Petrol Station Site Location: How to Find, Negotiate and Secure the Best Petrol Station Site For Maximum Profit
The popular misconception is that if you have land proximity to a highway or main road, you can build a profitable petrol station.
So, Investors buy land and rush into building petrol stations without data-based evidence as to whether the new site is capable of generating sufficient sales for you to open and stay in business
.
The other issue is that most investors are too busy, and choosing the best petrol station site location for maximum profit involves significant time investment and much research.
The simple truth is that the location you choose for petrol station operations can make or break your venture.
Choosing a poor location is a challenging thing to fix. You can change marketing strategies or your price. But changing your location is quite a different matter.
Whether you want to expand your existing operation by adding a new petrol station or searching for your first location, petrol station location research principles are the same.
Decide the Region to Locate Your Petrol Station
When undertaking the task of finding and opening a new petrol station, it is important that you don’t rush into it. Take your time and do great research, and then do more. Some regions have high fuel sales than others.
There are areas where there is still low petrol station density (quantity of petroleum products sold through retail stations per the number of existing petrol stations.
For example, in the year 2021, the average petrol stations sales density per petrol station was 1,842,089 liters of petrol and diesel, and Dar es Salaam led by having about 3.6 million liters per petrol station and followed by Iringa with about 2.6 million liters per petrol station.
Arusha and Mwanza achieved 2.4 million liters and 2.2 million liters per petrol station, respectively.
The regions that had the lowest sales density were Simiyu and Manyara, with 0.44 million liters and 0.48 million liters per petrol station, respectively.
The regions that had the lowest sales density were Simiyu and Manyara, with 0.44 million liters and 0.48 million liters per petrol station, respectively.
Local Fuel Sales Volume Forecast.
Before purchasing a new site or even building a petrol station, you must produce detailed sales
forecasting figures. You need to know whether the new site can generate sufficient sales for you to open and stay in business.
And you can produce fuel sales figures by taking the traffic count. The feasibility of the petrol station location is determined by checking the traffic count on the road in front of you. Determine the quantity and type of cars and vehicles per day passing in your location.
By collecting data, you will estimate the fuel volume you expect to sell in your trading areas and project the monthly fuel volume your location might sell. The method you can use to calculate sales volume in your trading areas are volume extraction, volume estimation formula method.
Characteristics of Good Site Location
- Traffic flow: The number and type of vehicles passing in your location per day significantly impact your sales volume.
- Competitors: It is crucial to understand who your closest competitors are in your trading areas and identify their strengths and weakness and what volume they are achieving.
- If there are already other petrol stations existing in the same trade area. Identify their financials and what volume they are achieving. This can greatly affect your potential sales.
- Visibility: How easy is it easy for customers to see the location? Motorists can travel to the next petrol station if it is difficult to see your petrol station site. You may achieve maximum visibility if you are located on the far corner of the main road intersecting the secondary road. The optimum distance from the site for a motorist driving at normal speed to have enough time to make a buying decision, slow down his vehicle, and enter the station safely is 250m
- Accessibility: Also, check how easy it is for the motorist/customers to see the location. Barriers such as proximity to junctions, traffic lights, and plot size like small frontage can affect the likelihood of customers beyond those barriers visiting your petrol station.
- Key development close to your site. If there is any expected economic development can increase traffic and therefore achieve good profit. Example of key development includes the construction of bus stops, hospitals, schools, etc.
