The Ultimate Gamble.

[tec0]

In theory it might be possible for me to start with a new business venture that will involve a lot of funding and a lot of sacrifice on my behalf. Yes it is a franchise but this is not a fast food deal. I am talking about a petrol-station.

As you know cars will always be on the road and they will always need some sort of fuel to get them moving. However this is an expensive venture and calls for significant funding and sacrifice. Now the good thing about all of this is I don’t need a partner. But I am hesitant because of the economic factors surrounding this venture. Then there are massif loans that will demand attention.

Now I want to know of all the possible pitfalls surrounding this venture.

On a technical point of view I don’t like the systems that is being used by some of the petrol stations they are old and some of the systems is not even in English so it will always need professionals and this is already a contract with someone that forcing you to say yes to “job and contract security” Simply because they are the only people that can work on these systems. I don’t like it and I am working around it.

But if there is anything else you can think of that I must consider PLEASE DO TELL. I want to do this with my eyes open! So if you have some experience with this kind of thing please do tell.

[Dave A]

The thing that leaps to mind is cash. Petrol stations deal with a lot of it, which attracts bandits and pilfering.

[Tok-a-lot]

Go one further, "Cash Management" is critical.
There are very specific pitfalls relating to this business.
You have a business with a large turnover, but very small margins, the timing of when and what to spend cash on is critical. If you do not plan it you can land up with a very big overdraft that is difficult to pay back.

Suggesting speaking to a current petrol station owner (successful one of course) to see where the possible pitfalls are.

Further, is this a new petrol station or are you purchasing one out.

Have you already been accepted by the Franchise for running of this business? They have very specific criteria.?

[AmithS]

If you are considering a partner, PM me!

[Jacob Zuma]

Very bad business as far as I am concerned. Very minimal profit. At least the shops make better profit from selling that the gas itself.

[Debbiedle]

A recent retailers report has shown that the forecourt is simply the best retailing spot. I think I saw it on www.theretailer.co.za Are you considering a retail outlet on the forecourt? I agree with all the others on cash management and low margins. As a petrol station only I do not believe that there is much profit, you will most probably need additional product.

[tec0]

Thank you all for your response. And you are right the shops are basically the only way that you make a profit. I actually had a meeting today with an owner and there is much more to this then I originally thought.

The truth is if you get accepted you are still basically working for the franchise. Secondly your equipment maintenance is high. Then there is the cash-problem. Yes money makes you a target and your profits are really low considering the cost that is demanded by the franchise.

I don’t know... If the equipment cost was lower and buy-in wasn’t so heavy I would have continued but I am turning this idea down. Failure is a real possibility here and I will be honest getting the finance is one-thing. NOT being able to repay it is a real eye opener.

I still think there is money in petrol stations but I think the fanatical demands are the real problem here.

Thank all of you for looking out for me. I would have made a horrible mistake.