Convenience Store Gas Station Business Plan

Allensburg is a small town with a population of 3,400. It is located on rural Highway 310, 30 miles south of Kent and 34 miles north of Willard. Highway 310 connects these two cities, both of which have universities and a combined population of 200,000 residents. This highway serves as the main road through town and is used daily by thousands of commuters. These commuters support various roadside businesses that sell flowers, produce, and bakery products.

Currently, commuters in the Allensburg area have to leave the highway and drive three miles into town to get gas. However, Robert Cole, the owner of Allensburg’s Food and Gas, has the opportunity to rent a plot of land just off the Allensburg exit of Highway 310.

Allensburg’s Food and Gas aims to offer commuters gas, organic produce, and a deli. Commuters can conveniently stop on their way to work for gas and a sandwich, and on their way home to pick up something for dinner.

The objective of this plan is to provide guidance for this start-up business, including researching and defining markets, strategies, mission, and financials. This will help prepare the owner to successfully run Allensburg’s Food and Gas.

1.1 Objectives:

– Capture an increasing share of commuter traffic passing through Allensburg.

– Offer customers superior products at an affordable price.

– Provide unparalleled customer service.

Convenience Store Gas Station Business Plan Example

The mission of Allensburg’s Food and Gas is to offer competitive gas prices and great food to commuters on Highway 310. The company aims to generate a healthy profit for its owners and provide a rewarding work environment for its employees.

Keys to success:

– Good quality products at competitive prices.

– Excellent customer service to promote customer loyalty.

– A strategically located store that attracts commuters.

Company Summary:

Allensburg’s Food and Gas is a new convenience store and gas station in Allensburg. The owner, Robert Cole, has seven years of experience in managing gas stations. The store will cater to the daily commuters in the town, offering the best gas prices and quality food products.

Company Ownership:

Allensburg’s Food and Gas is wholly owned by Robert Cole.

Start-up Summary:

Robert Cole will invest $60,000 in Allensburg’s Food and Gas. He aims to secure an SBA loan of $150,000 to cover the remaining start-up costs.

The chart and table below illustrate the projected initial start-up costs for Allensburg’s Food and Gas.

Convenience Store Gas Station Business Plan Example

Start-up

Requirements

Start-up Expenses

Legal – $1,000

Insurance – $1,000

Rent – $1,500

State Permits – $3,000

Gas Station Setup – $70,000

Store Setup – $20,000

Promotional Sign – $5,000

Total Start-up Expenses – $101,500

Start-up Assets

Cash Required – $18,500

Start-up Inventory – $10,000

Other Current Assets – $0

Long-term Assets – $80,000

Total Assets – $108,500

Total Requirements – $210,000

Start-up Funding

Start-up Expenses to Fund – $101,500

Start-up Assets to Fund – $108,500

Total Funding Required – $210,000

Assets

Non-cash Assets from Start-up – $90,000

Cash Requirements from Start-up – $18,500

Additional Cash Raised – $0

Cash Balance on Starting Date – $18,500

Total Assets – $108,500

Liabilities and Capital

Liabilities

Current Borrowing – $0

Long-term Liabilities – $150,000

Accounts Payable (Outstanding Bills) – $0

Other Current Liabilities (interest-free) – $0

Total Liabilities – $150,000

Capital

Planned Investment

Robert Cole – $60,000

Other – $0

Additional Investment Requirement – $0

Total Planned Investment – $60,000

Loss at Start-up (Start-up Expenses) – ($101,500)

Total Capital – ($41,500)

Total Capital and Liabilities – $108,500

Total Funding – $210,000

Products

Allensburg’s Food and Gas sells:

– Gasoline and diesel fuel

– Oil, de-icer, car accessories, etc.

– Deli items

– Drinks

– Bakery goods

– Organic produce

Market Analysis Summary

Located on rural Highway 310, Allensburg is 30 miles south of Kent and 34 miles north of Willard. Highway 310 connects Kent and Willard, both with universities and a cumulative population of 200,000 residents. The highway is the main road through town and is used daily by thousands of commuters between the two cities. The closest gas station in either direction is over 20 miles away.

These commuters currently have no convenient shop to buy food on Highway 310; more importantly, 80% of Highway 310 commuters fit the demographic profile of customers of upscale organic/natural food stores:

– Age: 25 – 45 years

– Gender: 60% women

– Average income: $40,000+

– Education: college graduate

– Employment: professionals in business and education

4.1 Market Segmentation

The target customers of Allensburg’s Food and Gas are the commuters that use Highway 310.

