Build a Petrol Filling Station in Botswana: A Step-by-Step Guide.
Build a Petrol Filling Station in Botswana: A Step-by-Step Guide is a detailed guide to help you build a petrol filling station in Botswana.
Over the last twenty five years, I have worked in the Botswana oil industry.
My mission is to help potential petrol filling station owners to start new projects as well as improve existing businesses that are struggling.
To build a petrol filling station is a complicated and expensive undertaking.
It is interesting that most people think that they can manage this project themselves.
However, they mostly make costly mistakes that affect the performance of their business once the petrol filling station starts to operate.
The 5 Phases of Building a Petrol Filling Station
There are five important phases when you build a petrol filling station:
1.
Development Approval.
2.
Financing.
3.
Construction.
4.
Operation.
5.
Marketing.
I get a lot of enquiries from people that want to build a petrol filling station
I have decided to share with you a step-by-step
process to help you realize your dream.
To build a petrol filling station in Botswana, you
will need to follow the steps below.
You can click on the headings for a more in-depth explanation on how to Build a Petrol Filling Station in Botswana: A Step-by-Step Guide.
Development Approval to Build a Petrol Filling Station.
1. Location: This is perhaps the most important step. There are many factors that need to be considered when you choose the location of your filling station. Make sure that you consider all of the location factors to make sure that your business will be successful if you go ahead and build a filling station on your chosen location.
2. Traffic Count: If you are happy
with your location, the next step is to count the number of vehicles that drive
past this location. There are several issues to consider on a traffic count.
3. Engage Oil Companies: You will need to engage with oil companies to help you develop your petrol filling station. They will make an assessment of whether to develop based mostly on the traffic count and other factors that you will find below. The major oil companies offer similar terms to develop a filling station. The best way is to approach three or four and compare their offers.
4. Market Assessment: You will need to familiarize yourself with the market that your petrol filling station will operate in. It is crucial to consider various factors that can impact the success and viability of the business when you conduct a market assessment for your new petrol filling station.
5. Competitor Survey: You have to know what other petrol filling stations are currently trading in your market and how many are being planned to be built. There is a general sentiment that too many filling stations are being built in Botswana.
My view is that there are not enough filling stations in the country. Most new developments are being constructed along major highways while a good number of remote or under populated areas do not have filling stations at all.
6. Scoping: This involves the size of your petrol filling station and any other complementary
services you want to offer in your business. The key thing to remember is that the larger the filling station the more expensive it is to build. Your objective is to build a functional filling station with room to expand in the future once there is significant market growth.
7. Plot Size: the size of your plot should be suitable for a petrol filling station. This is related to the point above however this is more focused on you meeting both regulatory requirements and the size of your market.
As a rule of thumb, a very small petrol filling station needs at least 1,500 square meters. However, the best plot size should be more than 2,500 square meters.
8. Zoning: Before you buy or start developing your plot, make sure that you will be able to meet all the requirements for the zoning of a petrol filling station. Some people buy a plot with the hope of changing the land use or zoning. This can delay your project if the local council does not approve the change of land use.
9. Land Title: When you buy a plot for a petrol filling station, you will need to confirm that it has the necessary
title documents. The most important thing is to engage the services of a conveyancing attorney.
10. Soil Tests: You will need to determine if the soil in your plot is good enough to support the structure of a filling station. This includes drilling inspection holes to determine if there is bed rock that will make excavations for the underground tanks very expensive. You will need to engage professionals or experts. They will provide you with valuable guidance and ensure your soil tests are conducted effectively and in accordance with the required standards.
Get Finance to Build a Petrol Filling Station
.
11. Business Plan: you will need to prepare a comprehensive business plan with financial projections to determine the viability of the business. This plan will help you raise capital for the first phase of the project. It takes a considerable amount of time and resources to prepare a business plan. At a minimum, your business plan should cover the following areas:
·
Executive Summary
·
Objectives
·
Mission
·
General Company Summary
·
Management and Organization
·
Products and Services
·
SWOT Analysis
·
Competitive Advantage
·
Pricing/Rental/Earnings
·
Marketing Plan
·
Operational Plan
· Financial Plan
Your business plan should address the issues raised by your market assessment and in How to Build a Petrol Filling Station in Botswana: A Step-by-Step Guide.
12. Financing: It costs more than P250,000 to get all the necessary approvals to build a petrol filling station project. However, you can save 50% on this when you use the CEDA Project Facilitation Fund. To access this fund, you will have to register with LEA.
You will also need to plan for at least P7 million for building and operating the smallest filling station.
There is no guarantee that either LEA or CEDA will approve your loan application. You will have to approach other financiers as well. Your request for a loan needs to be tailored to each financier that you approach.
Commercial banks and investors have very similar requirements. If you intend to approach a number of them to finance your project, you will need to tailor each application specifically for each institution.
A lack of preparation will waste your time, your resources and most importantly fail to get you the funds that you need for your business.
13. Planning Permission: You will need to apply to the local council for planning permission to build a petrol filling station.
You must engage in open communication with the relevant authorities and seek their guidance, This will help you avoid making costly mistakes and ensure a smooth approval process for your filling station project.
14. EIA: All petrol filling station developments require an Environmental Impact Assessment study before they are approved. This is a detailed document that is prepared by registered environmental experts.
