Imagine you start a business with much lower risk. Even if the business failed, there would still be something tangible to hold on to.

Businesses that thrive even in bad economy.

One of such businesses is the filling station business, otherwise known as a petrol station business.

Consider this:

You are not marketing any product because consumers already abound.

You would surely make a lot of income doing side businesses like car wash, mechanic workshop, and restaurant.

Big companies like DSTV MTN ,BANKS etc. rent office space from petrol stations. And we haven’t talked about shopping malls, too.

You see, everywhere you turn under the petrol station business, there are opportunities waiting for you to grab them.

But how do you start this lucrative business in Tanzania? Here is a step-by-step guide to starting your business in Tanzania.

1. Study the market:

The first thing you will need to do is to determine the requirement and break down the cost for starting a petrol station business in Tanzania.

What equipment, machinery and skilled labor will be required to start a petrol station business? Who are your potential suppliers and where will you buy fuel? You will also need to know what regulations, certification you will need to comply with.

2. Write a business plan:

This is a comprehensive document that proves on paper that a viable market exists for your petrol station business and that you can sell enough of products and services at your planned petrol station to be profitable and attractive to potential backers. Your petrol station business plan provides the main strategies and tactics you will use to make your dream come true. It also valuable in promoting  your business to bankers, investors and  business communities.

Your petrol station business plan should comprise executive summary, vision and mission statement, objectives, industry trends, market analysis, SWOT analysis, marketing plan, operational plan and financial data and projections.

Read also:      A Sample Business Plan for Starting and Running A Petrol Station in Tanzania

3. Evaluate the marketability of the location:

If you want to build a petrol station, location is a key determinant whether your petrol station business will fail or succeed.

If you make a mistake in location, the business is already a huge mistake.

For your petrol station business to be set up, you need to set up in the best location in your target city. The biggest mistake people make is this: they just purchase land and rush into building petrol station without doing a little homework.

They spend a lot of money, time and effort building a petrol station only to find that the station is selling a little volume from the market in trading areas.

The petrol station business should have the advantage of being in an easily accessible and highly visible location.

No matter how good your marketing strategies are, if you build a petrol station in a non-strategic location, you will make little sales.

If you want to see your petrol selling huge volume of fuel in the marketplace, you need to evaluate the marketability of your area. Before you take the next big step of purchasing or build a petrol station, you should evaluate the marketability of your site.

You need to determine whether there is a market for selling petroleum products as well as who the target customers are. You need to determine who your competitors are and how you will stand out in this competitive business. You need to determine how much volume the station is expected to extract in the trading area.

Before you pour your blood, sweat and tears as well as a lot of time and resources into building a petrol station, you should evaluate your location and do a little homework to know whether your location will sell before you go into the trouble of building petrol station.

You will need to answer “Yes” to this question: “Will a petrol station sell in this area?”

It’s just a matter of finding answer to these questions:

  • What are future development plans in your area? And what are the economic activities that may attract traffic?
  • How much volume of diesel, petrol and kerosene the station is expected to sell in trading areas.
  • Traffic count or estimated quantity of cars and vehicle per days.
  • What are the competitive advantages of nearby petrol stations?
  • What are the land parameters to comply with and the legal requirement?

You should already have much of this information if you have been doing a solid home work. Evaluate your land. If your evaluation reveals that your location will not sell or will not sell well enough, let it go or find a way to make your location profitable.

You can outsource this task to a consultant like us to evaluate the marketability of your area and compile a report that will help you whether your petrol station will sell or not.

4. Put up and raise startup capital:

The petrol station business in Tanzania is a lucrative one that needs a sufficient startup capital. It is likely to cost TZS 225 million to TZS 1 billion. You can get it from investors, borrowing money from banks, friends, or savings.

Not surprisingly, inadequate capital is the leading cause of the petrol station business failure.

5. Launch your company:

You will need licenses from regulatory authorities including EWURA, NEMC, OSHA etc. You will need to purchase equipment such as storage tanks, pumps and start construction of your petrol station.

6. Sell the products:

Now you have all permits and licenses and you have built your petrol station, the next stage is to start marketing your petrol station to make sure you attract enough traffic to reach your sales goals.

7. Keep up with the market:

You need to be abreast on what is going on in retail petrol station business in Tanzania so that you can stay ahead of competitors.

I hope this help.

At Tanzania Petroleum, we are committed to helping people make their entrepreneurship dreams come true in this most valuable oil and gas industry in Tanzania.