (e.g. diesel fuel and gasoline), retailing cooking gas, and selling automotive-related goods et al in just one location in the United States of America will cost about four hundred and fifty thousand dollars to five hundred thousand dollars (b to $500,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

When it comes to starting a standard and large scale gas station with several outlets in key cities in the United States of America, a gas station with the intention of selling franchise and also offering complimentary services, then you should look towards budgeting well over seven million, five hundred thousand dollars ($7.5 million).

How Much Does It Cost to Start a Gas Station in the UK?

These are the key expenses you are expected to make when starting a medium scale but standard gas station business in the United Kingdom;

  • In the United Kingdom, Online applications are usually registered within 24 hours and cost £12 (paid by debit or credit card or PayPal). Postal applications take 8 to 10 days and cost £40 (paid by check made out to ‘Companies House’). There’s a same day service costing £100.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – £13,300
  • Marketing promotion expenses for the grand opening of the gas station in the amount of £3,500 and as well as flyer printing (2,000 flyers at £0.04 per copy) for the total amount of £3,580.
  • The cost for hiring business consultant (including writing business plan) – £2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – £28,400.
  • The cost for leasing a standard facility in a good and centralized location along a major road or expressway – £235,000.
  • The cost for the gas station facility and construction of underground gasoline tanks/reservoirs- £380,000.
  • Other start-up expenses including stationery (£300), phone and utility (gas, sewer, water and electric) deposits (£1,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – £60,000
  • The cost for start-up inventory and (supply of nonautomotive fuel, automotive fuels (e.g. diesel fuel and gasoline), cooking gas, and automotive-related goods) and for fuel dispensing machines and equipment (automobile repair tools, vulcanizing tools, and wheel alignment tools)- £505,500
  • The cost for the purchase of gasoline tanker – £42,000
  • The cost for store equipment (cash register, security, ventilation, signage) – £9,500
  • The cost of purchase and installation of CCTVs: £4,500
  • The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): £2,500.
  • The cost for building and hosting a website: £600
  • The cost for opening party – £6,300
  • Miscellaneous: £8,000

You will need an estimate of two million, three hundred British Pounds Sterling (£2.3 million) to successfully set up a medium scale but standard gas station company in the United Kingdom. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with more than one outlet in key locations within same city.

Starting a small scale but standard gas station company business that can only retail automotive fuels (e.g. diesel fuel and gasoline), retailing cooking gas, and selling automotive-related goods et al in just one location in the United Kingdom will cost about two hundred and five thousand to four hundred and eighty thousand British Pounds Sterling (£205,000 to £4800,000).

When it comes to starting a standard and large-scale gas station company with several outlets in key cities in the United States of America, a gas station company with the intention of selling franchise and also offering complimentary services, then you should look towards budgeting well over seven million British Pounds Sterling (£7 million).

How Much Does It Cost to Start a Gas Station in Canada?

These are the key expenses you are expected to make when starting a medium scale but standard gas station business in Canada;

  • For federal incorporation of business in Canada, the cost to incorporate is $200 if filed online through Corporations Canada’s online Filing Centre ($250 if filed through other means).
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the gas station in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard facility in a good and centralized location along a major road or expressway – $250,000.
  • The cost for remodeling the gas station facility and construction of underground gasoline tanks/reservoirs – $400,000.
  • Other start-up expenses including stationery ($500) and phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory (supply of nonautomotive fuel, automotive fuels (e.g. diesel fuel and gasoline), cooking gas, and automotive-related goods) and for fuel dispensing machines and equipment (automobile repair tools, vulcanizing tools, and wheel alignment tools) – $550,000
  • The cost for the purchase of gasoline tanker – $45,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost for the purchase of furniture and gadgets (Telephone, printing machines, computers, tables and chairs et al) – $14,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $8,000
  • Miscellaneous: $10,000

You will need an estimate of two million, five hundred thousand dollars ($2.5 millionCAD) to successfully set up a medium scale but standard gas station company in Canada. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with more than one outlet in key locations within same city.

Starting a small scale but standard gas station company business that can only retail automotive fuels (e.g. diesel fuel and gasoline), retailing cooking gas, and selling automotive-related goods et al in just one location in Canada will cost about four hundred and fifty thousand dollars to five hundred thousand dollars ($250,000CAD to $500,000CAD). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

When it comes to starting a standard and large scale gas station with several outlets in key cities in Canada, a gas station with the intention of selling franchise and also offering complimentary services, then you should look towards budgeting well over seven million, five hundred thousand dollars ($7.5 millionCAD).

