How To Invest In Gasoline Station Philippines?

Petron, which supplies about half of the country’s gasoline, has a unique approach to attracting potential investors, which players may find comparable to how entrepreneurship is taught in games like Diner Dash: you can start your gas station with just a few pumps and expand as demand grows. Getting your own Petron gas station can be more appealing than ever before, thanks to a very flexible expansion option available to franchisees.

To start a Petron franchise, you’ll need your own land on which to build your gas station, as well as a total investment cost of P1 million to P2.5 million, excluding a P100,000 cash bond. Expect your riches to flow like black gold once you’ve finished.

What is the cost of purchasing a gas station?

As previously stated, opening a gas station entails a significant financial investment. To cover the following initial expenditures, you should budget at least $300,000: Purchasing the property.

Is it wise to invest in a petrol station?

Gas stations are a popular investment due to their lucrative nature and the fact that they give owners with a stable yet simple business to handle.

In the Philippines, how much does a gas station make?

Hi. I’m opening a petrol station, and this will be my first experience with a more “organized” business operation. more structured in the sense that I have other family members who are also investors.

I’ve been running a transportation company on the side, but only unofficially. This time, I’ll have to do the forecasting, ROI, and other things myself.

As a result, I’d want to seek your advice on how to proceed. I’m working on a business plan and would appreciate it if you could send me a template and a sample ROI calculation. Thank you so much, and more power to you!

Hi. Are you planning to franchise the petrol station? If that’s the case, I’m sure your fuel supplier or franchiser can advise you on how to run the business, particularly the data you’ll need to track and evaluate.

When it comes to calculating ROI, though, it’s always a good idea to start with a simple and broad approach.

To begin, make a list of the startup costs as well as the anticipated monthly (overhead) expenses. Provide as much information as possible. Consider the costs of licensing and obtaining a business permit. Include the leasehold upgrades and other start-up fees as well. For the monthly expenses, add in the cost of depreciation and other minor miscellaneous charges.

Second, survey the area where you intend to set up shop. Calculate how many consumers you can realistically serve in a day. This will provide you with an estimate of your gross daily sales as well as your net daily revenue (profit)

As an example, let’s say your startup costs are $2 million and your monthly expenses are P500,000. Then there are some basic projections for your sales and earnings:

  • Estimated daily net income (based on earning P20 for every P100 spent on gas): P20,000
  • Monthly net income estimate: P100,000 (20,000 x 30 days less monthly expenses of 500,000)

To calculate your predicted ROI, simply divide your start-up capital by your estimated monthly net income. So, in our case, 2,000,000 divided by P100,000 = 20 months.

In terms of the template, I recommend doing a search on the internet because there are a lot of them available. However, you are not needed to use a template when completing these. You’ll be OK as long as it’s detailed and easy to comprehend.

Sari-Sari Store Business

Hi. By chance, I came across your website, and it prompted me to take stock of the sari-sari store that my mother has requested me to handle.

It’s been with our family since 1982 and has managed to survive and support our needs, but there hasn’t been any growth in the firm, in my perspective. Since 1982, the store has essentially remained the same.

I have no managerial experience but am ready to learn. Given that I am now working, this would be a fantastic challenge.

Please offer your financial management advice for a sari-sari shop. I’m not sure what to do about inventory, how to plot expenses versus profit, and other such things. Thank you very much.

Hi. If the sari-sari business has lasted this long, it must be doing something well, in my perspective. So the first thing I’d suggest is that you inquire about your parents’ company management.

I learned from experience (we used to operate a sari-sari store) that the most important thing a sari-sari store owner should remember is to never take anything from the inventory for personal use.

It’s so easy to reach for a bottle of soft drink every now and then when you’re thirsty. If you ever find yourself in this situation, make sure you pay for it.

I’m not sure how big your sari-sari business is or how much space you have, but I believe that turning it into a mini-grocery is the next logical step for expansion.

The inventory of a grocery store is strictly controlled. This implies that everything should be in order. All of the things you sell come in a variety of brands and sizes.

You can start your inventory count in your next purchases to avoid disrupting your existing operations. Using a computer spreadsheet, such as Excel, or an inventory program.

Make a list of everything you purchase. This entails keeping track of the stock group, the item, the size, the brand, the purchase price, the supplier, the amount purchased, the purchase date, and the selling price.

SM Supermarket | 5 cans | Dec 1 | P60 | Canned goods | Corned beef | 200gms | Purefoods | P50 |

You should also keep an itemized account of everything that is purchased in your sari-sari store on a daily basis. In this scenario, a point-of-sale tool can help, but doing it in Excel is also a smart option.

After a few months of doing this, you’ll have a good notion of how much the sari-sari store is making (net income).

But, more significantly, you’ll learn which goods sell quickly and others take longer to sell. You can do a lot with this information to figure out which things to buy. Hold off buying the non-moving items and stock up on the sellable ones.

Meanwhile, all you have to do for the profit analysis is add up the net income from your daily sales. Because you’re keeping track of all the products you’ve purchased and know how much you paid for them, you’ll be able to calculate the item’s net profit.

Let’s imagine your total net revenue in a month is P20,000. Then deduct the store’s monthly expenses, such as employee salaries, utility bills, rent, and so on. And you’ll find out how much profit you made in a month.

Knowing this number can help you figure out if the sari-sari business has the potential to grow into a mini-market. Also, make plans for the future of the company.

Finally, while you’re about it, a survey of adjacent sari-sari stores would be beneficial so you can keep track of the competition’s prices and change yours accordingly.

I hope that this advise will assist you in starting or expanding your family’s sari-sari store.

This concludes today’s Reader Mail. I hope you were able to learn anything useful from it.

