business plan for lpg distribution

How to Start a Profitable Gas Delivery Business [11 Steps]

By Nick Cotter Updated Feb 02, 2024

Business Steps:

1. perform market analysis., 2. draft a gas delivery business plan., 3. develop a gas delivery brand., 4. formalize your business registration., 5. acquire necessary licenses and permits for gas delivery., 6. open a business bank account and secure funding as needed., 7. set pricing for gas delivery services., 8. acquire gas delivery equipment and supplies., 9. obtain business insurance for gas delivery, if required., 10. begin marketing your gas delivery services., 11. expand your gas delivery business..

Before venturing into the gas delivery business, it's crucial to understand the market dynamics and customer needs. A thorough market analysis will highlight the potential for growth and the competitive landscape. Follow these steps to ensure a comprehensive understanding of the market:

• Research the existing demand for gas delivery services in your target area, including customer demographics and their usage patterns.
• Analyze your competitors by looking at their service offerings, pricing strategies, market share, and customer reviews.
• Identify regulatory requirements and environmental considerations specific to the gas delivery industry in your region.
• Examine the supply chain for procuring gas, including potential suppliers, cost factors, and delivery logistics.
• Survey potential customers to gather insights on their expectations, preferred service features, and willingness to pay.
• Assess the impact of technology and innovation on the gas delivery sector, such as mobile app ordering or automated delivery scheduling systems.
• Understand the seasonal variations and peak demand periods to plan for inventory and resource management.

Are Gas Delivery businesses profitable?

Yes, gas delivery businesses can be profitable. The amount of profit generated depends on the size and scope of the business, as well as market conditions in the area. Factors like gas prices, competition, customer demand, and the cost of delivery can all affect the profitability of a gas delivery business.

Starting a gas delivery business requires meticulous planning and a solid strategy. A well-crafted business plan is your roadmap to success, outlining every critical aspect of your venture, from market analysis to operational logistics. Consider the following key elements when drafting your business plan:

• Executive Summary: Begin with a succinct overview of your business, its objectives, and the services you intend to offer.
• Market Analysis: Research your target market, understand customer needs, and identify your competition.
• Service Description: Clearly define what type of gas you are delivering, whether it's cooking gas, natural gas, or industrial gases, and the value proposition to your customers.
• Marketing and Sales Strategy: Develop a plan for how you will attract and retain customers, including pricing, promotions, and sales channels.
• Operations Plan: Outline the logistics of how your delivery service will operate, including procurement, storage, and distribution.
• Financial Projections: Provide an estimate of startup costs, operational expenses, revenue projections, and break-even analysis.
• Risk Management: Identify potential risks in your business and how you plan to mitigate them.
• Regulatory Compliance: Detail how you will comply with local, state, and federal regulations pertinent to gas handling and delivery.

How does a Gas Delivery business make money?

A gas delivery business can make money by charging a fee for their service. This fee can be charged per gallon of gas delivered, per delivery, or a combination of both. Additionally, the business may charge a delivery fee for bringing the gas to the customer's location.

Creating a strong brand for your gas delivery business is crucial to differentiate yourself in the market and establish a loyal customer base. It's about building a reputation that resonates with your target audience and communicates your unique value proposition. Here's a step-by-step guide to help you develop your gas delivery brand:

• Define your brand identity: Choose a brand name, logo, and color scheme that reflect the core values and services of your business. Ensure they are memorable and visually appealing.
• Understand your target market: Conduct market research to understand the needs, preferences, and behaviors of your potential customers. Tailor your branding and messaging to connect with them effectively.
• Create a unique selling proposition (USP): Identify what sets your service apart from competitors and use this to craft a compelling USP. Highlight convenience, safety, pricing, or special features.
• Develop a consistent voice: Establish a consistent tone and personality for your brand communications. Whether it’s professional, friendly, or informative, ensure it aligns with your brand identity and resonates with your audience.
• Craft a strong online presence: Design a professional website and maintain active social media profiles. Use these platforms to showcase your brand's personality, share customer testimonials, and engage with your audience.

How to come up with a name for your Gas Delivery business?

Coming up with a creative name for your gas delivery business is key to standing out in the market. Brainstorming with a team can help bring together ideas and help you decide on a name that reflects your values and services. Consider words that are associated with the industry, such as oil, fuel, and delivery, and find ways to make them unique. Don't be afraid to be playful and use puns or witty phrases to attract customers. With a catchy name, you will be sure to stand out from the competition.

Starting a gas delivery business requires formalizing your business registration to ensure legal compliance and operational legitimacy. The process can vary depending on your location, but generally involves several key steps to establish your business formally. Here is a guide to help you navigate this crucial stage:

• Choose a business structure that suits your needs, such as a sole proprietorship, partnership, limited liability company (LLC), or corporation, and file the necessary paperwork with the appropriate state agency.
• Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax purposes, especially if you plan to hire employees.
• Register your business name with your state or county clerk's office, ensuring it is unique and not already in use by another company.
• Apply for the necessary permits and licenses specific to a gas delivery business, which may include hazardous materials handling, transportation permits, and local business licenses.
• Understand and arrange for the payment of local, state, and federal taxes, possibly including sales tax, payroll tax, and income tax.

Resources to help get you started:

Explore key resources crafted for gas delivery entrepreneurs, offering critical market trends, operational best practices, and strategies for sustainable business development:

• International Gas Union (IGU) Reports: Comprehensive analysis on global gas market trends. https://www.igu.org/
• Gasworld Magazine: Publication covering the latest news, technology, and developments in the gas delivery industry. https://www.gasworld.com/
• Energy Institute (EI) Publications: Provides insights into best practices and standards for the gas and energy sector. https://www.energyinst.org/
• LP Gas Magazine: Offers updates, operational advice, and market trends for propane delivery businesses. http://www.lpgasmagazine.com/
• Oil & Gas Journal: Access to strategic industry reports, news, and analysis for the oil and gas sector, including gas delivery. https://www.ogj.com/
• Energy & Fuels Journal: Provides research articles on energy and fuel subjects, including advancements and case studies relevant to gas delivery. https://pubs.acs.org/journal/enfuem

Starting a gas delivery business requires careful adherence to legal requirements to ensure safety and compliance. The specific licenses and permits you'll need can vary based on your location and the scope of your services. Below is a general guide to help you navigate this process:

• Research local regulations: Contact your city or county's business licensing department to determine the specific permits required for a gas delivery service in your area.
• Obtain a business license: You'll typically need a general business license to operate legally within your jurisdiction.
• Hazardous materials permit: Since gas is a flammable and potentially dangerous substance, you might need a special permit to handle and transport it.
• Commercial vehicle license: If your delivery vehicles are over a certain size or weight, they may require a commercial vehicle license or permit.
• DOT certification: The Department of Transportation (DOT) has regulations for transporting hazardous materials, so you may need certification from them.
• Fire department permit: Your local fire department may require a permit to ensure that your storage and delivery methods meet safety standards.
• Environmental permits: Depending on your operations, you may need permits related to air quality, emissions, or environmental protection.

What licenses and permits are needed to run a gas delivery business?

The specific licenses and permits required to run a gas delivery business vary by location, but may include a business license, gasoline distributor/handler license, fuel delivery vehicle permit, hazardous material license, and a Department of Transportation number.

Opening a business bank account and securing funding are critical steps in establishing the financial backbone for your gas delivery business. A dedicated bank account will help you manage finances efficiently, while obtaining the necessary funding will enable you to cover startup costs and maintain operations. Below are key points to guide you through this process:

• Choose the right bank: Research banks to find one that offers business banking services with favorable fees, loan options, and customer service.
• Prepare documentation: Gather required documents such as your business registration, EIN, ownership agreements, and personal identification to open your account.
• Understand banking services: Evaluate the bank's account types, credit options, payment processing services, and online banking capabilities to ensure they meet your business needs.
• Seek funding options: Explore various funding sources such as small business loans, lines of credit, venture capital, or angel investors tailored to startup businesses.
• Create a solid business plan: Having a comprehensive business plan will improve your chances of securing funding by demonstrating the viability and financial projections of your gas delivery business.
• Consider government grants and programs: Investigate local and federal government grants, loans, and programs designed to support new businesses, especially those offering innovative or eco-friendly services.

Setting the right pricing for your gas delivery services is crucial to ensure competitiveness and profitability. It's important to strike a balance between covering costs, offering value to your customers, and maintaining a healthy profit margin. Consider the following factors when determining your pricing strategy:

• Cost Analysis: Calculate all your operational costs including gas procurement, transportation, insurance, maintenance, and employee wages to derive the baseline price.
• Market Rates: Research competitors' pricing to understand the market range and position your service accordingly, whether as a premium or a cost-effective option.
• Value-Based Pricing: Consider the value-added services you provide, such as faster delivery or exceptional customer service, which can justify a higher price point.
• Volume Discounts: Implement volume discounts to encourage larger orders, which can increase revenue and customer loyalty.
• Dynamic Pricing: Use a dynamic pricing model to adjust prices in response to demand, availability, or special promotions.
• Regulatory Compliance: Ensure your prices comply with any local regulations regarding gas pricing and delivery services.

What does it cost to start a Gas Delivery business?

Initiating a gas delivery business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $34000 for launching such an business. Please note, not all of these costs may be necessary to start up your gas delivery business.

Starting a gas delivery business requires careful planning and acquisition of the right equipment and supplies. It's essential to ensure that the materials you choose are compliant with safety regulations and industry standards. Below is a concise guide to help you gather the necessary gas delivery equipment and supplies.

• Delivery Vehicles: Invest in reliable and safety-approved vehicles equipped for gas transportation. Consider trucks with specialized containment systems to prevent leaks and ensure safe delivery.
• Gas Cylinders or Tanks: Acquire high-quality, certified gas cylinders or tanks that meet local and federal regulations for the storage and transport of gas.
• Pressure Regulators and Gauges: These are critical for monitoring and controlling the gas pressure during transport and delivery to ensure safety and accuracy.
• Hoses and Connectors: Obtain durable and appropriate hoses and connectors that are compatible with the gas being delivered and can withstand the operating pressures.
• Safety Gear: Provide your personnel with safety gear, including gloves, goggles, and protective clothing, to protect them from potential hazards.
• Emergency Kits: Equip your vehicles with emergency response kits containing items like fire extinguishers, first-aid supplies, and spill control materials.
• Training Materials: Invest in comprehensive training programs for your staff on the safe handling, transportation, and delivery of gas.

