How to Start a Gas Station: 8 Steps for Your New Business

Starting a gas station can lead to a rewarding business, but it requires planning, investment, and strategic decision-making. From choosing the right location to managing fuel pricing and in-store sales, each step plays a role in long-term success. This guide breaks down the key steps to help you build and run a profitable gas station. 

UNDERSTANDING THE GAS STATION INDUSTRY 

Gas stations are still a solid business model, but the industry is changing rapidly. Fuel sales remain strong, though electric vehicle (EV) charging is becoming more common, leading to many owners adding chargers to their establishments to keep up with demand. 

Convenience stores also bring in steady profits. Customers can buy snacks, drinks, and other essentials, making these sales just as important as fuel. 

There are also challenges to think about when you run a gas station. Fuel prices constantly fluctuate, and regulations can be strict, both of which can affect profitability and operations. Staying competitive means managing costs wisely and keeping up with industry changes. 

8 STEPS TO STARTING A SUCCESSFUL GAS STATION 

A gas station can be a profitable venture if you take the right steps. Here’s how to set yourself up for success. 

STEP 1 – CONDUCT MARKET RESEARCH AND CHOOSE A LOCATION 

Location is key for success. High-traffic areas bring in more customers, while poorly placed stations will struggle to turn healthy profits.

Consider nearby businesses, road visibility, and how easy it is for drivers to stop. A spot near highways or busy intersections usually works best, but take the competition into account. Too many gas stations nearby will cut into your sales.

Urban, suburban, and highway locations each have pros and cons. Take time to analyze local demand, customer habits, and future growth trends. It will help you choose the right place to build your station. 

STEP 2 – DECIDE BETWEEN INDEPENDENT VS. FRANCHISE OWNERSHIP 

Choose between an independent gas station or taking the franchise approach. Both have advantages and disadvantages, so the best option depends on your goals and budget. 

Franchising with a major brand like Shell or Exxon gives you instant recognition and supplier support. But it comes with franchise fees and strict contracts that limit flexibility. 

Independent stations give you more control over pricing, branding, and suppliers. While you won’t have a big-name brand behind you, lower costs and greater freedom can make up for it. Think about what works best for your situation before making a decision. 

STEP 3 – UNDERSTAND LICENSING, PERMITS & REGULATORY COMPLIANCE 

Before you can open a gas station, you’ll need the right licenses and permits. Each state has different requirements, so research local laws early. Common requirements include: 

• Business Licensing: Allows you to operate legally. 
• Environmental Permits: Covers fuel storage, disposal, and safety measures. 
• Alcohol, Tobacco, and Lottery Permits: Authorizes the sale of age-restricted and regulated products. 

Fuel regulations also vary at state and federal levels. Stay compliant from the start to avoid fines and legal issues down the road. 

STEP 4 – ESTIMATE STARTUP COSTS AND SECURE FINANCING 

Opening a gas station requires a significant upfront investment. Costs vary based on location, size, and whether you’re building from scratch or buying an existing station. Here’s a breakdown of the major costs: 

• Land Acquisition or Lease: Covers the cost of purchasing or renting the property. The price depends on the area and local demand. 
• Construction or Renovations: Includes building costs, fuel tanks, and necessary permits. 
• Fuel Supply Contracts and Inventory: Consists of initial stock and supplier agreements. 
• Convenience Store Setup and Staffing: Accounts for equipment, shelving, and employee wages.

To cover initial investment and future expenses, funding options include: 

• SBA Loans: Government-backed loans for small businesses. 
• Franchise Financing: Financial support for partners of a major fuel brand. 
• Private Investors and Credit Lines: Alternative funding for independent stations. 

Key Takeaway: Planning your finances early will help you secure funding and manage costs effectively.

STEP 5 – BUILD YOUR GAS STATION AND INSTALL EQUIPMENT 

Once you have funding and permits, think about setting up the right infrastructure. Start with the essentials: 

• Fuel pumps and underground storage tanks to handle fuel safely and efficiently. 
• Point-of-sale (POS) systems to process sales and track inventory. 
• Self-service or full-service models to determine staffing needs and shape the customer experience. 

Environmental safety is also critical. Fuel storage, spill prevention, and waste disposal must meet strict regulations. Careful planning now will help you stay compliant and avoid expensive problems later. 

STEP 6 – STOCK YOUR CONVENIENCE STORE AND SET UP SERVICES 

A convenience store does more than offer extras—it drives profits. Many customers pick up snacks, drinks, or essentials while stopping for fuel. These small purchases add up fast. Stocking popular items like beverages, tobacco, and automotive supplies keeps sales steady throughout the day.

Foodservice can significantly boost profits. Fresh coffee, hot sandwiches, and quick meals give people reasons to stop, even if they don’t need gas. A strong food selection also makes your station stand out from the rest. 

