Most people view gas stations as a simple type of business that is needed by the general public. Many people do not understand the complexities and thoughts that go into running a successful gas station business. You may think that since people and businesses need gas to fuel their vehicles, a gas station will succeed simply because the public relies on fossil fuel and charging stations for their cars. However, it is nowhere near that simple.
For a gas station to survive and thrive, it needs to do more than open and allow people to buy gas. This is especially important due to the fact that the margins on gas for a gas station are amazingly low. Gas stations typically only receive a fraction of the price listed on the sign. Most stations only make $0.03 to $0.07 per gallon. Needless to say, owners need to sell a lot of gas to stay in business.
If a gas station owner wants to succeed, they need to have some clear business goals to shoot for. Those goals should be closely aligned with where they want their business to be in a year, two years, or 10 years down the line. In this article, we will look at some key goals for a gas station business.
Improve Inventory Management
Improving inventory management is an essential operational goal for gas station owners because it directly impacts profitability and customer satisfaction. Efficient inventory management ensures that the most popular and profitable items are always in stock. Since gas station stores are small, people may not want to spend as much per sale if the item they want isn’t there. They may just get their gas and go. Having items out of stock increases the likelihood of lost sales.
By closely monitoring inventory levels, gas station owners can make informed decisions about which items to reorder. They will also know what quantities to order. If done right, this will minimize waste and overstocking, especially for perishable goods.
Effective inventory control also helps in identifying slow-moving items. When you’re on top of your inventory, you can adjust your product mix. Hopefully, you’ll be able to find and stock what customers prefer.
Additionally, streamlined inventory management can lead to reduced operational costs. A good practice for gas station owners is to learn how to optimize ordering processes and storage.
Once this trickles down to an inventory that is under control owners will see more benefits. They may even be able to negotiate better terms with suppliers due to more accurate and predictable ordering. All these factors contribute to a more efficient operation, higher customer satisfaction due to product availability, and ultimately improved profitability for the gas station.
Increase Drive-By Traffic
Gas stations have been around for more than a century. The world’s first purpose-built gas station was constructed in St. Louis, Missouri, in 1905. With more and more businesses offering online and delivery options, it is safe to say that gas stations will never truly be able to take advantage of these technological advances anytime soon.
This is why one of the major goals of a gas station is to improve foot traffic from customers driving by. The first step is to get people to stop in. From there, gas station owners need to entice customers to make additional purchases.
By now, everyone expects gas stations to offer snacks, beverages, or car accessories. So getting people to stop at a particular gas station to get any of these is going to be difficult since they can be purchased anywhere. Instead, gas stations need to have other things that they are known for in order to get people to stop in.
Here are some other ways to increase drive-by traffic:
- Offering clean restrooms-Being known for having a clean environment including clean restrooms can sway a traveler to stop in. Larger chains maintain this reputation by having standards throughout their locations but smaller gas stations and individual owners will need to advertise this perk somewhere in their signage. There is an app called GasBuddy actually lets users rate gas station restrooms by their cleanliness.
- Quick service food options-Beyond snacks, gas stations can offer wings, pizza slices, and other hot foods. Bigger stations can offer a variety of sandwiches and side items. Wawa stations are known for having in-house food options which drive a substantial amount of foot traffic.
- Food truck partnership-For gas stations that cannot provide freshly made food, they may want to partner with a local food truck. The food truck can use the parking lot to serve customers and travelers. People who love to eat at food trucks may stop to grab a meal as well as items from the gas station store.
- A safe-looking environment-An underrated attractive feature is a safe-looking facility. Having a well-lit and open space that is visible from the road will make some people feel safer when pumping gas, especially at night.
Successfully attracting drive-by traffic can boost immediate sales. Also, it can help in building a regular customer base. Satisfied customers are likely to return and even recommend the gas station to others.
Like with any retail business, layout is important. For gas stations with little space, the way the store and pumps are laid out can impact whether or not your customers decide to return to the station the next time they need anything.
A well-organized, clean, and inviting layout makes it easier for customers to find what they need quickly, potentially encouraging impulse buys. Effective layout design includes clear signage and strategic placement of popular items. But it is more than just that. The layout should also create a flow that guides customers through the store. This way, they are exposed to a wide range of products.
An optimized layout can maximize the use of available space. If this is done right, you can offer a broader range of products and services. This not only improves the aesthetic appeal of the gas station but also enhances operational efficiency. With a great layout, it will make it easier for staff to restock and maintain the premises. The good thing about this is that if everything is maintained well, it will indirectly improve your inventory management which we already listed as one of the other important goals.
In the competitive gas station market, a well-thought-out layout can be a differentiating factor, making the station more memorable and preferable to customers.
Install EV Stations
Installing Electric Vehicle (EV) charging stations may not be an optional perk within the next 50 years. There is a shift towards electric and hybrid vehicles that gas station owners should not ignore. As the adoption of electric vehicles continues to rise, the demand for convenient and accessible charging infrastructure is also increasing. By installing EV charging stations, gas stations can attract a new segment of customers who own electric vehicles. In an already competitive industry such as gas stations, tapping into a market that is expected to expand significantly in the coming years is a good idea.
Offering EV charging services not only diversifies the revenue streams but also positions the gas station as a forward-thinking and environmentally conscious business. This can enhance the station’s appeal, especially among a younger, more eco-friendly customer demographic.
Another underrated benefit is the incentives from governments. These incentives often come in the form of tax credits, rebates, or grants, aimed at reducing the initial investment required to install these charging stations. For example, in the United States, under specific programs, gas station owners can receive tax credits covering a substantial portion of the installation costs.
On top of that, gas station owners can leverage the time it takes to charge an EV. While customers are waiting, owners need to encourage customers to use their convenience store or other on-site services. This can hugely increase sales in those areas.
As the automotive industry evolves, having EV charging capabilities may become a necessity rather than an option. Early adoption of this technology can provide a competitive edge and ensure the business is future-proofed against shifts in consumer vehicle preferences.
Open Multiple Locations
In a previous section, I mentioned that larger gas station chains have the advantage of keeping their offerings consistent. I used the example of gas stations that are known for having clean bathrooms. As a single location, you may have a great reputation for fair prices or clean restrooms. However, if your customers are on the other side of town, they will find another station to get their needs met.
That is why a goal for a gas station should be to open multiple locations. This goal should be looked at as something more than just an expansion for financial reasons. Instead, this can also help with branding.
If your first location is known for great prices and other offerings, when your regular customers who visit the gas station near their home see another location near their workplace, they will be more likely to stop in. You second location can also offer something your first location lacks like a carwash.
This goal is an important growth goal for this type of business. However, expanding to another location is not without its challenges. It is also important that the second location offers the same quality and service as the first. When done right, having multiple locations can help gas station owners take more market share from their local competitors and nationwide brands.