EXECUTIVE SUMMARY
The Business Concept
GAS & FOOD, LLC (GAS & FOOD or the Company) is an independent gas station and convenience store. The store is branded as a VALERO gas station and convenience store selling dry groceries, prepared food, and lottery tickets. The Company is located in CITY, STATE.
GAS & FOOD offers convenience, accessibility and a variety of products in a neighborhood location. It is open 24 hours a day and offers competitive gasoline prices. The convenience store offers a diversified selection of products. The location of the store is ideal because it is in a busy area and provides easy access by customers.
Excellent Market Opportunity
GAS & FOOD is located in an area that has great need for its services and products. The area has a high concentration of local workers who regularly pass the store on their way to and from work. People use the store not only to buy gasoline, but also to purchase food and convenience items. With speedy and reliable service, GAS & FOOD is an ideal place for customers to stop and acquire their needs. Seven days a week, 24 hours per day service, allows customers to stop by at any time day or night. The wide selection of products and competitive pricing keeps them coming back.
The store is situated in a working class, high-density community. There are changes taken place in the area as more businesses are opening and more residential home purchasing occurs. There are government facilities as well as a school nearby. Competition has not been aggressive and no serious competitors are near the station.
Profitable Growth
GAS & FOOD expects to gain a profitable market share within a very short period of time. Determinations have been made for the size of the market, amounts of budgeted advertising and promotional dollars, the number and kinds of distribution channels and the competitive landscape.
Projections call for the Company to generate revenues of $2.8 million in its next twelve months. GAS & FOOD will achieve good growth over the next several years, reaching $3.0 million in revenues and more than $17,000 of net income by the fifth year.
The Opportunity
Gasoline/Convenient Store Industry
Over the years, service stations found a way to profit from consumers coming inside to pay for their gasoline purchase by adding convenience items such as maps, cigarettes and sodas. Later additional grocery items were included on the station’s product menu.
Today’s stations offer everything from snacks, sodas, specialty coffees, pharmacy goods and clothing items. Margins on these goods far exceed those in the cutthroat gasoline business, and station owners thrive on them.
According to current research the convenience store (c-store) market reports sales of over $200 billion; the industry has approximately 60,000 businesses (with and without gas). Numerous oil companies are associated with this market.
Because the industry is highly fragmented, the 50 largest companies hold less than 40% of the market. First Research states, “About 70 companies operate 100 or more stores. The average store has annual sales of about $2 million.”
This industry reflects a competitive landscape; however, driver demand determines the volume of sales. Convenient store/gas station location is closely linked to profitability. Research shows store sales typically breakdown to:
Impulse buys are a large part of convenient store revenue; a typical store offers from 500 to 1,000 different items. Square feet averages 2,000. Most gasoline/convenient store businesses have 3-4 gassing pumps that store an average total capacity of 30,000 gallons. 1
The association for convenience and petroleum retailing, (NACP) and TDLinx, a service of The Nielsen Company, reported in a 2007 research publication titled, “NACS/TDLinx Official Industry Store Count” that the number of convenience stores in the United States grew 3.2% in 2006 standing at 145,119 facilities, by 2007 stores had grown to 145,600.
As stated earlier, in the United States, convenience stores account for the majority of motor fuel sales; a total of 79.2% of convenient stores sell motor fuels. TDLinx executive vice president and general manager, Scott Taylor stated, “The convenience channel continues to evolve quickly to meet the needs of the consumer.”
Consumer convenience demand remains strong in America, in all retail sectors. In 1996 there were 104,600 convenience stores in the U.S., in comparison by mid-2007 the total had grown to more than 145,600. In 2005 the U.S. convenience store industry reflected total sales of $495.3 billion; $344.2 billion in motor fuels sales.
The convenience store industry report stated: 2
w Top 10 states with convenient stores (with and without gasoline):