Independent and franchise businesses are the two types of South African gas stations, and both are financed in the same way.
To own a new filling station in South Africa, according to the South African Petroleum Retailers Association (SAPRA), three sets of approvals, authorizations and licenses are needed.
- Land use rights for purposes of a filling station
- An environmental authorization
- The site and retail licenses.
Without the constraints of a parent firm, the ownership of this independent fuel station provides for greater independence and perhaps greater profit, but the stress in terms of time and resources makes opening an independent fuel station challenging.
As an alternative, you can acquire a license that provides you access to a company’s secret techniques, trademarks, and information in order to sell goods or render services under the company’s name. Petrol firms Engen and Sasol provide franchises that come with thorough training.
However, such a license does not come without a cost. A Sasol filling station license, for instance, costs in the region of R1 million. Engen in 2019 was selling a relatively small franchise in Gauteng for R2.6 million, excluding stocks and assets. Although this particular form of petrol station business is difficult, it is a far safer option for first-time owners.
Whether you are starting your business independently, or you are making use of a franchise, there are certain processes or steps that you must follow to kick start your petrol business. Below are some of the important tips:
1. A Business Plan
A business plan is essential to every business, as it contains the business goals, the methods of how these goals can be attained and some other essential features.
The business plan gives your business a direction and it also serves as an important tool for financing your business.
Your business plan should contain information about the cost of establishing your business, as this will give you an insight into how much you need in establishing the business. Also included in your estimates are the running costs. You can consider the following options:
- Traditional options such as banks and private funders
- You can collaborate with a group of investors.
The importance of location in a business cannot be overemphasized, and the petrol station business is no exception to this rule. You should site a very busy area that is characterized by a large influx of vehicles.
4. Customer Service
Customer service is also very vital when setting up your petrol station. Is it self-service or the service of a fuel attendant? If you are going for the service of a fuel attendant, the individual needs to have excellent communication skill.
If you are going for self-service instead, you must make sure customer find the technology easy to use. You can also create convenience stores, and this can also increase your revenue. These are some of the services you can offer:
- Car was services
- Quick service restaurants
- Ice-cream shops.