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Building A Better Business
4 Elements That Are Included In A Gas Station Feasibility Study
Dennis Jenkins
If you want to build a new gas station, one of the things you will need to get done before going through with the idea is a gas station feasibility study. The feasibility study is designed to let you know if your idea will be profitable based on the location and market demands. This study is an important piece of information that will help you secure funding to start a gas station. A gas station feasibility study will look at several different elements.
Element #1: Location
The first element that the gas station feasibility study will analyze is the location you have chosen for the gas station. You need to have a location in mind for a feasibility study to be completed, as much of the study will be based on analyzing the potential of the location.
Multiple factors in regard to the location will be considered. The study will examine if the location has the space for a gas station, including the underground space for the tanks where the gas is stored. The study will examine what size and type of gas station you can put at the location.
Element #2: Market Needs
Second, the gas station will study market needs. How many people drive by the location each day? Does the traffic vary by day of the week or time of the year? Are there other gas stations in the area that you would be competing against? How close is the nearest gas station?
You need to be fully aware of what the competition is and what the customer base is. Most people are not going to drive out of their way to stop at a gas station; they are going to stop at a gas station that they encounter as part of their regular driving routine.
Element #3: Potential Sales
Third, the study will look at potential sales and how sales will impact your profit. In order to succeed as a gas station, you generally need to sell other items. The study will examine what type of sales you would need to be profitable.
For example, you could just sell snacks and drinks, or you could sell cigarettes, or you could get a liquor license and sell beer, or you could have a deli that sells food. What you sell, and the nearby competition will impact your potential profits.
Element #4: Costs
Finally, the study will examine the costs that you can expect to pay in the first few years to get your business running. The study will examine the required number of sales to start turning a profit, as well as what type of cash flow you will need to sustain the business.
When it comes to building a gas station, you need to run a feasibility study in order to make sure your idea is reasonable and profitable. A feasibility study will help you attract investors and secure financing for your project.
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