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

Commuters 10% 5,500 6,050 6,655 7,321 8,053 10.00%

Other 0% 0 0 0 0 0 0.00%

Total 10.00% 5,500 6,050 6,655 7,321 8,053 10.00%

Strategy and Implementation Summary

Allensburg’s Food and Gas will focus on becoming a routine stop for commuter traffic on Highway 310, not just for those who need gas, but also for those who want a healthy, tasty snack or need to pick up some small grocery items. Allensburg’s Food and Gas aims to be more than a gas station to its customers; it will be a friendly place for tired commuters.

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5.1 Competitive Edge

The competitive edge for Allensburg’s Food and Gas is as follows:

– Location: Allensburg’s Food and Gas is located on Highway 310. The closest competitor is three miles into the town of Allensburg.

– Quality Deli and Organic Produce: Commuters will be able to pick up lunch or buy something to take home while buying gas. Allensburg’s Food and Gas will be regarded as an invaluable time saver in their day.

5.2 Sales Strategy

Allensburg’s Food and Gas will keep gas prices competitive with other stations within a fifty-mile radius to attract commuters. Customers who purchase more than $10 worth of gas will receive a 15% coupon for purchases in the store during the first month of operation to encourage purchases and introduce them to the concept of buying quality organic foods at the gas station.

5.2.1 Sales Forecast

To maintain competitive gas prices, the cost to the consumer will never exceed 15% of wholesale cost. Allensburg’s Food and Gas will focus on increasing food sales to meet total sales forecast goals.

The following is the sales forecast for three years.

Convenience Store Gas Station Business Plan Example

Convenience Store Gas Station Business Plan Example

Sales Forecast:

Year 1 Year 2 Year 3

Sales:

Gasoline $623,000 $660,000 $700,000

Food, Drinks,

and Produce $185,000 $198,000 $210,000

Total Sales $808,000 $858,000 $910,000

Direct Cost of Sales:

Year 1 Year 2 Year 3

Gasoline $544,000 $570,000 $582,000

Food, Drinks,

and Produce $37,200 $41,000 $44,500

Subtotal Direct Cost of Sales $581,200 $611,000 $626,500

Management Summary:

Robert Cole, owner of Allensburg’s Food and Gas, has seven years of experience managing gas stations/convenience stores. From 1993 to 1996, Robert managed Higgins Texaco, one of the largest gas station/convenience stores in Willard, where he supervised a staff of seven. In 1997, he became manager of Barger Chevron, near Highway 310.

Personnel Plan:

The Allensburg Food and Gas will have a staff of five:

– Manager

– Store/deli staff (2)

– Gas attendants (2)

Year 1 Year 2 Year 3

Robert Cole $33,600 $37,000 $40,000

Store/Deli Staff $42,000 $44,000 $46,000

Gas Attendants $42,000 $44,000 $46,000

Total People 5 5 5

Total Payroll $117,600 $125,000 $132,000

Financial Plan:

The following is the financial plan for Allensburg’s Food and Gas.

Break-even Analysis:

The monthly break-even point is approximately $49,500.

Convenience Store Gas Station Business Plan Example

Break-even Analysis

Monthly Revenue Break-even: $49,539

Assumptions:

– Average Percent Variable Cost: 72%

– Estimated Monthly Fixed Cost: $13,905

7.2 Projected Profit and Loss

The table and charts below show the projected profit and loss for three years.

Convenience Store Gas Station Business Plan Example

Convenience Store Gas Station Business Plan Example

Pro Forma Profit and Loss:

Sales:

Year 1: $808,000

Year 2: $858,000

Year 3: $910,000

Direct Cost of Sales:

Year 1: $581,200

Year 2: $611,000

Year 3: $626,500

Other Production Expenses:

Year 1: $0

Year 2: $0

Year 3: $0

Total Cost of Sales:

Year 1: $581,200

Year 2: $611,000

Year 3: $626,500

Gross Margin:

Year 1: $226,800

Year 2: $247,000

Year 3: $283,500

Gross Margin %:

Year 1: 28.07%

Year 2: 28.79%

Year 3: 31.15%

Expenses:

Payroll:

Year 1: $117,600

Year 2: $125,000

Year 3: $132,000

Sales and Marketing and Other Expenses:

Year 1: $0

Year 2: $0

Year 3: $0

Depreciation:

Year 1: $11,424

Year 2: $11,424

Year 3: $11,424

Leased Equipment:

Year 1: $0

Year 2: $0

Year 3: $0

Utilities:

Year 1: $3,600

Year 2: $3,600

Year 3: $3,600

Insurance:

Year 1: $3,600

Year 2: $3,600

Year 3: $3,600

Rent:

Year 1: $13,000

Year 2: $13,000

Year 3: $13,000

Payroll Taxes:

Year 1: $17,640

Year 2: $18,750

Year 3: $19,800

Other:

Year 1: $0

Year 2: $0

Year 3: $0

Total Operating Expenses:

Year 1: $166,864

Year 2: $175,374

Year 3: $183,424

Profit Before Interest and Taxes:

Year 1: $59,936

Year 2: $71,626

Year 3: $100,076

EBITDA:

Year 1: $71,360

Year 2: $83,050

Year 3: $111,500

Interest Expense:

Year 1: $13,375

Year 2: $10,500

Year 3: $7,500

Taxes Incurred:

Year 1: $13,968

Year 2: $18,338

Year 3: $27,773

Net Profit:

Year 1: $32,593

Year 2: $42,788

Year 3: $64,803

Net Profit/Sales:

Year 1: 4.03%

Year 2: 4.99%

Year 3: 7.12%

7.3 Projected Cash Flow:

The following table and chart highlight the projected cash flow for three years.

Convenience Store Gas Station Business Plan Example

Pro Forma Cash Flow:

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $808,000 $858,000 $910,000
Subtotal Cash from Operations $808,000 $858,000 $910,000
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $808,000 $858,000 $910,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $117,600 $125,000 $132,000
Bill Payments $637,424 $681,157 $701,506
Subtotal Spent on Operations $755,024 $806,157 $833,506
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $30,000 $30,000 $30,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $785,024 $836,157 $863,506
Net Cash Flow $22,976 $21,843 $46,494
Cash Balance $41,476 $63,319 $109,813
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Projected Balance Sheet:

7.4 Projected Balance Sheet

The following table and chart highlight the projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $41,476 $63,319 $109,813
Inventory $56,540 $59,439 $60,947
Other Current Assets $0 $0 $0
Total Current Assets $98,016 $122,758 $170,760
Long-term Assets
Long-term Assets $80,000 $80,000 $80,000
Accumulated Depreciation $11,424 $22,848 $34,272
Total Long-term Assets $68,576 $57,152 $45,728
Total Assets $166,592 $179,910 $216,488
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $55,500 $56,029 $57,804
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Plan Month: 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate: 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Long-term Interest Rate: 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Tax Rate: 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%

Other: 0 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss:

Sales: $50,000 $52,000 $62,000 $70,000 $71,000 $71,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000

Direct Cost of Sales: $37,000 $37,500 $44,900 $51,000 $51,200 $51,200 $51,400 $51,400 $51,400 $51,400 $51,400 $51,400 $51,400

Other Production Expenses: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales: $37,000 $37,500 $44,900 $51,000 $51,200 $51,200 $51,400 $51,400 $51,400 $51,400 $51,400 $51,400 $51,400

Gross Margin: $13,000 $14,500 $17,100 $19,000 $19,800 $19,800 $20,600 $20,600 $20,600 $20,600 $20,600 $20,600 $20,600

Gross Margin %: 26.00% 27.88% 27.58% 27.14% 27.89% 27.89% 28.61% 28.61% 28.61% 28.61% 28.61% 28.61% 28.61%

Expenses:

Payroll: $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800

Sales and Marketing and Other Expenses: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Depreciation: $952 $952 $952 $952 $952 $952 $952 $952 $952 $952 $952 $952 $952

Leased Equipment: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Utilities: $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

Insurance: $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

Rent: $0 $0 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300

Payroll Taxes: 15% $1,470 $1,470 $1,470 $1,470 $1,470 $1,470 $1,470 $1,470 $1,470 $1,470 $1,470 $1,470 $1,470

Other: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses: $12,822 $12,822 $14,122 $14,122 $14,122 $14,122 $14,122 $14,122 $14,122 $14,

Pro Forma Cash Flow

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Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received
Cash from Operations
Cash Sales $50,000 $52,000 $62,000 $70,000 $71,000 $71,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000
Subtotal Cash from Operations $50,000 $52,000 $62,000 $70,000 $71,000 $71,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $50,000 $52,000 $62,000 $70,000 $71,000 $71,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800 $9,800
Bill Payments $2,356 $69,710 $42,025 $58,309 $63,158 $57,288 $57,082 $57,698 $57,471 $57,457 $57,442 $57,427
Subtotal Spent on Operations $12,156 $79,510 $51,825 $68,109 $72,958 $67,088 $66,882 $67,498 $67,271 $67,257 $67,242 $67,227
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $14,656 $82,010 $54,325 $70,609 $75,458 $69,588 $69,382 $69,998 $69,771 $69,757 $69,742 $69,727
Net Cash Flow $35,344 ($30,010) $7,675 ($609) ($4,458) $1,412 $2,618 $2,002 $2,229 $2,243 $2,258 $2,273
Cash Balance $53,844 $23,834 $31,509 $30,900 $26,442 $27,855 $30,472 $32,474 $34,703 $36,946 $39,204 $41,476

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