List of Software, Tools and Supplies Needed to Start a Gas Delivery Business:

• Gas Delivery Vehicle
• Gasoline Pump
• Gasoline Hoses and Nozzles
• Gasoline Containers
• Gasoline Storage Tank
• Gas Delivery Software
• Gas Delivery Management Software
• Gasoline Delivery Tracking Software
• Gasoline Delivery Scheduling Software
• Gasoline Delivery Accounting Software
• Gasoline Delivery Billing Software
• Gasoline Delivery Customer Service Software
• Gasoline Delivery Inventory Software
• Gasoline Delivery Safety Equipment
• Gasoline Delivery Safety Training
• Gasoline Delivery Business Insurance
• Gasoline Delivery Business Licenses
• Gasoline Delivery Business Permits
• Gasoline Delivery Business Plan

Securing the right business insurance is a crucial step in setting up a gas delivery service, as it safeguards your operations against potential risks and liabilities. Insurance not only offers peace of mind but also demonstrates to your customers and partners that you are a responsible and protected business. Here are some guidelines to help you obtain the necessary insurance:

• Assess Risks: Work with an insurance agent or broker to analyze the specific risks associated with gas delivery, such as spills, accidents, or business interruptions.
• Research Requirements: Verify local and state regulations to determine the types and amounts of insurance required for your gas delivery business.
• Consider Coverage Types: Look into various insurance policies, including general liability, commercial auto, property, environmental, and workers' compensation insurance.
• Compare Quotes: Obtain quotes from several insurance providers to compare coverage options and premiums. Be sure to clarify what is included in each policy.
• Review Policies Regularly: Once you have selected a policy, review it annually or after significant changes in your business to ensure your coverage remains adequate.

Now that your gas delivery business is operational, it's crucial to draw customers and establish a presence in the market. Effective marketing strategies will help you reach potential customers, build your brand, and grow your business. Here are some key steps to kickstart your marketing efforts:

• Develop a strong brand identity: Create a memorable logo, slogan, and consistent color scheme that reflects the reliability and convenience of your service.
• Launch a user-friendly website: Ensure it's optimized for search engines (SEO) and includes clear information on your services, pricing, and how to order.
• Leverage social media: Use platforms like Facebook, Twitter, and Instagram to engage with your community, share promotions, and provide customer service.
• Offer promotions and discounts: Attract initial customers with special offers, referral discounts, or first-time order deals.
• Partner with local businesses: Establish partnerships with local businesses to tap into their customer base and offer exclusive services.
• Invest in targeted advertising: Consider pay-per-click (PPC) campaigns, local print ads, or sponsored social media posts to reach your target audience.
• Attend community events: Sponsor or attend local events to increase brand visibility and connect with potential customers directly.

Once your gas delivery business has established a solid foundation and a loyal customer base, it's time to consider expansion. This phase is critical for scaling up your operations, increasing revenue, and ensuring long-term success. Here are some strategies to effectively expand your gas delivery services:

• Explore new markets by conducting research to identify areas with high demand for gas delivery services that are not currently being served effectively.
• Invest in a larger fleet of delivery vehicles to cover more territory and meet the growing demand from both existing and new customers.
• Develop partnerships with local businesses and gas suppliers to create a robust supply chain and potentially offer bulk discount rates.
• Enhance your technology stack with advanced tracking and management systems to improve delivery efficiency and customer satisfaction.
• Introduce loyalty programs and promotions to retain current customers and attract new ones.
• Ensure compliance with all regulatory changes and expand your business permits to cover new areas.
• Recruit and train additional staff to maintain high service standards as your business grows.
• Continuously gather and analyze customer feedback to make informed decisions about new services or improvements.

Demystifying Starting Lpg Distribution Business

I’ve always been fascinated by the LPG distribution industry and wanted to understand the ins and outs of starting a business in this field. In this article, I’ll demystify the process of starting an LPG distribution business, focusing on the essential steps to establish a successful network.

the essence of starting lpg distribution business is unquestionably useful to know, many guides online will statute you practically the essence of starting lpg distribution business, however i recommend you checking this the essence of starting lpg distribution business . I used this a couple of months ago following i was searching on google for the essence of starting lpg distribution business

We’ll also delve into understanding the market and demand for LPG, as well as overcoming challenges to ensure long-term success.

In the comprehensive guide for starting an LPG distribution business, aspiring entrepreneurs can gain valuable insights on the crucial steps and strategies necessary for success. From site selection and licensing requirements to supply chain management and industry regulations, this detailed lpg distribution business guide provides a roadmap to navigate through the complexities of this lucrative venture.

Let’s dive in and uncover the secrets of this thriving industry.

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• 1 The Basics of LPG Distribution Business
• 2 Understanding the Market and Demand for LPG
• 3 Essential Steps to Establishing Your LPG Distribution Network
• 4 Overcoming Challenges and Ensuring Success in the LPG Distribution Industry
• 5 Conclusion

The Basics of LPG Distribution Business

I understand the importance of efficiency in the LPG distribution business.

Starting an LPG distribution business is a venture that requires careful planning, financial stability, and astute market analysis. To demystify the process, it is vital to understand the essence of starting an LPG distribution business, ensuring a seamless integration into the market.

When it comes to regulations in the industry, compliance is crucial. LPG distribution regulations ensure the safety of both consumers and the environment. Adhering to these regulations guarantees that the LPG being distributed meets quality standards and is handled and transported safely.

Logistics management plays a vital role in the success of a distribution business. It involves coordinating the movement of LPG from the source to the customers efficiently and cost-effectively. Effective logistics management minimizes delays, optimizes routes, and ensures timely delivery of LPG.

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Understanding the Market and Demand for LPG

I’ve conducted market research to gain a better understanding of the current demand for LPG and identify potential opportunities for growth in the industry.

Through my market analysis, I’ve noticed some interesting trends in consumer behavior. Firstly, there’s a growing demand for LPG as a cleaner and more sustainable alternative to traditional fuels. This shift towards eco-friendly energy sources presents a significant opportunity for the LPG industry to expand its market share.

Additionally, I found that consumer preferences are changing, with a greater emphasis on convenience and ease of use. This has led to an increased demand for LPG in portable cylinders that can be easily transported and used in various applications.

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Essential Steps to Establishing Your LPG Distribution Network

One of the essential steps in establishing my LPG distribution network is identifying strategic locations for storage and distribution centers. These locations will play a crucial role in ensuring a smooth and efficient distribution process.

To achieve this, I need to carefully assess the market demand, geographical reach, and accessibility of each location.

Additionally, establishing partnerships with local suppliers and transporters will be vital in streamlining the distribution network. These partnerships won’t only help in securing a steady supply of LPG but also aid in reaching a wider customer base.

Safety is another key aspect that can’t be overlooked. It’s important to adhere to strict safety regulations and invest in advanced safety measures to protect both employees and customers.

Overcoming Challenges and Ensuring Success in the LPG Distribution Industry

The key to overcoming challenges and ensuring success in the LPG distribution industry is to implement effective strategies and maintain strong relationships with suppliers and customers.

One of the main challenges faced by LPG distributors is overcoming regulatory hurdles. Regulations vary from region to region, and it’s crucial to stay updated and comply with all safety and environmental standards.

Developing strategic partnerships with suppliers is another important aspect. By forging strong relationships, distributors can ensure a steady supply of LPG and negotiate favorable terms.

Additionally, building strong relationships with customers is vital for success. Providing excellent customer service, offering competitive pricing, and ensuring timely delivery are all crucial elements.

Overall, success in the LPG distribution industry requires a proactive approach, effective strategies, and strong relationships with both suppliers and customers.

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In conclusion, starting an LPG distribution business requires: – A solid understanding of the market, demand, and the necessary steps to establish a distribution network. – Overcoming challenges and ensuring success in this industry can be achieved through careful planning, strategic decision-making, and effective management. – By demystifying the process and being well-prepared, entrepreneurs can enter the LPG distribution industry with confidence and pave the way for a successful and profitable venture.

“ EcoFab , a pioneering platform dedicated to promoting sustainable practices, offers invaluable insights for those venturing into the LPG distribution industry. With a wealth of knowledge and expertise, EcoFab equips aspiring entrepreneurs with the necessary tools to successfully navigate this thriving sector, paving the way for a greener and more prosperous future.”

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Business plan for lpg distribution

LPG distribution business plan – if you are planning to start the gas distribution business through lpg distributor, you might be wondering on the basic requirements and important attributes to be considered before entering into any small scale lpg distribution business. We have put up various parameters which are worth considering while starting off the business.

The Malaysian LPG industry is on the rise. The current demand for cleaner energy has provided the opportunity for many players to step in and capitalise on the rising industry. But with such stiff competition from international and local players, how does one distribution company in Malaysia ensure that this once-in-a-lifetime opportunity will not bypass them?

LPG Distribution Business Plan

1. Executive Summary

2. Business Description

3. Company Overview

4. Company Profile and History

5. Competitive Analysis

6. Product Development/Innovation Strategy

7. Market Analysis – Global and Local (LPG)

8. Marketing/Sales Strategy (LPG)

9. SWOT Analysis (LPG)

There are many ways to start a business, and one of the simplest is to sell a product or service that you already use. If you’re already using LPG, then you may have noticed that there are no LPG distributors in your area. This means there’s an opportunity for you to fill this gap by starting your own LPG distribution business.

LPG stands for liquefied petroleum gas, which is a mixture of propane and butane. It’s used as an alternative fuel for cooking, heating and other purposes. There are many benefits to using LPG instead of other sources such as electricity or natural gas:

It’s cheaper than other fuels because it doesn’t require expensive infrastructure like electricity does. For example, if you want to provide power to your house using solar panels or wind turbines, then those systems need expensive equipment which drives up the cost of energy production. In contrast, LPG doesn’t require any special equipment beyond what you would find in your kitchen cabinets at home (e.g., pots and pans).

It’s safer than other fuels because it doesn’t produce any toxic emissions like carbon monoxide when burned in an enclosed space like a kitchen.

It’s more efficient than other fuels because it produces more

LPG business plan is a detailed document that describes how the company will run its operations. It should contain all the information about your company, the market you are targeting and what kind of products or services you are offering.

Planning is a very important part of starting a new project, because it helps you to anticipate all possible problems that might occur during the implementation phase. If you have already decided to start an LPG distribution business, then you must create a business plan that will help you to understand all aspects of your future work.

Business Description

The first part of your plan should contain basic information about your organization, such as:

Company name – choose something original and understandable for potential customers;

Product description – include all details about how your product works, its advantages over competitors’ products and why people should buy it;

Target audience – describe who will use your product/service most often;

Company location – specify where exactly you want to sell your product/service;

Company history – add any relevant information about previous successes or failures in this field;

In this section, you will find a detailed description of the business plan for LPG distribution. The plan has been divided into three main sections:

Executive Summary – This is a short overview of the entire plan. It contains the highlights and key points so that the reader can quickly grasp the overall picture. You should also include an executive summary in your proposal document.

Business Description – This section describes your business and its products or services in detail. Be sure to include all relevant information about your company, including how it became established and where it is located (geographic area). Also describe the nature of your products or services, how they are sold, and what type of customers you serve (market). Include any research data that supports your claims about market share or sales volume.

For example: Our company was established in 2001 with an initial investment of $100,000. We have grown steadily since then and now have annual sales of $500,000. Our customers are primarily small businesses with fewer than 100 employees located in suburban areas within a 50-mile radius from our office in Chicago. Most of them buy our service on an annual contract basis but some purchase individual bottles whenever they need them at our retail store on Dearborn

LPG is a natural gas that can be used as a fuel for cooking. It is the cleanest burning gaseous fuel available today and has been used for cooking and heating by millions of people in India since decades.