In addition to the store, offering extra services can bring in more revenue. Car washes, ATMs, and EV charging stations make your business more useful. The easier you make life for customers, the more likely they are to return. 

STEP 7 – HIRE & TRAIN YOUR STAFF 

Hiring the right people ensures smooth operations and good customer service. Cashiers, fuel attendants, store managers, and maintenance staff all play a role in keeping things running efficiently. 

But the hiring process is just the tip of the iceberg. Employees need hands-on training to handle transactions, manage inventory, and help customers efficiently. They should also learn how to spot theft and respond to emergencies. Setting clear expectations reduces errors and keeps your business in line with safety regulations. 

Scheduling is just as important. A well-structured shift plan keeps operations steady and prevents burnout. When employees have clear expectations and good leadership, they work better and provide better service. 

STEP 8 – DEVELOP A GAS STATION MARKETING & BRANDING STRATEGY 

A solid marketing strategy helps attract new customers and keep them coming back. Loyalty programs are a great way to build repeat business. Discounts or perks for frequent buyers make your station the go-to choice. 

Social media and local ads also help. Promotions, updates, and direct engagement with customers put your business on their radar. Staying visible keeps your station top of mind. 

Partnering with rideshare and delivery drivers can bring in steady traffic. Offering exclusive deals gives them a reason to choose your station over others. Small incentives can lead to loyal, long-term customers. 

HOW MUCH DOES IT COST TO START A GAS STATION? 

The cost to open a gas station can range from $250,000 to over $2 million. It comes down to location and setup fees. Rural stations tend to be cheaper, while urban locations come with higher land and construction costs. 

Beyond startup expenses, there are ongoing costs to consider. Fuel contracts, maintenance, and employee wages all impact long-term profitability. Budget carefully to increase your return on investment. 

HOW TO MAXIMIZE PROFITABILITY IN YOUR GAS STATION BUSINESS 

Maximizing profitability requires smart management and constant adjustment. Learn how to get the most from your station below. 

OPTIMIZE FUEL PRICING AND SUPPLY MANAGEMENT 

Fuel pricing has a big effect on profitability. Gas stations rely on wholesale contracts and supplier negotiations to secure competitive rates. As such, buying fuel at the right price helps maintain healthy margins. 

Prices at the pump also shift based on market conditions. Adjusting rates strategically ensures you stay competitive while maximizing revenue. 

INCREASE REVENUE THROUGH HIGH-MARGIN PRODUCTS 

Selling fuel brings customers in, but in-store sales drive higher profits. Snacks, drinks, and essentials often have bigger markups than gas, so encouraging impulse purchases at checkout boosts revenue.

Items like lottery tickets, tobacco, and premium beverages have good margins. Place them in high-traffic areas to turn quick stops into bigger purchases. 

LEVERAGE DIGITAL PAYMENTS & LOYALTY PROGRAMS 

Modern POS systems make transactions faster and improve accuracy. Customers expect seamless payment options, including contactless and mobile wallets. This keeps lines moving at a quick pace and improves satisfaction. 

Loyalty programs also build repeat business. Offering rewards, discounts, or fuel points encourages customers to return, which helps increase long-term sales. 

FREQUENTLY ASKED QUESTIONS ABOUT STARTING A GAS STATION 

Thinking about running a gas station? If so, you probably have a few questions. Here are answers to the most common ones to help you get started. 

How much does it cost to start a gas station? 

The costs for starting a gas station range from $250,000 to over $2 million, depending on location, size, and whether you're building from scratch or buying an existing station. Land, construction, fuel contracts, and permits all factor into the final price. 

How do I start a small gas station? 

The main steps to starting a small gas station are: 

1. Conducting market research and choosing a location 
2. Deciding between independent and franchise ownership 
3. Understanding licensing, permits, and regulatory compliance 
4. Estimating startup costs and securing financing 
5. Building your gas station and installing equipment 
6. Stocking your convenience store and setting up services 
7. Hiring and training your staff 
8. Developing a marketing and branding strategy 

How much do gas stations pay per gallon? 

Gas stations buy fuel at wholesale rates, but costs vary by location, supplier, and market conditions. Crude oil prices, transportation fees, and state taxes all impact the final price. 

Are gas stations a good investment?  

Yes, gas stations can be a good investment. However, profitability depends on things like location, fuel pricing, and operational efficiency. Stations that offer more than just fuel, such as convenience stores, car washes, or foodservice, tend to make more money. 

IS GAS STATION OWNERSHIP RIGHT FOR YOU? 

Owning a gas station can be profitable, but it takes careful planning, smart management, and the right location. Success comes from optimizing fuel pricing, boosting in-store sales, and offering additional services. If you’re looking to improve your loyalty program or maximize online ordering, explore Paytronix’s solutions for convenience stores and gas stations by booking a demo today.