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How Does One Start a Petrol Station in South Africa?

How to become a supplier of fuel to the public.

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Starting an independent filling station

South Africa petrol stations fall into two categories, independent and franchise operations, both of which are funded in the same way.

Independently owned garages still play a big roll in the South African economy.

According to South African Petroleum Retailers Association (SAPRA), who represents all the stakeholders in the petroleum industry, before a new filling station can be opened, three sets of approvals, authorisations and licenses are needed.

  • Land use rights for purposes of a filling station;
  • An environmental authorisation; and
  • Site and retail licenses.

In terms of the Petroleum Products Act, 1977 (PPA) as amended in 2006, and which is administered by the national Department of Energy, one cannot apply for a site and/or retail license before you have both land use rights and an environmental authorisation.

Existing filling stations are in a particularly strong position because of the PPA which controls the energy authorities to ensure that the number of filling stations is appropriate to local sales volumes and does not exceed the optimal number for an area.

Franchise operations

Engen

Petro companies (Engen, Sasol, etc) offer franchises which include intensive training programmes and stipulations for franchisees. Sasol, for example, will mentor and promote franchisees on a monthly basis and assist the franchisee throughout the process. and visit each month and provide support and guidance.

“It isn’t difficult to get a franchise as long as you have funding. A Sasol filling station franchise costs in the region of R1 million”, says Able Mokoena, Franchise Consultant for Sasol.

“If you have your own site, then Sasol will undertake an inspection of the site before proceeding. Licences are required which are included within the franchise agreement”.

Related: More on the Government Funding Options Available to You

Franchise concept comprise of separate business units

Often, depending on the franchise company, the concept could comprise of separate business units such as the forecourt, a convenience store, a bakery, car wash or a quick-service restaurant. These can be added under certain conditions.

Each business unit has to adhere to individual standards for methods of operation, service levels, management, profitability and continuous training of staff. Most importantly, each unit is regarded as an individual profit centre, and may not be run at a loss and be offset by the other units.

After extensive market research, the franchisor determines which business units are suitable for the particular site and grants a licence to a single franchisee to operate the entire outlet.

Before you sign an franchise agreement understand clearly what franchise royalty fees, penalty clauses, support, training, and requirements you are responsible for or will receive.

The Franchise offers a certain name brand of petrol related products, which are subject to the rules and regulations of the franchisor.

Related: Look at the Complete Picture Before Investing

Make sure that all licenses, agreements, and permissions are in place. These should also be a pre-condition in the purchase offer. Find out where the competition is located, what services they offer.

A business plan is a must

Create a working business plan. Make sure you include a provision on monitoring cash flow. Also, include marketing techniques to promote the filling station. Without one, you won’t be able to apply for funding.

Raising money

There are many different ways to cook an egg and the same applies to raising funds to start a petrol station, or for that matter, any new business. If traditional options such as banks and private funders don’t work, consider the possibility of collaboration with a group of investors. Visit the following links for guidance:

  • Overcoming financial hurdles
  • No capital, no collateral, no problem
  • Where to get the money

The petrol retail price is regulated by government, and changed every month on the first Wednesday of the month. The calculation of the new price is done by Central Energy Fund (CEF) on behalf of the Department of Minerals and Energy (DME).

The petrol pump price is composed of a number of international and domestic elements. The international element, or Basic Fuel price (BFP), is based on what it would cost a South African importer to buy petrol from an international refinery and to transport the product onto South African shores.

Then a number of other elements are added to reach the final price such as Fuel tax, Customs & Excise levy, Slate levy, Retail margin and the Road Accident fund.

Related: Download a Free Business Plan Template Here

Motivation

Africa’s Greatest Entrepreneurs

If you are thinking of starting a filling station you should read Africa’s Greatest Entrepreneurs by Moky Makura, (2008) published in paperback by Penguin Books. It tells the story of T K Mmusi, a man armed with little knowledge or experience, who started a Total petrol station in Botwana.