Please keep in mind that my responses are completely based on my professional experience and personal experiences. As a result, any corrections, suggestions, or new information from my readers are appreciated.

So, if you have one, please don’t hesitate to leave a comment below. Thanks!

How do I get Petron to open?

Fill out our Dealer Application Form as the initial step. The next step is to draft a letter of intent and submit it together with additional supporting documentation. Submit your application to our offices after all of your documentation are completed.

What is the cost of a Caltex franchise in the Philippines?

  • Approximately P5 million to P7 million is necessary for facilities and equipment.
  • Lot Size/Layout Requirements: A minimum design layout of 1,200 sqm is required.
  • Lot Lease Agreement Requirements: The lease agreement must be for a minimum of 10 years.
  • Building & Structure Requirements: The Franchisee must build these in accordance with Caltex’s standard design.
  • Equipment requirements: These must only be obtained from Caltex-approved dealers.
  • Caltex will provide all branding and signage materials.

Is it profitable to own a gas station?

Gas stations and the convenience stores that serve them are currently among the most profitable enterprises in the United States. Over 100,000 gas stations/convenience stores operate across the country, generating over $400 billion in annual revenue.

Is it true that petrol stations make a lot of money?

  • Franchisees who pay royalties to name-brand gas refineries (ranging from 3% to 14%) in order to use their branding
  • Independent operators that own and operate generic “no-name” gas stations and purchase gas on the open market.

Because selling gas isn’t very profitable, most large oil firms have backed out of the retail market.

Gas stations make an average net margin of just 1.4 percent on their fuel, according to IBISWorld.

This is significantly lower than the 7.7% average across all industries, and it places it below other typically low-margin firms such as grocery stores (2.5%) and car dealerships (2.5%). (3.2 percent ).

Let’s take a step back and look at a typical gasoline supply chain to see why.

The profit pipeline

Gasoline starts off as crude oil, which is mostly sourced in the United States, in places like Texas and North Dakota.

  • Freight vehicles transport it to gas stations, where it is stored in underground barrels with a capacity of 20,000 gallons.

Let’s say you pay $4.09 for a gallon of gas at your neighborhood station (the national average, as of April 13, 2022).

Typically, gas stations only get a fraction of the price shown on the sign. After subtracting overhead costs such as labor, utilities, insurance, and credit card processing fees, the average profit per gallon is $0.03 to $0.07.

However, assuming daily sales of 4000 gallons at $0.05 a gallon, your typical station’s gas revenue might only be $200-300 per day.

Those coin-operated air machines you see at most stations, on the other hand, can make $300 to $500 per month in profit even after paying the corporations that lease them out.

For starters, petrol stations are well aware that the bulk of customers make their purchasing decisions entirely on the basis of pricing.

They have an incentive to keep those statistics as consistent as possible on the board.

Even if they didn’t, they’d be kept in check by local competition: The finest locations, such as high-traffic freeway exits and on-ramps, are frequently crowded with competing stations.

In actuality, they despise it just as much as you do, owing to the fact that competition forces them to compete on price. Catch-22:

  • When wholesale gas prices rise, many station owners would rather maintain their pricing and lose money than lose customers to competition.
  • Many petrol stations are wary about cutting their prices as wholesale costs fall, fearing a price war.

The real money is made inside the store

According to the National Association of Convenience Stores, 44 percent of gas station consumers enter the store. And one out of every three of them indulges in some sort of indulgence.

The merchandise sold inside these businesses Doritos, sunglasses, lottery tickets, and energy drinks contribute for only 30% of the average gas station’s revenue but generate 70% of the profit.

Card readers are now standard on most contemporary pumps, eliminating the need to walk inside to pay. The average time spent at a gas station by a consumer is now only 2-3 minutes.

Convenience stores also have some of the highest crime rates of any industry in the United States, with average yearly robbery losses of $761 per location.

The gas station of tomorrow

Gas stations in the United States sold 135 billion gallons of gasoline last year, enough to fill 204 thousand Olympic-size swimming pools.

In 1995, there were 195k of them in the United States; currently, there are only 115k.

  • Long-term, electric vehicles (EVs) and self-driving automobiles represent a danger to petroleum sales.
  • Urban real estate (NYC, DC, San Francisco, Boston) can be put to more profitable uses, such as condos or office projects.

Many stations have taken the pricey decision to install electric vehicle charging stations, which may cost up to $100,000 each.

Given that EVs presently make up of automobiles on the road, it’s a difficult cost to justify. However, the sector is rapidly growing: 4 out of 10 consumers say they’d consider buying an electric vehicle as their next vehicle, and stand-alone EV charging stations are springing up all over the country to serve them.

In the long run, EV-agnostic stations particularly smaller enterprises that can’t afford the upfront cost risk being left behind.

But, if everything else fails, gas stations have a hidden financial weapon in the form of those hypnotic rotating hot dog machines.

  • What’s the deal with the 9/10ths of a penny? When gas was only $0.15 per gallon almost a century ago, the government imposed a fraction of a penny gas tax. It’s no longer relevant, but station owners keep it since it makes prices appear slightly lower.
  • Explosions aren’t limited to the restroom. Each year, 4.2k flames erupt at gas stations around the country, resulting in $30 million in property damage. Cars are to blame for the majority of them. Hot dog machines are to blame for a handful of them.
  • When it comes to restrooms, a beautiful toilet can boost a gas station’s sales. According to one survey, 22.6 percent of customers who use the restroom “regularly” make an impulse purchase on their way out.
  • KFC got its origins in a gas station. Colonel (Harland) Sanders created his first fried chicken plate while operating a gas station in North Corbin, Kentucky, in the 1930s.