It takes substantial time and resources to build a petrol station? So why you should risk the investment without knowing whether your target location is going to be profitable?
Today, many investors and entrepreneurs spend substantial time and resources on project planning and execution, while they pay little attention to assess the viability of their petrol station project location. This leads to invest in the wrong places or make a decision that may not help them win in this competitive market.
Whether you are building a petrol station from the scratch or you are buying a petrol station business that is already running in the market, location is a key determinant of the profitability of your petrol station business
Choosing the Right Petrol location
If you want to build a petrol station, location is a key determinant of 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 profitable, you need to set up in the best location in your target city.
People make the biggest mistake: they purchase land and rush into building petrol station without conducting a viability assessment of their location. 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. To reduce risk, it advisable to always hire a consultant to conduct a viability assessment of your location.
Choosing the right petrol station depends on your target city. But there are some factor to look into to determine the profitability of your location whether your location is worth investing
Here are some factor you are going to have to look into to determine the profitability of your location
1. Traffic count and flow.
In terms of traffic flow, you assess the quantity and type of vehicles passing on your site. You will also need to observe which way the traffic goes and what times of the day.
Find out also if there are alternative routes that draw traffic away from the site you are reviewing and think about the effect this might have upon the overall value of your building. The traffic count would help you determine what fuel volume your proposed location has the potential to achieve per month in your trading area.
2. Accessibility and Visibility
How is easy for motorists and consumer to enter and leave the sites? How is your site accessible from the main road? You have to ensure that your site allows access via roadways and via the frontage. Your location must have easy in and out access. Also is important for your site to be located at an optimum distance that allows motorists driving at normal speed to have enough time to make buying decisions, slow down their vehicle, and enter your station safely. If there is a problem with access and visibility, determine what you can do to improve access to the site.
3. Demographic of the community
Demographic information tells you about the physical and economic nature of your community. You are going to know whether the demographic of the community in your target area will increase the value of your petrol station business. For example, if you walk around and visit several petrol stations in your area, you are bound to find that they offer complementary services. For example, some petrol stations may have a mini supermarket, restaurant, car wash, ATM services, etc. But not all areas need such additional services. So demographic information would tell you whether there would be a demand for these complimentary services so as you can consider it too.
The last thing that you are going to want to assess about your property is competition. Who are your closet competitors are, what strengths and weaknesses of their brands? You should assess determine what fuel volume are they selling. You should also observe the layout of their petrol station facility. Does it easy to navigate? Does it look good from the outside? Does it look clean and safe? Does it have enough parking areas?
The petrol station business should have the advantage of being in an easily accessible and obvious location. You should assess how much fuel volume you expect to sell in this area per month. Once you answer this question it can help you develop strategies that might help your new petrol station win in the market.
Here’s why you need a feasibility report for your petrol station:
· It shows you the best location to set up a petrol station
· It will help you to decide whether or not to go ahead with the proposed site build
· It gives you the estimated fuel sale volume per month and profit potential for your petrol station in the trading area.
· It also helps you provide with all necessary costs and expenses so you don’t overspend on anything during set up.
· It also helps you know the number and size of facilities and equipment you should install at your petrol station (Like the size of storage tanks, number of pumps, whether you should have a car wash, supermarket or not)
· It shows you the right estimates and type of vehicles and cars passing in your location.
· It can also stop you from making a wrong investment in your petrol station
· It can help you know your competitors, their strength and weakness. And develop strategies that give you competitive advantages.
· It shows you the right estimates and type of vehicles and cars passing in your location..