Its success provided the capital to start Pula Carriers, a logistics company with a fleet of 20 tankers, each one fitted with state-of-the-art technology. Today, Pula Carriers is a major distributor of fuel in Botswana.

Related: How to Start a Fuel Transportation Business

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

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36 Comments

36 Comments

  1. xolani

    Jul 21, 2014 at 13:33

    I Got a very excellent land, on the road but I don’t have that 1mil to buy or to start a filling station franchise.

    • Zeyn

      Jan 8, 2015 at 13:01

      where is this land?

      actual start up cost for Sasol is R4.150million, you need 60% of your own money

      • Jerry Purfz™

        Jan 27, 2015 at 12:37

        Good day Zeyn.

        Do you know more about getting all the paperwork prepared for applying for this type of a franchise? Please get hold of me here: jerry@jerrypurfz.co.za

    • Jerry Purfz™

      Jan 27, 2015 at 12:35

      Yeah… Where’s this land.

    • Seamesh Harrioersad

      Sep 22, 2015 at 12:00

      hi xolani, you can call me on 0727107338 or email me seamesh01@gmail.com

      • Simphiwe

        Dec 12, 2015 at 08:30

        Hi Seamesh, I have an excellent piece of land for a petrol station along a busy provincial route and currently looking for an interested party to establish a petrol station on the site. If you are still in the market fo land please contact me on simphiwemlotshwa@yahoo.com

  2. Rosen Mhlongo

    Apr 10, 2015 at 13:03

    Hi, I am from a rural area in Limpopo, Giyani, Charlie Rhangani Village, and want to know more about getting all the paperwork prepared for applying for filling Station franchise? Please assist?

    • lawrence

      Jan 2, 2016 at 07:20

      I am in giyani too can you call me 0820499552

  3. nqobile

    Apr 16, 2015 at 08:44

    I need to start a petrol station what thing must i do plz help mi

  4. Seamesh Harrioersad

    Aug 5, 2015 at 10:03

    hi xolani whats your contact details

    • Wetsi Derick Moloi

      Sep 7, 2015 at 18:56

      HI Seamesh, please contact me on 0847321006 i have land and great positioning, need help with financing. thanks I am really serious and comitted

      • Anesh Maharaj

        Sep 28, 2015 at 12:26

        Hi Wetsi

        I am from one of the leading oil companies in South Africa. I am looking for prospective land to invest in a filling station. If you have a good piece of land i have the investors. You can contact me on anesh42@gmail.com

      • Bongani

        Oct 14, 2015 at 17:51

        Hi Anesh….I wish you had placed your request earlier. I am currently staying in an area where there is growing business opportunities. Some how one guy (if correct) managed to establish two fuel stations in this area. I just missed it because I had no finance or anyone to help, pity.

        Nevertheless the area is very ripe for business, especially a fuel station as its very populated and still has space available at the center for one more station. Close to taxi’s and local communities.

        Please advice who can I talk to or who can assist. Its sucks if you have an idea and no one or enough money to establish the concept.

      • Bongani

        Oct 14, 2015 at 17:56

        Wanted to take the route of an independed fuel station, however franchise at the moment is still better due to continous training and mentoring programmes.

      • LeboT

        Jan 5, 2016 at 15:57

        Hi Anesh, please contact me on 0741019497

  5. Buyi Lando

    Aug 21, 2015 at 12:08

    Hi….I’m Buyi and I have a land in kzn (rural areas) which is in the main road and I would like to open a filling station as I have noticed that there is a business opportunity in that areas. My email address is Buyiswal9@gmail.com

  6. Sanele Mtshali

    Aug 31, 2015 at 16:42

    I am a management consultant. I have a client who wants to remove a certain company’s tanks and replace with a new one. I am busy trying to find the how, paperwork and money involved. I am guessing this is a new franchise altogether.

