The fuel retail industry is one of the most resilient industries in the country that has found itself capable of delivering some healthy margins of profit even in times of slow economic growth. James Noble from Absa Business Banking noted the industry to be “recession-proof”. This makes business opportunities in the field to be immense who are thinking of more avenues for wealth creation. With over 4600 fuel stations across the nation pumping over 70 thousand gallons of fuel every month, the business does sure look lucrative, and might be wondering how to find an active retail fuel business for sale in order to get started right away. Well, hold on to your horses as we take a look at how you can open a petrol station franchise in South Africa.
Petrol Station Franchise
In some cases, if the retailer owns the lands and the assets, the fuel supplier agrees to a simple supply agreement, but this is not applicable in most of the cases around the country.
Setting up your service station’s property can cost you an average of R15 million on a general site, though prices for setting up your property on a highway or a high valued area will cost you somewhere in the neighborhood of R100 million. Business opportunities’ figure is exclusive of your investment in several franchise opportunities.
The fuel retail industry can be quite a specialized sector as the operating and profit margins are hugely dependent on several external factors. It is not as simple as finding a small business for sale, buying it, and start printing money. One of the most common mistakes ordinary people make is that they think as the prices of fuel go up so do the profits of the retailers. This is however not the case as the margins are determined and regulated by the Department of Energy.
Other factors that might affect your milage is when you are looking for franchises for sale. Oil companies can be extremely critical of who they are offering franchises to. You will have to meet several criteria to be even considered for the role.
As the prices of fuel tend to fluctuate, so do the margins of profit. Retailers will need to employ several other sources of alternative profits that can help in the contribution of increasing margins. The most common practice for retailers is to open convenience stores on their premises. This becomes particularly useful as more and more people are starting to work for longer hours.
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Opening a Petrol Station: Click Here
Opening a Petrol Station Franchise in South Africa: Click Here