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Posted on 10/06/2021 in Business

How to Open a Gas Station Business in Jamaica


How to Open a Gas Station Business in Jamaica

How to Open a Gas Station Business in Jamaica

Opening a business in Jamaica comes with lots of regulations and formal steps. This important information may be had from our Companies Office of Jamaica after you have done your due diligence in setting up the business. The Companies Office of Jamaica is where you register your gas station business. Here is the link for their website which you will find very informative: https://www.orcjamaica.com

 

Setting up Your Gas Station Business

Many persons do not know and understand the work that needs to be invested in setting up such a business. We know that persons will need gas to run their vehicles, and it is a profitable enterprise to venture into. But, the detailed steps are what I am going to share with you on what needs to be done.

Choosing the Location

We may have a piece of land, and because we have the vision of starting a gas station business we think the location is appropriate. This may not be the case, as you have to get approval from the Town and Council Planning Authority, located at your Parish Council. The application for use of your land must fall within accordance with the regulatory standards stated by them.

  • Stations should be located within a growth center or an urban area where it can be shown through appropriate studies that the need exists 
  • The location should be a minimum of 500 ft. from any public institution such as schools, churches, public libraries, auditoriums, hospitals, public playgrounds, etc.
  • Wherever possible, stations should be erected on level rather than sloping land to prevent rolling off or discarded materials such as cans, drums, etc.
  • Environmental impact on streams, lakes, ponds, aquifers, etc., will be taken into consideration. An Environmental Impact Assessment may be required from the applicant.

 

These are just some of the regulatory requirements, by law, that an applicant needs to produce on applying for a license to open a gas station. The listed regulation in the NEPA Government Document contains 29 such requirements. There are also added guidelines for the applicant. 

Here is the link for more information: https://www.nepa.gov.jm/new/services_products/guidelines/docs/PlanningCriteriaLocationPetrolFillingStation.pdf

Doing a Business Plan

A detailed business plan must be done. You will have to sit with your accountant to determine if your estimation of financial expenses and income are viable. You will have to detail the facilities you want to erect, like the number of pumps, convenience store, the number of restrooms, carwash service (If you have the vision for such), air pump service, and lots more. The business plan must have a feasibility study based on possible competitors within your chosen location. The management structure of the business is also very important, should you choose to hire someone to manage the business, or you will be the one doing so. 

 

Will you be going into the business as a franchise, or as the sole proprietor? Getting involved in a franchise agreement is complicated. You will need to ensure your lawyer goes through the contract with a “fine-tooth comb” before signing on the dotted line. Many franchise contracts are drawn up with the franchisee not gaining much from the signing. There are percentages in monthly fees from sales that may not be beneficial to you, the business owner. There may be some clauses that you may not fully understand, and which may not be to your benefit.

 

Because many franchises’ are operated by big companies, do some investigation from other business owners within the franchise to get an understanding as to what you may be getting into. 

If you will be the sole proprietor of the gas station, please bear in mind a lot of the legal matters are going to be your responsibilities, so you will have to learn quickly. The lawyer you engage is your only defense in many cases, so solid advice is very important. 

Make a Budget

This is very important. You have to make a list of everything that entails spending. Remember you are dealing with the lifeblood of your business, so you have to be able to account for every penny. Your budget must have:

  • Cost for land if you are buying or leasing
  • Cost for the established gas station; if you are buying one
  • Legal fees for contracts, and lawyer’s fees to do the needed legal documents
  • Consultation fees
  • Advertising cost, banners, and signs
  • Cost for inventory; this includes cost for gasoline, etc. delivery, snack counter stock, delivery cost for all these
  • Estimated built-in budget to start a business
  • Salaries for employees and overheads; utilities etc

 

The above list based on the different agencies will be able to give you the needed information:

  • Petrojam: gasoline prices
  • NWC (National Water Commission) for water
  • JPS(Jamaica Public Service) for electricity

 

Depending on the kinds of stock you will have in your convenience store if you will be selling alcohol, and cigarettes, you will need a license for selling them. The relevant application applies, so this needs to be in your budget.

 

Financing for Your Gas Station

If you own the land you wish to have the gas station business, you will need financing to build and all the other inputs. If you are purchasing an established business you will also need financing. The information on applying to the financial institution will require you to provide documentation like your business plan, property ownership or leasing, franchise agreement (if any), as well as the other requirements the financial institution asks for.

Obtaining financing for opening a gas station anywhere in the world is difficult. You may have all the requirements, and still, have some hitches to deal with. If this is your dream or business opportunity, the above information will help greatly.

 

 

 

 


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