    • Anesh Maharaj

      Sep 28, 2015 at 12:18

      Hi,

      I am from one of the leading oil companies in South Africa. I am looking prospective land to invest in a filling station. If you have a good piece of land i have the investors.

      • Sanele Mtshali

        Sep 28, 2015 at 13:27

        Please specify if you are seeking land for sale so you can establish a filling station or you looking for someone who owns land that can be used for such purposes. If the latter is correct than how would that person be compensated?

        I can help you find land only if we come up with a plan in terms of compensation and criteria.

        Thank you

        *Sanele Mtshali*
        Cell: 076 122 3199
        E-mail: *mtshalisanele@gmail.com *

      • Anesh Maharaj

        Sep 28, 2015 at 14:06

        We can do it either way. For the person who owns the land there is a development rental that can be organized

      • LeboT

        Jan 5, 2016 at 15:55

        Hi Seamesh,
        Please contact me, I have sent you an email with my contact details

      • Sydney XV Mck-o

        Jan 10, 2016 at 18:32

        Please get hold of me via email. sydneymakololo@hotmail.com

  7. Sipho Khanyile

    Sep 7, 2015 at 17:08

    We a land to start a petroleum station in KZN North, where to start?

  8. jabu

    Sep 8, 2015 at 12:48

    Any one who needs help with getting paperwork and sourcing of finance for a new filling station can contact me on 0621354473. We can assist with business planning, market research, EIA application, site licenses, and application for finance.

  9. Rahiim Phillip

    Nov 6, 2015 at 08:52

    Hi All, Please feel free to contact me regarding diesel Supply. I am an independant supplier of diesel and i am sure we can work out a rate that would be mutually beneficial. Please email me: ray.phillip@live.co.za

    • lawrence

      Jan 2, 2016 at 07:21

      Hello I want to have a filling station can you be my potential diesel supplier

  10. Anesh Maharaj

    Nov 13, 2015 at 19:54

    Hi
    I am from one of the leading oil companies in South Africa. I am looking for prospective land to invest in a filling station or existing service stations WITH land for sale. I will also be interested in white / de-branded sites with land for sale. I can be contacted on anesh42@gmail.com

  11. Anesh Maharaj

    Nov 27, 2015 at 12:59

    Hi
    I am from one of the leading oil companies in South Africa. I am looking for prospective land to invest in a filling station or existing service stations WITH land for sale. I will also be interested in white / de-branded sites with land for sale. I can be contacted on anesh42@gmail.com

    • Anesh Maharaj

      Dec 21, 2015 at 11:24

      Hi
      I am from one of the leading oil companies in South Africa. I am looking for prospective land to invest in a filling station or existing service stations WITH land for sale. I will also be interested in white / de-branded sites with land for sale. I can be contacted on anesh42@gmail.com

  12. _missmajola

    Jan 5, 2016 at 13:56

    I need more info concerning a petrol station franchise. Who do I communicate with? How do I get ahold of them,amongst other things. I can be contacted on TSmangele.Majola@gmail.com
    Thanks

  13. tumelo

    Jan 10, 2016 at 10:57

    Good day. I also want to start a filling station but I just want to know how to obtain the license? Iam from bloemfontein. My email address: moipone.m@webmail.co.za

  14. Sanele Ndabayakhe Vilakazi

    Jan 11, 2016 at 18:51

    I’m Sanele, I have a land which is very busy near the main road n a mini circle, so I want to stat a petrol station, can I get some help people… Email at sanelevilakazi0@gmail

  15. Zukisani Sithetho

    Jan 24, 2016 at 15:28

    Hi, I want to know more about getting all the paperwork prepared for applying for filling Station franchise? Please assist.

  16. Anesh Maharaj

    Feb 5, 2016 at 21:50

    Hi
    I am from one of the leading oil companies in South Africa. I am looking for prospective land to invest in a filling station or existing service stations WITH land for sale. I will also be interested in white / de-branded sites with land for sale. I can be contacted on anesh42@gmail.com

  17. Thabiso Destan Ndlela

    Mar 29, 2016 at 17:13

    how many square meters is needed to be able to build a garage?

