How to Run a Successful Service Station Business
As a service station business owner you do not have to be reminded of :
- How challenging it is to run and manage your service station business in what is commonly known as being a very competitive industry; and
- How important it is to the success of your business, that you get to know who your competitors are.
As if it is not enough that you have to address the above challenges, you are also required to address a number of other challenges such as:
- Fluctuating petrol/fuel prices;
- Inflating overheads; and
- Safety aspects.
Seeking Expert Advice and Assistance
As an owner/operator of a service station business, it is important to the success of your business that you fully understand how the various business management processes can work for you and your business.
In saying that, it may just be that you don’t have enough time to fully implement any or all of the business management processes.
With this in mind, you can be comforted by the knowledge that our expert business consultants are willing and able to offer you assistance and guidance in a number of key areas such as:
- Formulating your Marketing Strategies;
- Formulating your Service and Selling strategies;
- Benchmarking the operation of your business against your competitors;
- Setting your Business Goals and Objectives;
- Your Cash flow Management and Planning processes;
- Business Forecasting; and
- Defining and Measuring the Success of Your Business.
Formulating your Marketing Strategies
The main purpose of formulating your marketing strategy is to maximise the performance of your service station business.
The foundation for building a clear coherent marketing strategy plan for your service station business should include a description of each strategy and the main goals you wish to achieve. For example, these can be but are not limited to:
- Increasing your market share (the number of customers entering your service station).
- Increasing the customers share of spending (the amount of money each customer spends in your service station).
- Changing your product mix (sell more profitable products).
Formulating Selling and Service Strategies
Using selling strategies to provide after-sales service should help increase the dollar value of your sales. These selling strategies can include:
- Thanking your customers for their business.
- Suggesting additional products that relate to the product your customers are considering or purchasing.
- Give your customers free product samples and related information and above all, be enthusiastic about the benefits of these product samples.
- Adding customers to your business mail or Email list and then implementing a Customer Loyalty Program.
- Confirming sales or delivery arrangements verbally or by Email.
In effect, benchmarking means comparing the operation of your service station business to other similar businesses, and then, establishing a performance level that you try to reach. To put it another way, benchmarking allows you to distinguish those business areas that are doing well from those that need improvement.
It is important to realise, that any of the following benchmarking methods can help in benchmarking the operation of your service station business against your competitors:
- Identifying business processes that are measurable and that exist in other similar businesses.
- Conducting surveys that will indicate to you which business is performing the best (i.e. this level of performance is then typically chosen as the benchmark).
Remember. It is important to remember that the above-benchmarking methods can enable you to:
- Determine why the performance of your business is not as good as your competitors; and
- Take measures to improve the performance of your business.
Setting Business Goals and Objectives
In order to meet your business goals, you should define them as precisely as possible and then create a series of specific objectives to reach them. Setting clear, well-defined business goals will help improve the overall effectiveness of your service station business in a number of ways. For example:
- You may want to “increase” your share of the market; or
- You may want to “improve” your customer service relationship.
Your business objectives may be, but not limited to the following examples:
- Capturing an increasing share of the commuter traffic passing through your area;
- Offering customers superior products at an affordable price;
- Providing customer service that is second to none.
Remember: The more carefully you define your business goals, the more likely you are to achieving what you want your service station business to accomplish.
Cash Flow Management and Planning
It is widely known that “Good cash flow management will ensure that businesses always have money available for paying their expenses when they are due”.
Planning and Monitoring your business’s cash flow, is vital to the success of your business.
With this in mind, you need to plan your business’s cash flow so that you do not end up in the following situations:
- Not having enough money available to pay for merchandising products;
- Insisting that your customers pay in cash, thereby losing your customers to your competitors who will let them pay by credit;
- Not having enough cash to pay for overheads such as bills, rent, etc.
It is equally important, to monitor your business’s cash flow. This involves having to:
- Record your actual cash flow for the month; and
- Compare the actual amounts against your budgeted estimates to see if you are tracking as planned.
When used properly, business forecasting can be a very effective management tool for you to use. For example, business forecasting can:
- Help you in estimating/predicting your business’s growth. It can also help your business in a number of other ways such as:
- Guide you in your decision-making, particularly in relation to where you want your business to be in the future;
- Give your business a competitive edge over your competitors;
- Help you to plan ahead of your business’s needs;
- Help you identify where you can tighten up your business’s expenses;
- Help you identify where you can expand your business’s sales; and
- Help your business to be better placed when it comes to responding to any future opportunities and challenges.
Reminder: Your business forecasting should also tie in with your business planning.
Defining and Measuring the Success of Your Business
When defining and measuring the success of your business, you need to understand the term Key Success Factors and more importantly, you need to understand why they are important to the success of your business.
Firstly, Key Success Factors can be defined as being those core elements of your business’s operations that are necessary for your business to achieve its mission.
Your business plan must contain a list of key success factors.
Here is a list of key success factors you can include in your business plan:
Sell Each of Your Business’s Products at a Profit
This involves evaluating each and every product that you sell and then, determining if you are selling these products profitability. If not, you may need to determine:
- If you should reduce your costs for any products, or
- If you should increase its price.
Develop New Products While Maintaining the High Quality of Existing Products
Ensure that your products are created or chosen in response to the needs of your customers. You can do this by customer feedback or by direct interaction with your customers. This will enable you to find out what your customers expect from your business.
Continue to Reduce Overheads and Costs
A lower overhead should be a continuing objective for your business. You can cut costs by:
- Evaluating your insurance needs;
- Reducing your reliance on outside consultants and service providers; or
- Cutting down on unnecessary supplies and equipment.
In summary, we trust you have found this information to be beneficial and that you now know what the ingredients your service station business needs to make it successful.
Contact Us Today
If you require more information or assistance, please call our “consultants” today on 1300 4 SINGH, or simply click here to send your question.
DISCLAIMER: This blog post is of a general nature only and does not constitute professional advice. I strongly recommend that you seek your own professional legal and accounting advice in relation to your particular circumstances.