South Africa is one of the leading consumers of petrol and diesel and you can be the one selling it. But buying a petrol or filling station is not an easy task. Apart from all the paper works that are involved, a significant amount of capital is also needed as an investment, therefore, it might not be for everyone. If you are not familiar with the petroleum retail industry it is better that you open franchises in other sectors of retail. According to the Department of Energy, South Africa pumps about 11.7 billion litres of petrol every month. If such figures are taken into careful consideration, anyone will be tempted to cash on this opportunity. In order to buy a petrol station, you will first need to understand how we value petrol station. Petrol stations are very tightly regulated in the country therefore, it becomes crucial that you look for petrol stations with maximum value. According to the Department of Energy, petrol stations in the country have an annual turnover of about R220 billion.
Independent filling station:
After you have learnt how to value a fuel station business or how to value a filling station business, you will have to decide if you want to open a franchise or an independent fuel station. This gives you great freedom with chances of acquiring higher margins of profits which is not restricted by any parent company. In order to find a good spot for the station, you will first need to get approved by the government. After that, you will also need to get your hands on the environmental authorisation and land use rights. After this, you can apply for your operating license. This is a daunting process for many people as you will need to jump through several legislative circles to get all your approvals in proper order. If you are confident enough and well versed with the industry choosing the independent route can be a great choice.
If you are a first-time investor in this industry, choosing to go with a franchised brand can be a good option, even though it comes with some restrictions. If you do not know how to value a petrol station business, sticking with the veterans of the industry such as Shell, Engen, Sasol or BP is a great option to get started. The prices are often dictated by the location of the station, the value of the fuel that is pumped and other sources such as convenience stores or vending machines.
In many cases, it is advised to buy an existing franchise operation provided you know how to value a service station business if you are looking to avoid any location or licencing issues. Most of the major retailers have set an extensive vetting process before they opt any owner in their circle. After passing all the tests and analysis put forth you can now start with your thankless job of constantly filling fuels for grumpy old drivers and motorists.