15. Architectural Plans: these will need to be approved by the local council. It is critical to choose an architect that specializes in filling station plans. There are many design specifications that need to be considered. Plans that fail to meet the required design standard will delay your project.
16. Road Access: you will need to apply for road access at both the Council and the Department of Roads at the Ministry. This is a very technical process and you will need to consult with road engineering professionals, as they can provide valuable guidance and ensure the design of your road access is in accordance with set standards.
17. Engineering Plans: you will need engineering drawings of your tank installations; electrical and structural plans form the respective engineers. The tank installations need to meet very strict safety guidelines. It is important to engage engineers that have extensive experience in developing petroleum installations.
18.
BERA Authorization: You will
need to get approval from BERA to construct a petrol filling station. This can be a challenging process if you have not prepared all the necessary documents that they require to issue both a construction license and a trading license on completion of your building project.
19. Building Permit: Once all the approvals are in place the council will issue you with a building permit. This allows you to start the construction of your petrol filling station.
20.
Bill of Quantities: a quantity
surveyor will prepare this to arrive at the construction and materials costs of your project. You will also need this document when applying for loans to build you filling station.
21.
Valuation Report: once all the
drawings are approved, a property valuer will need to determine the valuation
of the petrol filling station upon completion. This is important in that your bank will want to know if the filling station property value will be able to cover the loan amount including interest.
22.
Appoint a Contractor: Petrol filling
station installations are a very specialised engineering field. There are a number
of contractors that are authorised by BERA to install filling station pump and tanks. Make sure that your contractor is certified and has the necessary experience. They must give you a profile of all the installations they have worked on.
23. Bankable Feasibility: All the above documents will be required for a final feasibility study that will form the basis for financing the project. It is important to note that if you have not completed all of the above steps, you will not get a loan approved for your project.
Build a Petrol Filling Station
24.
Construction Finance: You will
need to apply for a loan to construct the petrol filling station. It is advisable that you include the working capital as you will need to have at least P1.5 million in
cash to operate the business.
25. Project Management: The
construction project will need a full-time project manager that understands the
oil industry and the many requirements that need to be met. Make sure that your project manager has experience in managing filling station projects. I can guarantee you that there will be technical problems with both the tank installations and the building structure.
26. Commissioning: once the petrol filling
station is constructed, it has to be commissioned. There are two main licensing
authorities: the local council and BERA. The council is mainly concerned with licensing the shop and other services on site while BERA licenses the petrol filling station.
27.
Calibration: The Botswana Bureau
of Standards (BOBS) has to issue calibration certificates for your fuel pumps or dispensers. Fuel pumps have electric or mechanical motors in the above ground cabinet of the machine. Fuel dispensers use a submersible pump in the underground fuel tanks.
Operation
28. Staffing: You will need to hire
a site manager and other staff that will work in your petrol filling station business. Make sure that the manager and supervisors have the best experience in the oil industry.
29. Training: you and your staff
will need to undergo training on the operations of a petrol filling station. This is
very specialised training as petroleum fuels are very hazardous
substances. This training must also include Health and Safety, First Aid and Fire Fighting. Safety training must include Response to a Robbery module.
30. BERA License: you will need to
apply for a license to operate the petrol filling station. This related to petroleum products
that will be sold on your premises.
31. Council License: the council commercial department will issue a license for all the other business activities in your petrol filling station. This will include a Health and Safety inspection and Department of Fire inspections. Other licensing authorities will demand a council trading license such as Bank of Botswana if you want to offer mobile money services.
Marketing
32. Marketing: here you prepare your marketing strategy and implementation plan to make sure that your business opens with a bang. Your marketing plan must take into account all the information you gathered when doing your market assessment and business plan. We can not provide a detailed analysis of how to develop a marketing strategy in How to Build a Petrol Filling Station in Botswana: A Step-by-Step Guide. However, you can click here to read The Latest Digital Marketing Insights.
33.
Opening for Business: for the
first three months of trading, you will be trouble shooting problems, fine
tuning processes, signing up with suppliers, and so many other operational
tasks. This will be a very challenging time and you will need a very experienced team to make sure that the process is smooth.
34. Launch: After a three-month trading period you need to launch your business and let your market know that there is a new petrol filling station in town. This will be a challenging period as a lot of things will go wrong.
Your tank installations may develop technical problems and issues with the IT systems. This will , result in frustrated customers that had a bad experience because your business is not yet fully operational.
It is highly likely that some of these customers will post negative reviews on social media about your business. Read How to Respond to Customer Reviews: Managing Online Feedback for insights on how to handle this.
35. Fighting for Market Share: your business now is up and running, at this stage you will be now fighting for market share with your competitors. Read How To Make a Great First Impression for insights on what you need to do.
I hope that this helps you.
Starting a petrol filling station business is both expensive and time consuming. However, if done right it can be a manageable process with very few major delays.
Each of the above steps is explained in
detail in the links provided.
If you need any assistance with this process, get in touch with us on how to in build a petrol filling station in Botswana for a step-by-step guide
Good luck!
2 Responses
thanks for your eye opening tips.im interested in build a filling station in letlhakane,may i engage as my consultant.
Good day Jethro. I will try and find time. Unfortunately, my schedule is tight right now.