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How To Start A Farming Business

Keep these nine points in mind when launching your new farming business.

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How Do I Start A Security Company In South Africa?

There are two kinds of security companies, one that sells products and one that sells services or you can combine both.

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To start a security service company in South Africa you must register with the Private Security Regulatory Authority (SIRA). There are two kinds of security companies, one that sells products and one that sells services or you can combine both. It is estimated that the private security industry in South Africa employs over 400 000 individuals.

If you’re looking at starting a security guard company in South Africa, the following guide will be able to assist you in the deciding if it’s the right decision for you.

You need a lot of capital

Starting a security business requires a good deal of capital outlay and it’s highly recommended that one should have a background in this field.

Decide what kind of company you want to start

There are two kinds of security companies, one that sells products and one that sells services or you can combine both. Each sector falls under its own regulatory body.

What about area competition?

Greg Margolis is the CEO of NYPD Security, a niche security company that has operated for the last five years in the leafy northern suburbs of Johannesburg.

“To run your own security service company I think that you have to be well rounded in terms of not just being a good business person, but you also have to be a people person, a marketing person and know a good deal about the business.

“There’s tough competition, but I love what I do and wouldn’t sell my business even if I was offered triple what its worth. I am passionate about what I do”, says Margolis.

Starting a Security Services Business

To start a security service company in South Africa you must register with the Private Security Regulatory Authority (PSIRA). This includes paying a registration fee of R2 280 and writing an exam. Once you have passed the exam, proved that you do not have a criminal record, SIRA will conduct an inspection to establish whether or not your business meets the infrastructure requirements. A further fee of R1 710 is charged for the assessment. Each year the business is re-accessed which costs a further R500 plus the annual renewal fee or R520.

The following documentation is required for registration:

  1. An authenticated copy of the CM1, CM2, CM27, CM29, CM31 and CM 46 (apply at Registrar of Companies or Attorneys), if the applicant is a company;
  2. An authenticated copy of the Partnership Agreement if the applicant is a partnership;
  3. An authenticated copy of the trust deed and the letter of authorisation to the trustees from the Master of the High Court if the applicant is a business trust

Related:Steps for Setting the Right Prices for Your Security Business

Also required:

  1. The Suretyship form (SIRA 4) to be signed by the natural person who has taken full responsibility of the security business
  2. Every director, member, partner (as the case may be) applying for registration as a security business must have successfully completed, at a training establishment accredited in terms of law, at least, the training courses Grade E to B
  3. An authenticated copy of the Tax Clearance Certificate from the South African Revenue Service (SARS)
  4. An authenticated copy of the VAT Registration Number from SARS.
  5. An authenticated copy of the PAYE number from SARS
  6. An authenticated copy of the COID number (Compensation for Occupational Injuries & Diseases) from the Department of Labour
  7. Sufficient information in writing to enable the Authority to ascertain that the applicant security business meets the requirements with regard to the infrastructure and capacity necessary to render a security service;

This include, inter alia, the following:

  1. Submit a business plan to the Authority including the location and activities
  2. A resolution by the applicant security business stating that it will be able to operate for the next year
  3. The applicant proves that it has an administrative office that is accessible to the inspectors of the SIRA
  4. The applicant must have equipment which is necessary for the management and administration of the security business, e.g. fixed telephone, fax machine, a hard copy or electronic filing system for the orderly keeping of all records and documentation
  5. Show that the affairs of the applicant security business are managed and controlled by appropriately experienced, trained and skilled persons
  6. The applicant security business has at its disposal a sufficient number of registered and appropriately trained and skilled security officers for the rendering of a security service for which it has contracted or is likely to contract
  7. The security officers must be properly controlled and supervised
  8. The applicant security officer has at its disposal sufficient and adequately skilled administrative staff members for the administration of the affairs of the applicant
  9. The business must have has all the necessary equipment, including vehicles,  uniforms, clothing and equipment that must be issued to its security officers
  10. The applicant security business is in lawful possession of the firearms and other weapons that are necessary offer security services in respect of which it has contracted.