How Much Does It Cost to Start a Gas Station in Australia?

These are the key expenses you are expected to make when starting a medium scale but standard gas station business in Australia;

  • In Australia, the fees to register your business name with ASIC include: $34 for 1 year. $80 for 3 years
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the gas station in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard facility in good and centralize location along a major road or expressway – $250,000
  • The cost for remodeling the gas station facility and construction of underground gasoline tanks/reservoirs – $400,000.
  • Other start-up expenses including stationery ($500), phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory (supply of nonautomotive fuel, automotive fuels (e.g. diesel fuel and gasoline), cooking gas, and automotive-related goods) and for fuel dispensing machines and equipment (automobile repair tools, vulcanizing tools, and wheel alignment tools) – $550,000
  • The cost for the purchase of gasoline tanker – $45,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost for the purchase of furniture and gadgets (Telephone, printing machines, computers, tables and chairs et al) – $14,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $8,000
  • Miscellaneous: $10,000

You will need an estimate of two million, five hundred thousand dollars (AUD$2.5 million) to successfully set up a medium scale but standard gas station company in Australia. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and a business with more than one outlet in key locations within same city.

Starting a small scale but standard gas station company business that can only retail automotive fuels (e.g. diesel fuel and gasoline), retailing cooking gas, and selling automotive-related goods et al in just one location in Australia will cost about four hundred and fifty thousand dollars to five hundred thousand dollars (AUD$450,000 to AUD$500,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

When it comes to starting a standard and large scale gas station with several outlets in key cities in Australia, a gas station with the intention of selling franchise and also offering complimentary services, then you should look towards budgeting well over seven million, five hundred thousand dollars (AUD$7.5 million).

Estimating Start-Up Cost for Gas Station Business Based on the following factors;

  • Staff/Manpower

When it comes to starting a standard gas station company business on a large scale, you would need the services of the following professionals;

  • Chief Executive Officer
  • Gas Station Manager
  • Accountant/Cashier
  • Human Resource and Admin Manager
  • Pump Attendant
  • Convenience Store, Coffee Café, Snacks Bar, Cigar Lounge Manager
  • Vulcanizing Services, Wheel Balancing, Wheel Alignment and Automobile Repairs and Maintenance Manager
  • Carwash Manager
  • Security Guard

Can a Gas Station be Bootstrapped on a Lean Budget Right from Home?

If you a looking for a small scale business that you can successfully bootstrap on lean budget right from your home, then you should not consider starting a gas station business. Because of the nature in terms of product, size and cost of the machines and equipment involved in starting and operating a gas station company, it is obvious that it cannot be bootstrapped on a lean budget from home.

As a matter of fact, the gasoline and other products that are sold in gas station can be highly volatile hence you will not get permit from the required authority to build a gas station within your residential apartment.

How Much Does It Cost to Buy a Gas Station Franchise?

In the United States of America, the Average Cost of Purchasing a Gas Station Franchise is: Annual costs $250,000 to operate and you need around $160,000 annually to buy and stock products. Examples of 3 Well – Known Gas Station Franchising Companies in the United States of America are;

  • Shell Gas Station Franchise
  • Chevron Gas Station Franchise
  • Exxon Gas Station Franchise

In the United Kingdom, the Average Cost of Purchasing a Gas Station Franchise is: Annual costs £220,000 to operate and you need around £150,000 annually to buy and stock products. Examples of 3 Well – Known Gas Station Franchising Companies in the United Kingdom are;

  • BP Connect Franchise / BP Petrol Station Franchise UK
  • Shell United Kingdom – Shell in UK
  • Esso Petrol Station Franchise UK

In Canada, the Average Cost of Purchasing a Gas Station Franchise is: Annual costs $250,000 to operate and you need around $160,000 annually to buy and stock products.. Examples of 3 Well – Known Gas Station Franchising Companies in Canada are;

  • Husky Gas Station Franchise – Canada
  • Shell Gas Station Franchise
  • Esso Gas Station Franchise Canada

In Australia, the Average Cost of Purchasing a Gas Station Franchise is: Annual costs $250,000 to operate and you need around $160,000 annually to buy and stock products. Examples of 3 Well – Known Gas Station Franchising Companies in Australia are;

  • Puma Energy service station
  • BP Franchise Australia
  • Caltex Service Station Franchise
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