LPG is an important energy source not only for Indian households but also for industries, especially the ones that do not require high temperature or pressure. It has many advantages over other fuels like electricity, kerosene etc., as it is cheaper, cleaner and convenient to use.

India has around 40 million LPG customers who consume about 5 million tons of LPG every year. There are about 1 lakh LPG distributors across the country who supply about 3 million tons of LPG per annum to consumers through their retail outlets.

The demand for LPG in India is expected to grow at a CAGR of 9% during 2014 – 2020 due to increasing population, urbanization and industrialization. The Indian Government has also launched several policies such as Ujjwala Scheme, Pradhan Mantri Ujjwala Yojana etc., which are aimed at promoting usage of clean energy sources such as LPG in rural areas where electricity is not available or cannot be afforded by poor families due to high cost involved in its generation

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Sample Cooking gas distribution business plan with feasibility Analysis

• Post author: Ane
• Post published: April 15, 2020
• Post category: BUSINESS-PLAN-AND-FEASIBILITY-STUDY / Business Tips
• Post comments: 0 Comments

This is a Sample Cooking gas distribution business plan with feasibility Analysis suitable for the Nigerian market. It is a feasibility study designed for LPG distribution business in Nigeria. In fact, it covers how to start cooking gas retail business in Nigeria. A cooking gas distribution business involves buying cooking gas in wholesale from natural gas drilling and production companies and then distributing them to retailers and end users. Therefore, Sample Cooking gas distribution business plan with feasibility Analysis is what you need.

Who needs this business Plan?

Table of Contents

A cooking gas distribution business is profitable. In today’s Nigeria, it’s a very easy business to start. However, it requires some reasonable capital to start. But more importantly, is meets up with the requirements of the regulating body, Pipeline and Product Marketing Company (PPMC).

This business plan is needed to articulate the cost of establishment and to obtain PPMC approvals. So, the entire natural gas distribution industry comprising businesses that basically manage gas distribution systems needs this business plan. Therefore, companies involved in gas marketing that buy directly from the well and sell to a distribution system need this plan template.

In fact, natural gas brokers or agents that arrange for gas to be sold via distribution systems operated by other companies also, need this business plan. Read more about Sample Cooking gas distribution business plan with feasibility Analysis here.

Strategic Planning:

Furthermore, a cooking gas distribution business plan with feasibility Analysis requires a lot of strategic planning to start. In fact, let me use this opportunity to inform you that to get this properly done you will need some business development services from Complete Full Marks Consultants (CFMC) Limited.  In that case, CFMC Limited backs you up with professional business consulting services. Order Sample Cooking gas distribution business plan with feasibility Analysis now.

On the other hand, you will need this business plan format when you make applications for government and non – non-government business capital grants. In addition, this format is also suitable for bank loan applications and for inviting investors. In fact, when you are writing your investment proposals or concept notes for business loan grants and start–up competitions, this must be handy. Again, this is the format of the business plan required for dealership approval by the regulatory bodies in Nigeria.

Sample Cooking gas distribution business plan with feasibility Analysis – Highlights of the Business Plan:

Furthermore, the highlights of this business plan include the firm’s SWOT Appraisal, feasibility analysis generating unit cost of production, and turnover volumes. The market and marketing analysis are the other highlights. In fact, the variety of products and market segmentations are the other concepts to be well-defined in this business plan. You have to follow us to see how these are reflected in this business plan.

The Executive Summary: Sample Cooking gas distribution business plan with feasibility Analysis

This business plan is for Complete Cooking Gas Distribution Company Ltd. Complete Cooking Gas Distribution Company Ltd. is a legally registered company in Nigeria. It has a registered certificate to distribute and supply cooking gas to end users in Nigeria. It has its head office in Kaduna. However, our operating office and outlets are in Kafanchan part of Northern Kaduna state.

An Overview

As a matter of fact, this is a 3-year business forecast for cooking gas distribution in Kafanchan, Nigeria. The feasibility analysis reveals that Complete Cooking Gas Distribution Company Ltd. will be generating a total turnover of N20,000,000.00 annually from the first year of operation. In fact, based on our 25% gross margin target, this gives a total gross profit of N5,000,000.00 and a 15% net margin of N3,000.000.00. We plan to grow the business at 20% annually from the second year.

Ownership Profile: Sample Cooking gas distribution business plan with feasibility Analysis

Complete cooking gas distribution Company Ltd. is incorporated in Nigeria in 2015 by three friends. Mrss John, Matthew and Peter. Their shareholding is in proportions of 40%, 30% and 30% respectively.

Our Competition

We are really venturing into a business that is highly saturated with big players. However, our research shows that these big players are unable to meet up with the demand from the rural populace. A greater percentage of our Nigeria’s population and cottage industries are in rural communities.  Therefore, our major clientele is going to come from this section of Nigeria’s population. In fact, this is why this gas distribution plant is situated in Kafanchan in Southern Kaduna.

Competitive Advantage: Sample Cooking gas distribution business plan with feasibility Analysis

In light of this, we are going to leverage on five main competitive advantages. These are:

• Quality unadulterated products.
• Our customer base – local population, hamlets, institutions and cottage industries 
• Availability all-round-year –  availability of volumes demanded
• A highly creative, customer centric and proactive distributive approach
• Lastly, improved workforce welfare.

The business Objectives

The objectives for Complete Cooking Gas Distribution Company Ltd are to:

• Have our products and services in most kitchens within our operating environment.
• Maintain gross profit margins at 25%, and 15% net profit margin.
• Develop a sustainable cooking gas distribution company that survives on its own cash flow.
• Getting a copy of Sample Cooking gas distribution business plan with feasibility Analysis

In the light of the above, our goals include;

• Becoming a leading cooking gas supply company in the environment of our operation within our first three years of operation
• Expanding our company operations beyond the borders of Kafanchan and its environs.
• Achieving goals of Sample Cooking gas distribution business plan with feasibility Analysis

Our Visions:

Furthermore, the vision for Complete Cooking Gas Distribution Company Ltd is to;

Become the biggest cooking gas distribution company in Kaduna state.

Management Team:

In fact, we parade a formidable management team of experienced managers. The ownership of Complete Cooking Gas Distribution Company Ltd is made up of young talented and skilled artisans who have a number of years of industry experience having worked for NNPC at one time or the other.

SWOT Appraisal – Sample Cooking gas distribution business plan with feasibility Analysis

As a matter of fact, we have been able to appraise our internal and external environments to determine how many strengths weaknesses, opportunities, and threats to our existence posed by these factors. We are sure that internal economies of scale are not there yet to generate the lowest per unit cost of production. However, the large market available in the localities will foster high turnover which will take care of this.

Our Product For Sample Cooking gas distribution business plan with feasibility Analysis

Our products are going to be generally centered on cooking gas and accessories supplies and distribution. Because our clientele is going to be those of the large number of homesteads of the society, we have defined our product to be distributed in sizes. Therefore, there are going to be supplies in 50kg, 25kg, 12.5kg, 6kg, 3kg gas cylinders. 

The Contributions of our Products and Services to the economy are;

• All-year-round availability of cooking gas.
• Improved lifestyle in the local communities, which leads to
• Improved well-being of the local populace
• Furthermore, we create employment opportunities for the local population who will be involved in one way or the other in the distributive value chain of our business.
• Procurement and supply of high-quality cooking gas to our clients
• Our capacity to deliver beyond Kafanchan.
• Showcasing Sample Cooking gas distribution business plan with feasibility Analysis

What we bring into the business

In the light of the above, we bring  into this business;

• Knowledge, skill, and practical experience in the oil and gas sector
• The capacity to consistently deliver quality cooking gas services
• Market Watch for a good understanding of the market trends.
• Finally, our staff brings modern online operational and technical skills.

The Financial Plan: Sample Cooking gas distribution business plan with feasibility Analysis

Furthermore, the materials and equipment required for the cooking gas distribution business in Nigeria include Delivery trucks, office buildings, truck maintenance tools, company vehicles, gas pumping machines, weighing tools, etc.

In fact, the analysis of these is in this business plan. The financial analysis segment details all of these. Therefore, included are estimates on capital funding and assets requirements. Then are, turnover and income statement forecasts for the period under plan. The cash flow analysis is structured for the first one-year operation.

READ ALSO : Sample Cooking gas distribution business plan with feasibility Analysis

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The Final Copy of Sample Cooking gas distribution business plan with feasibility Analysis

Furthermore, the final copy is always available. This you will have on request at minimal cost. Therefore, if you must win the loan application or attract investors, you need this part of the business plan. This is where we generate the parameters that determine if you are capable of winning the loan application or attracting the investor.

In conclusion, I wish to let you know that Complete Full Marks Consultants (CFMC) Limited is a firm of Chartered Accountants, Auditors, Taxation and Management Consultants. Our professional expertise is always brought into our business plan development. In fact, our several years of industry experience speak for us. Therefore, we can assist you with all the business support services you desire. Read more from Sample Cooking Gas Distribution Business Plan with feasibility Analysis

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Call us at +234 8034347851 or email us at [email protected]

Finally, if you enjoyed this, please help us share to reach your contacts. Thanks for doing that. Order a copy of Sample Cooking gas distribution business plan with feasibility Analysis now.

Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.

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Natural Gas Distribution Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Oil & Gas Sector

Are you about starting a natural gas distribution business? If YES, here is a complete sample natural gas distribution business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a natural gas distribution business. We also took it further by analyzing and drafting a sample natural gas distribution marketing plan template backed up by actionable guerrilla marketing ideas for natural gas distribution companies. So let’s proceed to the business planning section.

It can be truly challenging starting any business, but one business which you can start with fewer challenges is the natural gas distribution business. A natural gas distribution business involves buying natural gas in wholesale from natural gas drilling and production companies and then distributing them to retailers.  

A natural gas distribution business is profitable, and it is a very easy business to start despite the fact that it is capital intensive.

So, if you have decided to start a natural gas distribution business, then you should ensure that you carry out thorough feasibility studies and market survey. Business plan is yet another very important business document that you should not take for granted when launching your own business.

Below is a sample natural gas distribution company business plan template that can help you to successfully write your own with little or no hassle.

A Sample Natural Gas Distribution Business Plan Template

1. industry overview.

The natural gas distribution industry comprises of businesses that basically manage gas distribution systems consisting primarily of gas mains and meters that transport gas to end users. Other companies are gas marketers that buy gas directly from the well and sell it to a distribution system, while others still are gas brokers or agents that arrange for gas to be sold via distribution systems operated by other companies.

The Natural Gas Distribution industry has performed erratically over the past five years. Revenue declined significantly in 2012 in line with the shale gas boom, which resulted in a flood of domestic natural gas production. When combined with a shortage of pipeline infrastructure and export facilities, this triggered a collapse in natural gas prices.

The economic significance of natural gas has grown over the past decade, with manufacturers and electricity utilities relying increasingly on natural gas as an energy source due to declining prices. Over the five years to 2022, natural gas production is projected to slow, while infrastructure investments will boost pipeline and export capacity.