Related: Get going with a One Page Business Plan

Landing contracts

security-contract

The most important thing you can do to start and operate your own business is to develop a good business plan.

It’s invaluable because the business plan forces you to come to terms with your business. Selling the business concept seems to the problem, said Margolis. These are his five tips that will help to get the business going.

“The security industry in South Africa is very competitive. You have to get out there and you have to keep knocking on doors, there isn’t an easy solution”, explains Margolis.

Top Tips

1. Look at your business plan and decide if you have a competitive advantage. If not, work out how you can make the market understand the unique value your small business has to offer.

2. It is important to make yourself known. It isn’t difficult or expensive to increase awareness about the business. Attend ratepayer meetings, spend time at the local police stations, and attend meetings the police have with residents and businesses in the area. This way people get to know you and respect you and half the battle is won. Networking is the way to go.

3. It’s my experience that bigger companies are reluctant to give security contracts to a company that is a one-man show. Make sure that you have a structure in place. Clients need to know if something happens to you, the business will not fall apart, and the services they have paid for and you have agreed to supply, will not cease. Clients need to understand that besides experience, that you are credible and that all the checks and balances are in place. This must be one of the key selling points.

4. Consider taking on a partner. Choose a partner who has the attributes that you lack. The ideal partner would be one with strong links and contacts in the community that you want to work with. Let your partner control the selling side while you handle areas you’re strong in, such as expertise and service delivery. The other option is to employ sales staff.

5. Stay abreast of new trends in the field, and update your skills. This is something that I strongly believe in. You have to be well rounded in terms of not just being a good businessperson, but you also have to be a people person, a marketing and sales manager and know a good deal about the neighbourhoods you work.

 

Are you new to starting a business? Read 15 Things Every Newbie Needs to Know About Starting a Business

Security products

What are the requirements to start a security product supplier business?

If you are starting a security company that sells electronic alarm systems and other security products it’s wise to become a member of SAIDSA in order to provide your business with the credibility it needs to be taken seriously by the public and security service providers.

The objective of SAIDSA is to upgrade the quality and standards of electronic security and to protect the public from unscrupulous, “fly-by-night” operators. When a security system is purchased, an ongoing relationship is entered into between the purchaser and the security service company concerned.

The security service product supplier must have the infrastructure and the required expertise to support the relationship continuously.

Security Sector Regulatory Bodies

The security industry has established a number of bodies to regulate itself. Membership in these bodies is voluntary. They include:

Ready to get going? Here’s 10 Steps to Start Your Business For Free (Almost)

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How Do I Start A Transport Or Logistics Business?

An all in one guide to starting a transport and logistics business.

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Thinking about starting a transport business?

Forecasts indicate that the demand for freight transport will grow in South Africa by between 200% and 250% over the 15 to 20 years.

Some corridors, (high volume transport routes that connect major centres), such as the corridors between Gauteng and Cape Town (which amount to 50% of all corridor transport) will increase even faster.

The scope in the transport and logistics industry is varied – from a one-man show using a small truck to transport goods and offer services, to a fleet of transport vehicles which travel the length and breadth of South Africa’s roads.

Road transportation includes commuter transport from taxis to bus transportation.

It can be a tough industry and there are many threats facing transport businesses but if you get it right, you can build a successful business.

What is covered in this guide:

  1. How to start your transport and logistics business
  2. How to get funding for your transport business
  3. What are the costs involved
  4. Finding customers and getting transport contracts
  5. Getting onto suppliers lists
  6. Buying trucks and employing drivers
  7. What are the regulations and risks
  8. Where to find guidance to start your business.

Ready to get going? Click the arrow button to learn how to start your own transport business.

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