Cost of owning/running a new service station? - Page 2

**GasoLane** · 02-08-2017, 10:17 PM

Quote:

Originally Posted by danzvtil

An old site would need a 2-300k removal of old tanks and decontamination before you lift a finger. Current environmental standards would cost huuuge dollars, old sites have to now comply with vapor emissions, adding $ to aging infrastructure.
I've seen a few new stations now with above ground tanks, which is mandatory if you have a high water table or are near the beach, problem is, it doubles the space needed, all big $$$$.

My post above about the new unknown brand site is being built on the old Shell depot grounds, which have been vacant for about 15 years.

GASWAGON · 03-08-2017, 10:28 AM

Quote:

Originally Posted by danzvtil

An old site would need a 2-300k removal of old tanks and decontamination before you lift a finger. Current environmental standards would cost huuuge dollars, old sites have to now comply with vapor emissions, adding $ to aging infrastructure.
I've seen a few new stations now with above ground tanks, which is mandatory if you have a high water table or are near the beach, problem is, it doubles the space needed, all big $$$$.

No low water and beach hours away.

I reckon the site is big enough for on ground tanks out the back and LPG tanks and a smallish convenience store at the front.

Total waste of a good location and the i believe the town could really benefit from it with 3 car workshops and a new mower shop and a garden supplies that would all benefit fill up there plus all locals from town further out with only a pub and milk bar.

Oh well i'll leave it up to United.

steve.zissou · 03-08-2017, 10:34 AM

i worked at a franchise shell about 15 years ago.

the issue then was that as the station operator you have to buy fuel - say 10,000 litres. Now you might buy at 1.20 but as you know the prices fluctuate as do the purchase prices. They way shell did it was that they would sort of un-officially help the opperator price match the other servo's - other wise based on the buy price you would be buying it for more than the other guys were selling it at some times.

So the owner was always fighting shell for price support - they would give him an extra 4 or 6 cents per litre because competitors were selling cheap.

I dont know how independents work, but i imagine the same situation. you buy 10,000 litres of fuel at 1.20 and later that week the price drops for every one else (say to 1.10) then your stuck with fuel that cost you more than the other guys are selling at retail.

it can be quite tricky and you cant just buy 100,000 litres when the price drops as you have to store it some where.

the other part that kills all small business is that you have a lot of regalory over head.

the big guys can have some one specifically to look after wages (compliance), making sure ohs is correct, making sure the site complies with all the regs, insurance, ....... the list goes on.

as a single operator you have to do all that yourself (this is how the big guys like it - they love more red tape - its the best barrier to entry there is)

but i think thee is an opportunity. if you have a big enough site - have a really good quality coffee/cafe (not just a crappy servo one) a car wash, a mechanics, express oil change/tyre change

simon varley · 04-08-2017, 06:58 PM

I'd go with that. No fuel but a 1-stop quality detail/service place

**GasoLane** · 05-08-2017, 10:10 AM

Quote:

Originally Posted by steve.zissou

have a really good quality coffee/cafe (not just a crappy servo one) a car wash, a mechanics, express oil change/tyre change

I'm old enough to remember when this was the norm, and the reason they were called 'service' stations.

chevypower · 05-08-2017, 05:16 PM

Are you nuts? Your business plan is to fork out millions of dollars for high-cost, low-margin product that doesn't have a good long term outlook, in an an industry that you are obviously unfamiliar with (dominated by multi-billion dollar corporations), in a small town with low demand; and to keep it "simple," you are deliberately keeping your revenue streams to an absolute minimum on the high-cost low-margin product? With all due respect, you need to forget this idea completely before you bankrupt yourself and/or an investor.

Feathers · 05-08-2017, 07:40 PM

Our local servo just underwent a renovation to comply with VR2, and that cost just over a million, so you'd be looking at a lot more than that.
The old tanks would definitely need to be lined or replaced, which is the bulk of where the cost is.

Sep 97 EL XR8 · 05-08-2017, 08:19 PM

Don't do it. My parents owned a service station, sold it 4 years ago. On average you are lucky to make 2 cents per litre on fuel. The only way they made money was their restaurant. As the servo was 1 hour out of adelaide. All the trucks stopped and had a meal, probably 40% filled up.

The tanks are not replaced with new owners, so to start a new servo, they will need to be replaced. If it has not been used for 30yrs, their will be contaminated soil. BIG MONEY!

You need to have a draw card to get people to stop, that's why the servos are getting bigger, with maccas, KFC, etc

The big oil companies are ruthless, they will take your money, and your banks money. Their supply agreements are very one sided.

You need to think of the opening hours the servo will be open, the penalty rates add up, as you need to be open the majority of the time to get frequency of people dropping in. If your shut when their need fuel, they will always go to the servo they know will be open.