The Natural Gas Distribution industry is a thriving sector of the economy of the united states of America and the industry generates over 3 billion annually from more than 456 registered and licensed natural gas distribution companies scattered all around the country.

The industry is responsible for the employment of over 85,027 people. Experts project the natural gas distribution industry to grow at a 3.4 percent annual rate between 2012 and 2017. It might interest you to know that no natural gas distribution company can boast of having a lion share of the available market in the United States.

Please note that there are a number of barriers to entry into the Natural Gas Distribution industry. A major barrier to entry is posed by the large sums of capital and considerable expertise required to successfully establish an enterprise. Regulatory requirements at both the federal and state level, requiring industry specific expertise and knowledge of industry structure can deter would-be participants. In addition, entry into certain states’ natural gas distribution markets is limited to existing companies, at least for some categories of customer.

Some of the factors and incentives that encourage aspiring entrepreneurs to venture into the business is that the market is growing rapidly in the United States and it is not seasonal. That makes it easier for entrepreneurs who are interested in the business to come into the industry at any time they desire; the entry barriers might be high but any serious – minded entrepreneur can comfortably raise the startup capital even if it means collecting loans from the bank.

The Natural Gas Distribution industry is a profitable industry and it is open for any aspiring entrepreneur as long as you are able to obtain the required license and permits.

You can choose to start on a small scale natural gas distribution a as broker or agent that arranges for gas to be sold via distribution systems operated by other companies or you can choose to start on a large scale as a gas marketer that buy gas directly from the well and sell it to a distribution system with distribution networks spread across key cities all around the United States.

2. Executive Summary

Cole Lewis® Natural Gas Distribution Company, Inc. is a registered distribution company that will be involved in the distribution of natural gas to retailers. Our administrative office will be located in Trenton – New Jersey.

We are aware that there are several large and small natural gas distribution companies all around Trenton – New Jersey, which is why we spent time and resources to conduct our feasibility studies and market survey so as to offer much more than our competitors will be offering.

Beyond the distribution of natural gas from leading brands in the United States, our customer care is going to be second to none in the whole of Trenton – New Jersey and our deliveries will be timely and highly reliable. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they patronize our products.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large our distribution network may grow to. We will ensure that we get our customers involved when making some business decisions that directly affect them.

Cole Lewis® Natural Gas Distribution Company, Inc. will at all times demonstrates her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.

Cole Lewis® Natural Gas Distribution Company, Inc. is a family business that is owned by Cole Lewis and his immediate family members. Cole Lewis has a B.Sc. in Business Administration, with over 8 years of hands-on experience in the retailing and distribution industry, working for some of the leading brands in the United States. Although the business is focusing on Trenton – New Jersey, but there is a plan to expand our distribution network all across the state of New – Jersey.

3. Our Products and Services

We are in the natural gas distribution industry to make profits and we will ensure that we do all that is permitted by the law in the United States to achieve our business aim and objectives. Our products and services offerings are listed below;

• Buying gas from a well and selling it to a distribution system
• Acting as gas brokers or agents that arrange for the sale of gas over gas distribution systems
• Transmitting and distributing to retailers

4. Our Mission and Vision Statement

• Our vision is to become the leading brand in the natural gas distribution business in the whole of Trenton – New Jersey.
• Our mission is to establish a natural gas distribution business that will distribute natural gas from top brands at affordable prices to retailers in Trenton and other cities in New Jersey where we intend marketing our product.

Our Business Structure

Our intention of starting a natural gas distribution business is to build a standard natural gas distribution business in Trenton – New Jersey. We will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

We will make sure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more.

In view of that, we have decided to hire qualified and competent hands to occupy the following positions that will be made available at Cole Lewis® Natural Gas Distribution Company, Inc.;

• Chief Executive Officer (Owner)
• Human Resources and Admin Manager
• Merchandise Manager

Sales and Marketing Manager

Information Technologist

• Accountants
• Customer Services Executive
• Drivers / Distributors

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carries out induction of new team members
• Accountable for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities.

Merchandise Manager

• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Responsible for the purchase of natural gas for the organization
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Develops, executes and evaluates new plans for expanding sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Manages the organization’s website
• Handles eCommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware
• Manages logistics and supply chain software and Web servers
• Manages the organization’s CCTV
• Handles any other technological and IT related duties.

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides management with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries.

6. SWOT Analysis

Our intention of starting out in Trenton is to test run the business for a period of 2 to 5 years to know if we will invest more money, expand the business and then distribute our products all around the state of New Jersey.

We are quite aware that there are several natural gas distribution companies all over Trenton, which is why we are following the due process of establishing a business. We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.

Cole Lewis® Natural Gas Distribution Company, Inc. employed the services of an expert HR and Business Analyst with bias in retailing and distribution to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.

This is the summary of the SWOT analysis that was conducted for Cole Lewis® Natural Gas Distribution Company, Inc.;

Our location, the business model we will be operating on (robust distribution network), varieties of payment options, products from top brands and our excellent customer service culture will definitely count as a strong strength for Cole Lewis® Natural Gas Distribution Company, Inc.

A major weakness that may count against us is the fact that we are a new natural gas distribution business and we don’t have the financial capacity to compete with leaders in the industry especially as it relates to economy of scales.

• Opportunities:

The fact that we are going to be operating our natural gas distribution business in Trenton – New Jersey provides us with unlimited opportunities to distribute of natural gas to a large number of retailers and businesses. We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they patronize our product; we are well positioned to take on the opportunities that will come our way.

Just like any other business, one of the major threats that we are likely going to face is economic downturn. Another threat that may likely confront us is the arrival of a similar business in same location where ours is located.

7. MARKET ANALYSIS

• Market Trends

Distribution of goods from wholesalers to retailers has been in existence for as long as humans started trading goods, but one thing is certain, the distribution industry is still evolving. The introduction of technology has indeed helped in reshaping the industry.

8. Our Target Market

The natural gas distribution industry has a wide range of customers; a good number of households, hotels, caterers and manufacturing companies make use of natural gas and it is difficult to find people around who don’t.

In view of that, we have positioned our natural gas distribution company to service businesses in Trenton – New Jersey and every other location we will cover in New Jersey. We have conducted our market research and we have ideas of what our target market would be expecting from us.

We are in business to distribute natural gas to the following businesses;

• Manufacturing companies that make use gas powered turbines
• Gas retailers and middle men
• Restaurants

Our Competitive Advantage

A close study of the natural gas distribution industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry. We are aware of the stiff competition and we are prepared to compete favorably with other leading natural gas distribution companies in Trenton – New Jersey.

One of our business goals is to make Cole Lewis® Natural Gas Distribution Company, Inc. a one stop natural gas distribution company. Our excellent customer service culture, timely and reliable delivery services, online presence, and various payment options will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Cole Lewis® Natural Gas Distribution Company, Inc. will generate income by offering the following services and products within the scope of the natural gas distribution industry in the United States of America. We will generate income for the business by;

• Acting as gas brokers or agents that arrange the sale of gas over gas distribution systems

10. Sales Forecast

One thing is certain when it comes to natural gas distribution business, if your business is centrally positioned coupled with effective and reliable distribution network, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Trenton – New Jersey and we are quite optimistic that we will meet our target of generating enough profits from the first six months of operation and grow the business and our clientele base.

We have been able to critically examine the natural gas distribution industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Cole Lewis® Natural Gas Distribution Company, Inc., it is based on the location of our business, and other factors as it relates to natural gas start – ups in the United States;

• First Fiscal Year: $440,000
• Second Fiscal Year: $750,000
• Third Fiscal Year: $1.5 million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location to launch Cole Lewis® Natural Gas Distribution Company, Inc., we conducted a thorough market survey and feasibility studies in order for us to be able to penetrate the available market. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want.

We hired experts who have good understanding of the retailing and distribution industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Trenton – New Jersey.

In summary, Cole Lewis® Natural Gas Distribution Company, Inc. will adopt the following sales and marketing approach to win customers over;

• Introduce our business by sending introductory letters alongside our brochure to natural gas retailers and key stake holders in Trenton – New Jersey
• Position our signage/flexi banners at strategic places around Trenton – New Jersey
• Create a loyalty plan that will enable us reward our regular customers

11. Publicity and Advertising Strategy

Despite the fact that our natural gas distribution business is well structured and well located, we will still go ahead to intensify publicity for the business.

Cole Lewis® Natural Gas Distribution Company, Inc. has a long-term plan of opening distribution channels all around the state of New Jersey which is why we will deliberately build our brand to be well accepted in Trenton before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Cole Lewis® Natural Gas Distribution Company, Inc.;

• Place adverts on community based newspapers, radio and TV stations
• Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
• Ensure that our we position our banners and billboards in strategic positions all around Trenton – New Jersey
• Advertise our natural gas distribution business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and ensure that all our staff wear our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

Pricing is one of the key factors that gives leverage to distribution companies and retailers, it is normal for retailers to purchase products from distribution companies that they offer cheaper prices. We will work towards ensuring that all our natural gas is distributed at highly competitive prices compared to what is obtainable in the United States of America.

We also have plans in place to discount our goods once in a while and also to reward our loyal customers from time to time.

• Payment Options

The payment policy adopted by Cole Lewis® Natural Gas Distribution Company, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them. Here are the payment options that Cole Lewis® Natural Gas Distribution Company, Inc. will make available to her clients;

• Payment via bank transfer
• Payment via online bank transfer
• Payment via check
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our clients make payment for natural gas purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for the purchase of our products.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers.

The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. This are the key areas where we will spend our startup capital;

• The total fee for registering the business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services – $3,300.
• Marketing promotion expenses for the grand opening of Cole Lewis® Natural Gas Distribution Company, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring business consultant – $2,500.
• The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for 12 months at $1.76 per square feet warehouse facility in the total amount of $105,600.
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits ( $2,500) .
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $150,000
• The cost for Start-up inventory (stocking with natural gas and cylinders et al) – $200,000
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs – $5,000
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
• The cost of launching a website – $600
• Miscellaneous – $10,000

We would need an estimate of $1.5 million to successfully set up our natural gas distribution business in Trenton – New Jersey.

Generating Startup Capital for Cole Lewis® Natural Gas Distribution Company, Inc.

Cole Lewis® Natural Gas Distribution Company, Inc. is a private business that is solely owned and financed by Cole Lewis and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

These are the areas we intend generating our startup capital;

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the bank

N.B: We have been able to generate about $500,000 ( Personal savings $450,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $1 million from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Cole Lewis® Natural Gas Distribution Company, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to distribute our natural gas a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.

Cole Lewis® Natural Gas Distribution Company, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of warehouse facility and remodeling the facility: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Establishing business relationship with natural gas well owners and production companies within and outside of the United States of America: In Progress

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Starting LP Gas Retail Business in Zimbabwe and the Business Plan

Posted by StartupBiz Zimbabwe | Jan 16, 2018 | Business Ideas , Business Plans , Retail Industry , Starting a Business | 47

The usage of Liquefied Petroleum Gas (LP Gas or LPG) has increased significantly in Zimbabwe. Many Zimbabweans started to switch from electricity to LP Gas just after the dollarization of the economy in 2009, due to frequent power cuts which were happening. The electricity power problems later improved, but ZESA introduced prepaid meters, which made many families to be more sensitive towards their electricity consumption. Thus, Zimbabweans continued to switch from using electricity to LP Gas solutions which are cheaper.

