Petrol Station Business

[mjroyal]

Hi,

I am close to doing a deal with Shell to run 6 petrol stations, although I have plenty of retail management experience I have none in this field.

Any advise/Pit Falls I need to be looking out for ?

Any one with experience of working alongside a co sutch as Shell/BP/Esso etc.

Any help would be great, thanks

 

[MarkMandel]

I have worked on petrol systems a long time and seen quite a few mistakes.

I would say

1. Safety first, this is a very dangerous product so make sure you get the right safety training and its repeat for all your staff.
2. Regulations, petrol sale is regulated business you need to understand things like pump dispensing checks (i.e. does it actually dispense the amount it says) and other regulations like how to check customers are dispensing fuel into proper containers or using phones.
3. Processes, There are a few key processes that you must get right every day, petrol deliveries, pricing, stock reconciliation (making sure your fuel is not leaking into the ground, so reconcile, by tank, delivery in v sales out), etc. Make sure you pay attention to these as if you get them wrong, like diesel in your unleaded tank things can go wrong very badly, unlike any other retail.
4. From what I saw in the business they change franchises often if not performing. Make sure you know and understand all available reports from their systems so you know how to drive your business.

I am sure your big fuel company will train you in these but I would just say how important they are. Other than that its a very tough business.

Good Luck!

 

[Rhodes100]

Things are a bit different these days with Shell, once upon a time you could make money from running a service station however over the last 20 years they have made it harder and harder.

Firstly you had to start to run a second site to make money now it seems they want you to run a cluster of 6 sites.

A client of mine told me that all Oil Companies were "thieves, cheats and liars", I wonder whether it is still the same!

I am not sure what the current deal is that they are offering, normally however if you have staff problems, theft etc, and or do not control your stock shrinkage and costs you are in risk of failure.

The main criteria in making money is ensuring that the targets you are given are achievable, as if they are not then you have no chance of success.

I wouldn't want to run 6 businesses/shops and have the hassle of staff not turning up for an evening or morning shift in more than one site - would you?

 

[johnnyflapjack]

Hi There

Good luck with your new venture and if you do need your safety requirements sorted out the Hans Global are doing a spectacular deal on a Health and Safety Package at the moment.

Mike

 

[Cobby]

Hi,

I am close to doing a deal with Shell to run 6 petrol stations, although I have plenty of retail management experience I have none in this field.

Any advise/Pit Falls I need to be looking out for ?

Any one with experience of working alongside a co sutch as Shell/BP/Esso etc.

Any help would be great, thanks

I know two people who currently work on this basis (one of whom is getting out of it as we speak) and they hate it and completely regret it.

They get almost no support from Shell, staffing is next to impossible (as they run 24-hour sites, often in the middle of nowhere, and the staff that will work those hours for minimum wage usually aren't staff you can rely on) and the money/stress ratio is nothing like worthwhile. Drive-offs are still quite common and the very occasional hold-up has left at least one member of staff traumatised and their manager embroiled in sick leave paperwork. And these are relatively rural sites.

One of the sites is being 'upgraded' which apparently only came about because a fault in a tank 'may' have caused a leak into the soil. The whole site is shut down while everything is replaced and rebuilt but he still has to pay the rent on it, and he had to lay off all the staff because Shell won't pay for them to be kept on until reopening, which all in all should be about 6 months.

Obviously if you think the sites are worth it, and you've accounted for every variation in the projected figures and think it still looks good, go for it. Have a drive around the country, ask some other Shell managers what they think of the system.

I rather suspect you'll find yourself regretting it 6-8 months down the line, but who knows.

 

[captaincloser]

No idea if this is going to be helpful but for its worth I was in the USA a few months ago and whilst visiting someone overheard a sales pitch in his office along the lines of :

"You are going to do what ? Hey buddy thats about as dumb as buying a gas station these days".

I didn't understand it at the time and still don't but it stuck in my mind.

 

[JohnSmith34]

Some ideas for number of customers:

Most of my forecourts have around 750 to 900 customers a day, with one of my larger ones achieving over 1000 a day. However it is important to remember that growth needs to be considered. In most of my petrol station’s first years, they mostly achieved 600 to 700 a day, with different levels of exponential growth for the different stations in the following years.

 

[JohnSmith34]

Also, when doing finances you need to remember this:

There is no point doing your finances with revenue and cost. That is not how it works with petrol. The prices change daily and are created using a markup on the cost. You need to work out how many litres you are going to sell and then roughly how much profit you will make on each litre.

That is obvious, but you'll be surprised by how many people forget that.

 

[billmccallum1957]

JohSmith34 you might find it useful to look at the date on posts, this one is from 2011.