Your choice, but you would get better satisfaction giving your money away to strangers, as you will get a tanks and a smile, where as the banks and oil company's won't even smile when they take your money

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Doreturnonfoot · 05-08-2017, 09:08 PM

If it is a good site look at redeveloping for other alternatives i.e. Car wash/commercial uses, but you will still need some good coin or a backer to do anything.

Sep 97 EL XR8 · 05-08-2017, 09:11 PM

Quote:

Originally Posted by Doreturnonfoot

If it is a good site look at redeveloping for other alternatives i.e. Car wash/commercial uses, but you will still need some good coin or a backer to do anything.

Make sure the tanks have been removed, and there is no contamination.

A car wash is a good idea

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GASWAGON · 07-08-2017, 10:19 AM

Went for a drive to Noojee yesterday and at Neerim South they only one servo with the shop closed and 3 pumps, 91 and Diesel only with an electronic auto pay machine.

Payed for $30 but car only took $25.50 to fill and it was pouring rain so just left expecting to be charged the full $30.

Checked bank account last night and they actually re imbursed me the $4.50 that i did'nt use.

Also saw about 10 Fords in a row (mainly AU's) coming up the BIG hill on the way down into Noojee.

They also have this sort of electronic setup at Mary'sville where part of the Black Saturday fires decimated the town in 2011.

Crazy Dazz · 10-08-2017, 06:28 PM

Quote:

Originally Posted by Tassie f100

Well I was thinking pretty basic.A small shed/ shop and 3 pumps 1reg petrol 1 95 and 1 diesel.A compressor and a tap and a toilet.I know thats simplifying the job but if its only a small town/ lower volume don't need any thing too fancy

Mate you needed to have been born about 100 years ago, when Australians actually innovated and did things.

Chances of getting a new servo past the Council, Greens, and Nimby brigade would be practically nill.

The older servos are demolished because they're nolonger up to spec. You need massive storage, otherwise the distributors won't supply you at commercial rates.

Your chances of making a go of it as an independent, would be slim. And to join a chain as a franchisee, you'd have to build a palace to their specs.

Besides, the money is in the shop and takeaway food. If you have a good location for that, it would be ok.

Apart from the cost of the land, approvals, and legal battles, the construction costs would be several million.

Tassie f100 · 10-08-2017, 06:36 PM

Quote:

Originally Posted by Crazy Dazz

Mate you needed to have been born about 100 years ago, when Australians actually innovated and did things.

Chances of getting a new servo past the Council, Greens, and Nimby brigade would be practically nill.

The older servos are demolished because they're nolonger up to spec. You need massive storage, otherwise the distributors won't supply you at commercial rates.

Your chances of making a go of it as an independent, would be slim. And to join a chain as a franchisee, you'd have to build a palace to their specs.

Besides, the money is in the shop and takeaway food. If you have a good location for that, it would be ok.

Apart from the cost of the land, approvals, and legal battles, the construction costs would be several million.

Well I do know an independent who has a simple little set up who does quite well out of basically fuel only.He carries the basics as in oil etc and a drink fridge and a few Mars bars and a few bags of lollies.He is lucky in that he has a few big volume customers and is also close to an airport where the rental Co,s rip off customers at their own bowsers.Shop is about the size of a 20 ft container and not much flashier!!

Crazy Dazz · 10-08-2017, 09:08 PM

Quote:

Originally Posted by Tassie f100

Well I do know an independent who has a simple little set up who does quite well out of basically fuel only.He carries the basics as in oil etc and a drink fridge and a few Mars bars and a few bags of lollies.He is lucky in that he has a few big volume customers and is also close to an airport where the rental Co,s rip off customers at their own bowsers.Shop is about the size of a 20 ft container and not much flashier!!

But that's not the question you asked???

You specifically asked about building a new servo.

You can "make a go" out of anything. I know somebody who makes a nice earner out of bagging and selling manure. But he wouldn't want to spend $5M building a new manure showroom.

I also know a bloke who "does quite well" with only one leg.
But I'm in no rush to cut off one of mine.

Tassie f100 · 10-08-2017, 09:35 PM

Quote:

Originally Posted by Crazy Dazz

But that's not the question you asked???

You specifically asked about building a new servo.

You can "make a go" out of anything. I know somebody who makes a nice earner out of bagging and selling manure. But he wouldn't want to spend $5M building a new manure showroom.

I also know a bloke who "does quite well" with only one leg.
But I'm in no rush to cut off one of mine.

I didn't ask you any questions!! I responded to a question from another forum member regarding what others thought what the cost of reopening an old servo in a small town.Big difference between setting up a large multi bowser site compared to a basic 3 pump outlet

GASWAGON · 11-08-2017, 12:23 PM

If i really wanted to know i suppose i could ring council and ask about the site and why it has'nt been developed yet?

Site is too big for car wash i reckon.

Perfect for servo or units which are so bloody popular these days as it is in main street of town but that would also be millions $$$!