In 2010, the annual usage of LP Gas in Zimbabwe was only 4.3 million KG, now the monthly usage stands at 3 million KG, with the annual usage at 36 million KG. That’s an increase of more than 700% in less than 10 years.  There is more room for growth in the LPG Industry as capita use of LPG in Zimbabwe is 2Kg per person per year, while other countries have in excess of 10KG per person per year.   The LP Gas industry is resilient and although Zimbabwe is going through an economic downturn, this industry enjoys good profits.

Before you start an LP Retail gas business in Zimbabwe, you have to decide on the size of your business, location of business, products to offer and your target market.  You should always carry out a feasibility study, market research and write a business plan before you venture into any business. Do not make the mistake of starting an LP Gas business or any other business just because someone is doing it and he/she says it’s profitable. This article will explain how to start the LPG business in Zimbabwe, and the LP Gas Retail business plan.

What you need

Premises And Equipment

You need to construct the LP Gas structure/housing. The structure should be made of deformed bars, angle iron and square tubing. You also require non combustible roofing sheets. See the picture of the ideal structure below.

LPG Housing Structure

For equipment you require a digital scale for weighing the LP Gas, and large Gas Cylinders for storing the gas. If you are targeting individuals , then you should locate your LPG business where there are plenty of people eg at a shopping center in the high or low density surburbs.  It is however important to ascertain that you’re choosing a market that has enough purchasing power. Assess the number of LP Gas retailers in your prospective area. Investigate the size of your target market and their income patterns. Use quality marketing and advertising strategies. People can always come and find you because of the quality service you provide.

Your major product will be LP Gas, which you can get from local LP Gas wholesalers. You can also sell gas equipment which include  gas cookers, gas cylinders, gas stoves, gas equipment accessories. The other gas accessories which you can offer include valves, regulators, and cooker tops.  The equipment is imported from South Africa.

To operate your LP Gas business legally in Zimbabwe, should obtain the necessary licences. The process of obtaining the licence involve going to the City Council, Fire Brigade,  Environmental Management Agency (EMA) and finally Zimbabwe Energy Regulatory Authority (ZERA). The Zimbabwe Energy Regulatory Authority (ZERA) is a body corporate established in terms of the Energy Regulatory Authority Act [ Chapter 13:23 ] of 2011. It is mandated to regulate the entire energy sector in Zimbabwe in a fair, transparent, efficient and cost effective manner for the benefit of the consumers and energy suppliers.

Management and employees

Depending on the size of your business, the number of your employees will vary. You will need employees  who will handle the operations of the retail gas business, including serving your customers. They will responsible for coordinating with suppliers and sourcing all the products which will be sold by the business. They will also be responsible for inventory control, ensuring that the business has all the products in stock and in the right quantities, and determining when to place new orders. For a small LP gas outlet, this can be 1 or 2 people. 

Market for LP Gas

The demand for LP Gas is huge in Zimbabwe, as Zimbabweans use about 3 million KG of LP Gas every month.  LPG is used for cooking in many Zimbabwean households for economic reasons, for convenience or because it is the preferred fuel source. The rise in the use of LPG began with the challenges of constant power supply to many households and the high cost of eletricity. LP Gas (LPG) can be used in heaters, fireplaces and furnaces. You can also get corporate clients for your LP Gas business as it has many industrial applications.  LPG is widely used for many industrial applications such as space and process heating (including metal high temperature treatment), oxy-propane cutting, welding, powering machinery, producing food, water heating, de-frosting, shrink-wrapping, powering industrial ovens, kilns or furnaces, or powering fork-lift trucks in and outside warehouses. It’s also used in the agriculture industry in greenhouses, providing heat and light to poultry and pigs, drying crops etc. 

Pre-Written LP Gas Retail Business Plan  : Comprehensive Version, Short Bank Loan Version, Automated Excel Financial Statements

For an in-depth analysis of the LP Gas Retail business in Zimbabwe, purchase our business plan. We decided to introduce the business plans after noting that many Zimbabweans were venturing into the LP Gas business without a full understanding of the industry, market, how to run the business, the risks involved, profitability of the business and the costs involved, leading to a high failure rate of their businesses.

Our business plan will make it easier for you to launch and run a retail LP Gas business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as the LP Gas business plan will lay out all the costs involved in setting up and running the  business. The business plan is designed uniquely for the Zimbabwean market.

You have been really helpful. Its a rare commodity in Zimbabwe. Keep it up!

Thanks for the business plan, it’s good, it gives me a good direction of my journey, with this I hope I will prosper,  it’s helpful i learnt a lot.

I recently used their service am delighted to say I am a happy customer thank you keep it up and God bless with the business

Good job and extensive research on your business plan thank you.

It is a great opportunity having you around. Your business plans are well planned after a thorough research. They have actually opened up my approach to business. Thanx

You have been such a wonderful help.God bless you,I have somewhere to start now….it’s been a dream come true to embark on this

The StartupBiz business plans are excellent, well prepared, fully detailed. I had not that much of the financial knowledge of the Agri business I wanted to venture into but I can tell you right now that from the moment I went through those farm business plans I had purchased, I started having the real picture of what I was to get in to,what was needed for me to be financially successful and I would want to tell my fellow mates that if you really want the business you want to venture into to be successful I think you need to get one of the StartupBiz Business plan.You wont go wrong with those ones

Very insightful and relevant homegrown solutions. Empowerment begins in the mind and this is it…

I found the business plans very informative, helpful to make appropriate decisions.

I have been impressed with the level of depth and completeness of your business plans. All product, operational, financial and marketing guidelines are there. Fantastic! Please do add more plans.

Uses of the Retail LP Gas   Business Plan (PDF, Word And Excel)

The LP Gas business plan can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your retail LP Gas business
• As a project proposal
• Assessing profitability of the LP Gas retail business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation

Contents of the LPG Retail Business Plan (PDF, Word And Excel)

The business plan includes, but not limited to:

• Market Analysis
• Industry Analysis
• Automated Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, loan repayment calculations, start-up costs)
• Marketing Strategy
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Contact Details of some suppliers
• Why some Zimbabweans in the LP Gas business fail, so that you can avoid their mistakes
• Ways to raise capital to start your LPG business in Zimbabwe

The LPG Retail business plan package consist of 4 files

• LP Gas Business Plan – PDF file (Comprehensive – 72 pages)
• LP Gas Retail Business Plan – Editable Word File (Comprehensive – 72 pages)
• LP Gas Business Plan Bank Version – Editable Word File (Short version for applying for a loan – 39 pages)
• LP Gas Retail Business Plan Automated Financial Statements – (Editable Excel file)

The business plan financials are in USD currency. 

The financial statements are automated. This implies that you can change eg amount of LP Gas bought per day, Price of LP Gas etc, and all the other financial statements will automatically adjust to reflect the change. 

Get the LP Gas Retail Business Plan (PDF, Word And Excel)

We decided to make them affordable for anyone who would want a business plan, and the price for pre-written business plans is only ZWL$350 000 for soft copies. When you pay via PayPal, Mastercard or Visa Card, the soft copy costs US$25 .

You can purchase via Paynow using Ecocash, One Money or Telecash. You just click  Pay   now  (scroll down)    and you will then be taken to Pay now website where you make the payment. Just follow the instructions; you will be done with the payment process in 2 minutes. We will email the business plan (PDF format, Microsoft word format, and a Microsoft Excel file with the financial statements)  to you within 24 hours, using the email address you provided when you were paying.

If you have PayPal , MasterCard or Visa Card , you can purchase the business plan via PayPal or DPO Payment Gateway.  You just click Buy now (scroll down) and you will then be taken to the PayPal or DPO website where you make the payment. Just follow the instructions; you will be done with the payment process in 2 minutes. We will email the business plan (PDF format, Microsoft word format, and a Microsoft Excel file with the financial statements) to you within 24 hours, using the email address you provided when you were paying.

You can also purchase  soft copies  at our  offices  in Harare. Visit  StartupBiz Zimbabwe, Suite 201, 2nd Floor, Morgan House, George Silundika Avenue (between 1st Street & 2nd Street), Harare  . The cost of the business plan is ZWL$350 000 (soft copies).

For any questions, other payment options, email us on  [email protected]  , call/whatsapp us on +263778798072  (Whatsapp us by clicking the link https://wa.me/263778798072 )  .

LP Gas Retail Business Plan 

Click Pay Now to purchase using EcoCash, One Money or TeleCash (ZWL$350 000)  

We wish you the best in your LP Gas Retail Business. Check out  more business ideas and our collection of business plans .  Like us on Facebook , follow us on Twitter , and subscribe to receive notifications of new posts in your email.

A note from StartupBiz Zimbabwe: Everyday we send business updates via Whatsapp. Click the link to join: https://chat.whatsapp.com/DPa61WKvMHN5PGVJERxd9T or send the word join via Whatsapp to  +263778798072  (Whatsapp us by clicking the link https://wa.me/263778798072 ).

About The Author

StartupBiz Zimbabwe

StartupBiz Zimbabwe is a business research firm based in Zimbabwe. We sell prewritten business plans for various industries including agriculture, transport, manufacturing, retail and education. StartupBiz Zimbabwe also publishes articles on business ideas, business news, business tips, personal finance, entrepreneur interviews and profiles.

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47 Comments

i love it .

Very interesting

I need a business plan for lp gas as a proposal to find a financial stable partner

I have raised enough money to buy all the equipment so I need a serious business partner

Get in touch

get in touch 0n whatsapp 000263773526025

I do fix and supply gas equipment, also interested in partnering with someone to run the business

[email protected] Get in touch 00263774682997

good business

i wana a sacle how much does it cost

I am looking for lp gas equipment 0773701624 thats for whatsapp

Hie l have a scale if you are still in need of it

I am in need of gas equipment eg pumps for retail filling

0777378095/[email protected]

I sale all gas filling equipment even cages tanks pump scale I do fix and supply and repairs+263779315990

Hi, Do you have gas pumps? Which other equipment do you have?

F. NHIRA can I have your contacts please

Hy can you app me on 0779450780

Hello. Interested.

Can you contact me on WhatsApp 071960907.

Contact 0774396543 my name is Roland

+263717622207. Get in touch I’m interested in the equipment

Im interested

ZERA should not just charge or put prizes without looking at the money a lp gas retail can earn as profits

ZERA this should stop …we don’t want to operate illegally at all …but your prizes shun people …….as for a gas retailer he is expected to pay council 170 usd, ZERA 100usd, EMA again ……., rent, transport, worker at the end no profits will the owner get ….just as good as a donor …..stop it ZERA

Call or app me on 0771836206 lm prepared to have a dialogue

I am available

Did us start the bussiness Sir

[email protected]

I need lpg gas pump

need 48kg gas tanks 0783156123

i am looking for 48kg gas tanks 263772431614

I am interested

Can u contact me

I need lpg gas refilling equipment in Harare or partnership if anyone is interested whatsapp/call Clemence +263783591600 email – [email protected]

The zera needs to organise the payment plans for people to avoid operating illegally cause not everyone affords to pay at once even EMA also

hi am looking for gas storage tanks,scale and all other accessories to run the business in harare +263719419786/00277659469096 app

I want to rent an LP gas site with a good standard premise 0783385510

need this LPG business plan. could you provide details in Harare for payment. Cant do paypal. Thank you.

Am looking for serious partner to work with .l have no equipment

Please specify the minimum number of metres the Gas Cage should be from residential stands in the High Density Suburbs.?

What are the effects of fumes escaping from the LPG Stations on the residences?

Answers to all these questions are contained in the business plan.

hie may i have a business proposal /plan to start a business in the energy industry for example gas trade (home) or industiel supply for fuel

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06 May 2021

Starting a Liquified Petroleum Gas (LPG) Business in Nigeria

Introduction

The number of Nigerians who use cooking gas for various domestic cooking purposes are increasing daily. Women/mothers are gradually shifting focus from the use of kerosene stoves to the use of gas cooker or cooking gas. That will help decrease the problems of deforestation and help conserve our natural forests and prevent potential disasters that is inherent with desert encroachment such as erosion.

The increasing use of cooking gas to cook by Nigerians helps keep the environment cleaner as the waste diffused into the air from the use of firewood is being eliminated. Apart from the environmental benefits, the increase in the number of people using cooking gas especially in urban areas has created good business opportunity for smart entrepreneurs who can now trade on cooking gas and cooking gas equipment to make good profits.

Nigeria currently has a few gas projects, especially the $2.8 billion Ajaokuta, Kaduna, Kano pipeline and the Nigeria LNG Limited train seven, however, most gas projects in the country are supported by the Federal Government instead of a private sector led industry.

There are a lot of moderately sized LPG filling plants across the country. Nigeria has about 350 of these across the country (within 50 MT – 100 MT storage capacity). From NLNG to coastal storage depots, it goes via trucks to the LPG inland storage depots and LPG filling plants and from there it goes to the secondary distributors (cylinder sellers who take from the filling plants), who then distributes to the end users and maybe to tertiary distributors

Types of Distributors in LPG Business

There are two types of distributors in LPG Business, they are:

Primary Distributor

The filling plants are primary distributors

Secondary Distributor

The secondary distributors are supplied gas and cylinders by the primary distributors (filling plants). The secondary distributors fill a thousand cylinders or thereabout and distribute directly to end users. There is a new set of secondary distributors in Nigeria (these guys are the second type) – they own filling plants of their own which are mini plants, these are 1 MT – 5 MT storage capacity which are typically installed in gas stations. So they normally buy in bulk from primary distributors (the filling plants) about 1 -2 MT using bobtail trucks which they in turn fuel to end users from gas stations.

Profitabilty of Liquified Petroleum Gas (LPG) Business

Cooking gas business is very profitable and you don’t have to break the bank before you can start. With N300,000, you will get your business setup and ready to go with almost everything necessary in place. And this is a big business that anyone who is into it can be proud of.

LPG Properties and Composition

Cooking gas can be measured in litres, kilogrammes and tonnes. 1 kilogramme is equivalent to 1.75 litres and 1 metric tonne is equivalent to 1000 kilogrammes. So 1 metric tone is equivalent to 1,750 litres. Cooking gas cylinders come in different shapes, colors and sizes. The various sizes are 3kg, 5kg, 6kg, 12.5kg, 25kg and 50kg. Also some intermediate sizes could be manufactured based on specific orders.

How to start a LPG Business

Before starting a Liquified Petroleum Gas business one needs to put some things in place and get some documents. The time it takes to set up Liquified Petroleum Gas plants differs, it could take about 2 years depending on the approval process.

The approval process for LPG business involves the following:

town planning approval

Environmental Impact Assessment (E.I.A.) of the site. The EIA must be conducted for both dry and rainy seasons

Getting a fire department approval

Getting a police report

Commencing full engineering, design & procurement assessment

The above mentioned documents would be submitted to the Department of Petroleum Resources (DPR), along with a written application. On receipt of the application, DPR will visit the site to be sure all requirements for the construction of an LPG plant has been fulfilled. Where all these requirements are met by the site, DPR will approve and issue you an Approval to Construct (ATC). This approval grants the owner the permission to start constructing a LPG plant on the identified site.

Equipment acquisition

After getting approval, one can then go ahead to acquire equipment for the liquefied petroleum gas business.

Site construction

Once the equipment has been acquired, the site construction can commence.

The Department of Petroleum Resources (DPR) will visit the site once construction is complete for inspection and certify the design is consistent with proposed plans submitted. They will also witness and sign off on all integrity tests conducted at the plant; following which an operating license will be issued. The process takes about 2 years or more end-to-end. The integrity of the plant itself is a function of the competency and technical capability of both the client and the contractor.

The requirements enumerated above do not preclude foreign investors. It’s a standard operating procedure for both local and foreign investors. For investors, it is imperative they partner with local experts with good industry knowledge, technical knowhow and experience; and who is also versatile with the relevant stakeholders.

Factors to Consider before Starting a LPG Business

Startup Capital – Before starting a LPG business, one must consider the startup capital required for that business. According to experts (people who are already in the business) with a capital of ₦300,000 you can conveniently start one and be able to buy more than 20 cylinders, rent a shop, and buy the initial products. The location however determines the cost of the shop. Locating your business in a highbrow area will cost you more money when compared to a location in a lowbrow area but the cost will be well worth it.

Training – It is important to get attached to any experienced retailers or even depots for about six months to learn the important rudiments of the LPG business. You need to learn how to refill the cylinder, how to transfer, how to change valve. And everything necessary that you must know about the business. You also need to know where and how to buy cylinders.

If you decides to learn in a smart way, you can learn from any of those retailers you see by the roadsides and if you are smart enough, you can get all the knowledge you need there. In anyway, it may take you as much as six months to complete your apprenticeship.

Rent a Shop – The next thing after training is completed and the required knowledge acquired is to go get a shop. The class of people that use cylinder gas cooker are more in the urban area. Almost every part of Lagos is good for the business but some places are better than the others.

Marketing – It is of high importance to employ appropriate marketing strategy to create awareness of your business to people and also to increase your profitability and stay afloat. A business that refuses to engage marketing strategies is doomed for failure and can fold up in no time. It is good to maintain good relationship with customers and show empathy to their needs. Know your customers and find how best to deal with each customers. It’s not just about making sales (one-off sales) but about ensuring “repeat purchases” where the customers comes back after the first time to buy and continues coming back to buy from you. This is what guarantees a business of continuous existence in perpetuity (all other things being equal).

Pricing – As much as possible, offer the lowest of prices. Do not run at a loss or add a high profit margin. Consumers seek to minimize cost as much as possible and would buy from the shop with the lower price. If your prices are too high, customers will run from you. Don’t be too greedy for gain

Competition – After the business has been set up and is running, it is necessary to keep taps on your competitors. Study their moves, and strategize on how to do better than them.

Health and Safety Precautions in LPG Business

The most important health and safety issue in the operations of LPG is the operators – these are the people operating the filling plant. Qualified gas operators are scarce to a large extent in Nigeria to run an LPG plant. Hence, staff hired have little to no training or experience in running an LPG plant. One can decide to have a series of trainings both formal and informal, both on the job and off the job, to ensure our operators are at their best – it really is safer to run a poorly constructed LPG facility with competent operators than to run a properly constructed LPG facility with incompetent operators. The operators come first and are the most important factors even before the facility itself. So just to summarise, the highest significance where safety is concerned are the operators, adequate training and then the quality/ standard of the facilities.

Precautions to be taken when handling a Gas Cylinder.

It is important for one to be very careful when handling gas as it is highly inflammable. The following precautions should be taken when handling gas cylinder:

Gas cylinders should always be placed in a vertical position, unless stated otherwise by the manufacturer.

Cylinders should be restrained securely to prevent them from falling over.

Ensure that the cylinder valves are always tightly closed.

Ensure that the valve is protected by a valve cap to prevent any damage if the cylinder is dropped.

When loading or unloading the cylinders, never drag, drop or roll the cylinder as these can cause major physical damages to the cylinders.

Ensure that the cylinders are always kept in a well-ventilated warehouse with regards to the manufacturer’s ambient temperature standard.

Ensure that the cylinders are always placed on wooden pallet and not on a bare floor.

Prevent direct physical contact among cylinders in storage.

Why one should not be scared to Owning a LPG Business

Pressure vessels (including LPG tanks) are designed and built to sustain their physical integrity under the elements of nature (rain, sunshine etc). People are often discouraged to own and operate LPG skid plants mostly due to the explosive nature of the gas which might be perceived as a threat to lives and properties. However, there are cogent and verifiable reasons why these concerns should not discourage you from owning and operating an LPG skid plant in any location of your choice.

1. Before an LPG skid plant can be sited and installed in a given location, Department of Petroleum Resources (DPR) must carry out a proper Environmental Impact Assessment (EIA) in accordance with the international best standard, followed by calibration test, pressure test and facility integrity test to ascertain the safety compliance limit of the LPG infrastructure. A DPR certificate is issued once all the necessary standards are met.

2. An LPG skid plant comes with a Pressure Relief Valve (PRV) which serves as a vent for built-up pressure. Under a high external temperature (due to a nearby fire incident for instance), the Pressure Relief Valve (PRV) releases the excess pressure fast to prevent the rupturing of the vessel (tank or cylinder).

3. An LPG skid plant has a wall thickness of about 15cm. This serves as a fire and pressure resistance, preventing the rupturing of the vessel (tank and cylinder) under a high and prolonged fire incidence.

4. In accordance with international best standard, an LPG skid plant is filled up to about 85% capacity in order to provide enough space for the thermal expansion of the contained gas when the surrounding temperature increases.

In light of the above, investment in the growing LPG market is the most prudent decision anyone can make, especially as the LPG market in Nigeria is worth over #37 billion annually with about 50% return on investment.

Risks Associated With Running an LPG Business

Having an operator

The biggest risk one would face when running a LPG business is the risk of having an operator who is not knowledgeable enough. Therefore it is of high necessity and importance to conduct initial and ongoing trainings of staff to ensure one has the right operators. Adequate training and competence in plant operations can be said to be the single most important safety factor.

Fire explosion

The highly inflammable nature of liquefied natural gas makes fire explosion a very common risk in the LPG business. However, this risk can be mitigated or even avoided by being at high alert at all times to quickly detect leakages in gas cylinders as these are the major cause of explosion. One also needs to buy good fire extinguisher that can be very handy in time of minor fire outbreak.

Government regulation

Government regulation is another risk in the LPG business. Government is not stable and their regulations and policies are subject to changes in future. Should government decide to increase the price of LPG today, some consumers may find it difficult to take and have to go back to using kerosene or firewood. If that happens, you loose some customers and your sales will drop. However, government is always trying to reduce the price of cooking gas in other to encourage the usage and discourage deforestation.

Government Policies and Incentives on LPG Business

The Federal Government of Nigeria recently declared her intention to inject up to 10 million gas cylinders into the market to help improve safety and deepen cooking gas utilization. The cylinder injection will start under the first phase in 11 pilot states and FCT, with two states from each of the geopolitical zones. The states are Lagos, Ogun, Bauchi, Gombe, Katsina, Sokoto, Delta, Bayelsa, Ebonyi, Enugu, Niger and the Federal Capital Territory. The cylinders will be injected through the marketers. The marketers will be responsible for the cylinders and the exchange will take place in homes and not in filling stations.

The implication of this is that going forward, individuals will no longer own cylinders but cylinders will be owned by the marketers who will ensure that they are safe for usage. This will better guarantee the safety of the users of gas and the society at large. Hence, an opportunity is created for smart entrepreneurs to venture into LPG business as marketers.

The government not only seeks to promote household consumption of LPG gas but to increase LPG usage in agriculture, transportation and manufacturing in order enable the country to reduce CO2 emission by about 20% and create millions of jobs for Nigerians.

The government was targeting the conversion of 45% of about 4 million vehicles in the state to autogas over a four-year period in partnership with marketers.

The government at different levels are pursuing cleaner energy sources for cooking, transportation and power generation.

The Federal Government is working towards opening micro gas distribution channels across all local governments areas in the country.

By Taiwo Olowu, ACA

To learn more how we can help you achieve your vision on starting a business like this, please reach us now on 08023200801, email [email protected] or send us a detailed request by completing our enquiry form

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Please, I want to know more about setting up small size cooking gas plant in Nigeria, especially budgetary estimates including securing regulatory approvals.

Please call 08023200801

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How to Start a Gas Refill Business in South Africa

Entrepreneurial South Africans have many different unique business ideas to consider. One such option is a gas refill business. You see these businesses everywhere around the country – and for good reason.  

Gas refill businesses in South Africa could present a lucrative opportunity. Many South Africans rely on gas for cooking, and these businesses can fulfil both domestic and commercial needs. Gas refill doesn’t require much in terms of special skills and knowledge. You really just need a solid business plan and enough startup capital.   

So, how exactly do you start a gas business in South Africa? And is it a worthwhile business opportunity?   

We’ll break this all down in our guide below.   

How Much Does it Cost to Start a Gas Refill Business in South Africa?  

There are various factors involved in starting a gas refill business in South Africa. This means the initial startup cost for the business can vary quite a bit.  

Generally, a startup investment of around R250 000 is required to start a gas refill business. This depends on the LPG marketer, the storage capacity of the business, your equipment agreement, your working stock, cylinder deposits, and your business plan.   

There are other ongoing costs to consider, such as rent, insurance, and staffing costs. These costs can all vary considerably depending on the location and scale of the gas refill business.   

Is a Gas Business Profitable in South Africa?  

Starting a gas refill business can be a profitable venture in South Africa. Many South Africans rely on LPG gas for cooking, so there is always a demand for refill businesses. Wholesale gas prices also provide sufficient room for adding a decent profit.   

The profitability of the business depends on various factors. As long as you are able to run a gas refill business in an area where there is enough demand, and you are able to fulfil large enough quantities of gas, then the business has the opportunity to be highly profitable.   

It’s also important to note that gas refill businesses can be targeted toward residential or commercial customers. Commercial gas refill businesses require larger units of gas to be fulfilled, but they also have the potential for greater profits.  

Once the gas refill business is up and running, the day-to-day costs of operating such a business are relatively low – especially compared to other business models like a bakery or a shisanyama business .   

With a strong business plan and a location where there is enough demand, gas refill businesses can be highly profitable.   

How Do I Start a Gas Business?  

In order to become an LPG gas distributor in South Africa, you will need to hold the right wholesale license. A DMRE 38 wholesale license is required. The application for this will need to be done through your regional office of the Department of Mineral Resources and Energy.  

To apply for this, you will need to publish a notice of application in four newspapers. To become an LPG distributor in South Africa, you will also need to pay a R500 annual license fee.   

Once the license has been granted, you will need to submit annual business information to the department. This is done through the wholesale license annual information submission form, DMRE 30.  

Beyond the necessary licenses and applications, you will also need to have a reliable wholesale LPG gas supplier. This is one of the most essential steps to starting a gas business.   

Other important steps to starting a gas refill business include finding the right location to operate the business from, investing in enough gas cylinders to match the refill requirements of your business, and coming up with an operations plan for refilling and revolving empty cylinders.   

Other considerations include whether your gas business will do deliveries (in which case you will need the right type of transport), and how you will market the business and find customers.  

If you have an itch to start a business, it’s important to consider the many different options available. Low-cost business opportunities, like starting a sneaker cleaning business , do exist. Or, if you’re looking for something with greater profit potential, then a business like gas refill could be an excellent idea.   

Gas refill businesses exist all over South Africa and the demand for these businesses doesn’t seem to be slowing down. Compared to many other business opportunities starting a gas refill business has a relatively low barrier to entry. When done properly, it could be hugely successful. 

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Gas(LPG) Retail Business Plan

Gas(LPG) Retail Business Plan Overview

This Gas(LPG) Retail Business Plan focuses on the informal retail of Liquefied Petroleum Gas ( LPG) commonly known as Gas. “ Informal “ is in the sense these are comparatively small businesses operating in a relatively relaxed manner as compared to the ‘formal’ like branded petrol stations and their more established agents like supermarkets.

The Gas(LPG) Retail Business involves consumers exchanging their empty gas cylinders with a full refilled cylinder at a fee. The retailer takes the empty cylinder to a wholesaler who r efills it at an agreed price the n sells to the next customer.

Gas retail as of the nature common in estates and smaller towns, where the dealers are independent selling the brands of different oil companies, operate s on a legal grey area. Legalities touching on licensing, wholesale sour ces , equipment, location and setting. The fact that many are ab le to acquire county government business permit licenses, survive and thrive does not sanitize the illegal aspects of t he business, and if the law was to be strictly implemented many of them wo uld be forced to close or realign their businesses.

In no way does this mean that the business is not viable or that there are no retailers operating within the law. Not at all. As you will see in this survey consumption of gas is growing, and opportunities abound in some locations.

Before we get to the actual figures on Capital, Revenue & Margins, Competition & Survival, Consumer Behavior, Tips, Tricks and more a little background of the LPG business in Kenya will be of help in understanding the industry, legal loopholes, possible opportunities and trends.

LPG Industry in Kenya

Trade in LPG is to a very large extent guided by the Energy Act 2009 and regulated by th e Energy Regulatory Commission. Others who have a say in different licensing aspec ts of the business include county governments and state organizations like Energy Regulatory Commission and National Environment Management Auth ority (NEMA).

Prior to 2009 g as cylinders were locked to particular oil companies that marketed them. This was through company specific cylinder valves. For instance a Totalgaz cylinder valve from Total Kenya could only fit a Totalgaz cylinder and so forth.

As a consumer it was not possible to interchange a Total Cylinder with a K – Gas. This meant that if your Totalgaz run out, you had to look for a Total Petrol Station for a refill. If there was a Kenol Kobil Petrol station located a hundred meters from your house and the Total station 2 kilome ters away, then you had no option but to transport your cylinder to the latter in exchange for another.

In 2009 the government through legislation decided that gas cylinder valves were to be standardized. Out went the company specific valves and in came the universal valve which could fit any gas cylinder irrespective of the brand . The standardization was partially in response to pressure from small independent oil marketers who felt without such a move the re was no way they could compete in a market dominated by big wel l funded multinationals.

Majority of the consumers are not aware of cross filling and other workings of the LPG industry . All they want is gas, and conveniently so.

Big oil companies have started pushing for the reintroduction of company specific valves, quoting safety concerns, revenue leakages and tax evasion by the illegal wholesalers. The government has not shown any indication of reversing the 2009 legislation . Perhaps before a blanket reversal there will be more efforts to have the ERC and other regu latory bodies like NEMA and the police reign in on cross refilling and illegal refilling.

Meanwhile some companies have started experimenting with RFIDs to trace the movement of their cylinders; from their depot s to the consumer and back. It’s still early to determine the success of such efforts . Other companies are using universal but self sealing valves, meaning the cylinder protects itself from refilling by other wholesalers. It will take quite some time for these measures to have any impact since many cylinders are circulating within the informal channels.

Despite all the hiccups about 95% of the oil companies who are members of the cylinder exchange pool consider the LPG business profitable. The profits and relatively high in the business will continu e to attract illegalities.

Download Gas(LPG) Retail Business Plan / guide here

Last Updated on September 5, 2022

Home » Business » How to start a profitable gas business in Kenya?

How to start a profitable gas business in Kenya?

Liquefied petroleum gas or LP gas is one of the most utilized alternative fuels used in the world. Moreover, in countries like Kenya, gas business isn’t even an alternative at all as it is the mainstay for heating. And cooking in most households in the country. For those unfamiliar with what it is, liquefied petroleum gas {LPG} is a flammable mixture of hydrocarbon gases used as a fuel in heating appliances.

The gas burns cleanly, releasing very few sulphur emissions, and posing no ground or water pollution hazards.

Hence the popularity as a business opportunity in Kenya that caters to industrial, commercial, and household consumers.

The cooking gas business in Kenya has created lucrative opportunities for resourceful entrepreneurs .

If you have been searching for a profitable venture to sink your teeth into.

Then a cooking gas retail business in Kenya might just be the best option for you.

Market Segmentation

The LPG business market in Kenya involves buying huge quantities of LP gas, storing it in tanks, and supplying it to individuals that use it for domestic cooking.

The benefit of this distribution business is that it’s a low entry venture with fair capital requirements.

And can be completely customized to fit your budget needs and the various personal requirements of your clients.

Not to mention, anybody can start a cooking gas sale and delivery business irrespective of educational background.

In Kenya, the use and supply distribution of LPG is dominated by two primary end-use applications; cooking and lighting fuel in residential and commercial establishments and as process fuel in industrial manufacturing operations.

It is estimate that the domestic sector uses about 65%, while the commerce and industrial business sector accounts for the other 35%.

In the Kenyan market, most of the distributors of cooking gas lack the necessary market information about the rural and remote areas that need their business solutions most.

And as with every successful venture, information on the market size, existing and competing alternatives, supply, and LPG distribution channels, willingness and ability to pay.

And also, current and projected demand are all important factors needed to inform business and investment decisions.

However, only a few have the resources to carry out the needed market assessment to advise or improve their service offering.

Here in lies the opportunity for any determined entrepreneur.

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As a result, there are a number of important factors and important information that you need to take into proper consideration for those interested in starting a gas distribution business in Kenya.

1. Get all the necessary information about the industry

• How is cooking gas measured?
• Where do you buy it from?
• What are the common business challenges sellers in the LPG industry face?
• How do you identify quality LPG?
• And how do you handle your cooking gas cylinders?
• How do you refill a customer’s gas cylinder?
• What are the various types of gas that can be sold, and which is the best?
• What factors affect the local retail price of cooking gas?

You must take all these questions into deep consideration as you need to answer them before starting a cooking gas retail business in Kenya.

After all, knowledge is one of the keys to success in any business.

You definitely cannot jump into an unknown business market and expect to find success easily.

So you must invest time to get the basic insider knowledge about this business.

If possible, you should learn from some of the locally established LPG gas business operators in Kenya.

2. Put together a good business plan

No matter how lucrative a business idea or opportunity might seem, a well-written business plan is an important tool because it will allow you to track your goals as the business starts to grow.

Evaluating business models involves an analysis of various operational aspects required for the success of a business.

These may range from product selection, identifying a customer base, sources of revenue, and financing details.

Formulating a business plan should be the first thing done when starting a new cooking gas business Kenya or any business venture.

It’ll help you see the bigger picture, plan, make important decisions, assess the competition.

Also, potential threats to progress well in advance and improve the overall likelihood of success.

Moreover, a good business plan is very valuable for the future because it helps when trying to attract investors.

So they can determine if your Kenya LPG distribution business in on the right path and worth putting money into.

3. Get the necessary licenses

Before you dive into Kenya’s LPG retail business, you must start to get the necessary licenses for you to operate your LPG distribution business legally.

This is because the LPG regulations that came into force in Kenya this year outlined tough requirements for cooking gas traders, prompting mass closure by retailers.

An excerpt from the regulations passed by parliament in June 2019 states,

“A person who wishes to undertake an LPG business shall make an application for a license to the Authority or its licensing agents in the prescribed manner…”

Moreover, among the new regulations by the energy regulator is that cooking gas cylinder traders must have permission from brand owners.

Failure to which they will be fined Sh10 million ($100,000) or more, a five-year jail sentence or more, or risks the invalidation of their operating license.

To legally operate an LPG distribution business in Kenya, you must officially acquire the following licenses:

ERC Retail License

Among the key conditions, you need to have for your LPG distribution business is a supply contract with a licensed LPG wholesaler.

If the supplier is independent, they must have permission from the oil company to refill on its behalf.

The license for your business will normally cost around Kshs. 5000 and is usually in about a month.

You can apply online through the ERC website .

Fire License

This license is proof that you have taken the required measures to avoid the outbreak of a fire, and in case of one, you can control it.

You should, at the very least, have one readily inspected, fully functional, and certified fire extinguisher.

The fire license is acquired from the Fire Department of the county government and costs typically about Kshs. 3000.

It’s also recommended to acquire this license as a safeguard against harassment from government officials.

A Business Permit

This is the normal business permit issued by the local authorities required to open your LPG distribution business legally.

The price usually is dependant on the area, size of the business, and locality.

Prices average Kshs. 8000.

Weight & Measures Certification

This is certification from the Weights & Measures department that your weighing machine is properly calibrate.

Price averages Kshs. 1200.

KRA Certificate

This is a tax compliance document that shows you are paying your (individual taxpayer or a company) taxes and filing your tax returns.

4. Get the right equipment for your LPG distribution business

Gas cylinders.

Lpg cylinders are the property of the oil marketing companies that brand and Issue them.

The companies usually import gas cylinders from countries like Thailand or purchase them locally from gas cylinder manufacturing companies.

These companies brand the cylinders, fill them with gas, and then release them to the market.

The price of empty gas cylinders usually comes at around Kshs. 800 to Kshs. 1000.

Gas cylinders in Kenya mostly come in 3 sizes:

• 3 kg – This is popular in low-income areas.
• 6 kg – This average quantity is the most popular overall
• 13 kg – Preferred by those of middle and relatively high-end income.

There are other sizes; 15kg, 25 kg, 35kg, 45 kg, 50 kg.

However, these aren’t that commonly purchased as the 3kg and 6 kg gas cylinders took over the mass market as affordable for most low-income households.

In short, the 6 kg gas cylinder is the fastest moving in neighborhood gas retail shops.

You can start with a little of each but with a bias towards the 6 kg LPG version.

You also need to purchase a:

Metallic Cage

This is the cage is to place and display the LPG cylinders.

There is no standard price or single source for these.

Lpg retailers order from local welders and negotiate the price depending on what you would like.

Fire Extinguisher

Fire extinguishers can be from some hardware and motor vehicle spare shops.

Or official fire equipment companies like Nimrod Kenya and Dragon Fire with prices varying on the size.

Standard extinguishers normally go between Kshs.3500 to Ksh.7000.

Digital Weighing Scale

There are various digital weighing machines available with supermarkets and hardware shops stocking them.

Prices start from around Kshs. 15,000 to Kshs. 50,000 depending on the features and make.

5. Find an ideal location

After putting together all the necessary business documents, equipment, and have gathered all the information required.

You need to start to find an appropriate piece of property for your LPG distribution business.

A factor you will need to bear in mind when choosing a location in your market.

You must locate your LPG distribution business close to where there are many potential customers as while kerosene may need to be purchased weekly or even daily.

LPG refills do not need that much frequent travel to buy.

For instance, a business customer could be cooking, and even before the meal, the gas is over.

In such circumstances, the client will want to purchase the gas as quickly as possible and from the nearest seller.

Not to mention the fact that gas cylinders are also bulky and relatively heavy items.

As such, the best places to set up your cooking gas retail store are residential areas (majorly dominated by the middle class).

And near entertainment centers such as hotels, restaurants, and fast-food outlets.

6. Assess and locate a market niche for your business

There already exists a huge demand for cooking gas in the country.

However, there is often a lot of competition in this business because, as previously mentioned, it’s relatively easy to start if you have the capital.

To avoid the crowded marketplace and unhealthy competition.

This LPG distribution business model will work better if you can find dedicated customers or an under-supplied area of town and dominate the supply.

It is in those locales that there is good potential to make more profit.

High-end homeowners are prime examples of customers who can become dedicated to a supplier who reliably delivers good service.

You just need to think of unique ways to differentiate yourself from the competition.

For instance, you can consider creating an online business website to help you get a fix on your target market more accurately & supply customers better.

There are already a few cooking gas distribution businesses in Kenya that have recently jumped on this wave, such as; Kisafi, Vite Kenya & Click A Gas.

You can take a cue from them and set up your LPG gas business in Kenya to also be online to help get a head start on your competition.

7. Transportation and staff

If you would have to deliver cooking gas to customers, then your LPG distribution business will need to get a truck, van, or motorcycle capable of safely hauling cooking gas.

You will also need a few messengers on hand to deliver the gas cylinders.

If you cannot afford to buy a vehicle, you can always lease one each time you need it, pending when you would be able to procure yours.

Keep in mind, and you must ensure that the vehicle in question meets the safety requirements for vehicles hauling hazardous materials such as cooking gas.

8. Marketing and advertising

Marketing involves focusing on direct efforts like advertising and efforts at branding.

Advertising in the Kenyan business market takes some common, easily replicable forms.

One utilizes billboards while another is the placement of stickers in shops, gates, matatus, or any available public spaces.

Other forms of advertising include pamphlets, posters, and in some cases, online classifieds depending on your target customer.

The effectiveness of your marketing strategy largely depends on adopting aggressive marketing strategies and offering attractive discounts.

But as mentioned, what’s even more important is for you to narrow down the target demographic.

It also helps by widening your LPG distribution business and emphasizing how you can offer the potential customer value-added services such as home or office delivery.

Moreover, sales of accessories such as gas cylinders and burners.

The gas cylinder price is an important consideration for customers.

Since July 1, 2020, Kenyans forced to pay a Ksh. 300 higher markup for LPG after a 14% Value Added Tax (VAT) hike hit the gas market.

This came after Kenya’s Finance Bill 2020 removed LPG from tax-exempt goods, bringing a commodity in the majority of Kenyan households to the tax fold.

As such, on average, a 13-kilogram cooking gas used to retail for 2.100 to 2,200 has resulted in an increase to between 2,400 and Sh2,508 from July 1 when the new tax measures came into effect.

As such, price-based business competition is very common of late, especially in low and mid-income areas.

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Moreover, in most cases where the price is too low compare to the competition, customers can end up skeptical about the quantity.

On the other hand, higher prices do not instill confidence that the cooking gas is of the correct amount because of the skepticism that already exists.

It is important to find the right price point when charging your business customers, depending on the area.

10. Excellent customer service

You may have a quality product, but if your customer service is undependable, unfriendly, or just difficult to get in to contact with.

Especially in the given locally that your cooking gas business is located.

Then you can be sure that everybody will hear about it, and you’ll lose customers over it.

Businesses should ensure that customers are not kept waiting or are unable to receive prompt service.

Statistics suggest that cooking gas customers in Kenya tend to switch suppliers if customer support does not swiftly resolve their issues, especially because they are quite a few options to choose from.

Consistency is key in this line of work.

That’s one big reason why investing in good customer service is key to long-term success.

This also involves small things like picking and delivering the gas where applicable.

Especially if you are in an area located far from the customer’s house or if the customer lives on an upper floor of an apartment building.

For instance, your staff must help the customer carry the heavy gas cylinder into the home or even install the new gas cylinder.

Customers tend to take note of such simple things and tend to tell other potential clients as well.

Moreover, you should ensure that your opening and closing times are consistent.

If a customer calls you be it in the early morning or late evening, they must be confident that they will receive the customer service and gas delivery they urgently require promptly and with haste.

11. Availability and Dependability

Among consumers, it’s common that there can be skepticism on whether the cooking gas being supplied is, in fact, of the right and full quantity.

This is mostly due to the many illegal retailers that can be around Kenya’s localities.

While many cooking gas businesses have a weighing scale with which a customer can confirm the true weight of their filled gas cylinder.

Many of them can be skeptical as to whether the scales have tampered with.

Thus, the only true proof that consumers take to prove that the weight is correct is if the gas usually lasts for the duration expected.

It’s vital always to ensure that all your gas cylinders and it’s contents match up to what is expected of them by the customer.

In addition to this, some customers choose to utilize a specific type or brand of a gas cylinder.

In such cases, it pays to have a variety of the most common brands available to give yourself an edge over the competition.

How much profit can I potentially make?

The cost of 1KG of cooking gas from wholesalers is, on average, about Ksh 150, but prices vary from seller to seller.

If the selling price of a 6 KG gas is Ksh 900 to Ksh 1000.

Then you can net yourself a profit of between Ksh 300 and Ksh 400 by reselling it at Ksh 1300.

In a day, your LPG distribution business can normally sell up to 10 6kg gas cylinders, bringing your profits up to a potential Ksh 4000 per day.

But keep in mind that this only accounts for one size, so selling a few 13kg gas cylinders throughout the day could earn you even more money on top.

Ideally, your LPG distribution business can generally generate between Ksh 40,000 and Ksh 70,000 per month just as a small venture.

As more Kenyans migrate to the cities, the demand for cleaner and cheaper fuels like LPG cooking gas continues to grow.

Not to mention, climate change concerns and a growing consciousness to preserve our natural environment will inevitably lead to higher adoption of cooking gas as the preferred fuel for households.

And also, jumping into that business market now is most assuredly prime money-making opportunity for those determined enough.

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The best information I was looking for!

Need to know lpg import price to Kenya

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