Are you about starting an oil tank farm? If YES, here is a complete sample oil tank farm business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting an oil tank farm business. We also took it further by analyzing and drafting a sample oil tank farm business marketing plan template backed up by actionable guerrilla marketing ideas for oil tank farm businesses. So let’s proceed to the business planning section.
If you want to become a big player in the oil and gas industry, one of the businesses you can choose to start is oil tank farm business.
This business stores and supplies motor gasoline, distillate fuel oil, hydrocarbon gas liquids, jet fuel, asphalt and road oil and crude oil to dealers. But you must be ready to compete for market from the 6,295 registered and licensed oil tank farms.
Starting an oil tank farm business is profitable, and it is very easy to start despite the fact that it is capital intensive. Getting the right products that people want to buy and good networking and stock keeping records are the secrets of running an oil tank farm business.
So, if you have decided to start an oil tank farm business, then you should ensure that you carry out thorough feasibility studies and also market survey.
Business plan is yet another very important business document that you should not take for granted when launching your business. Below is a sample oil tank farm business plan template that can help you to successfully write your own with little or no hassles.
A Sample Oil Tank Farm Business Plan Template
1. Industry Overview
Companies in the industry operate bulk crude oil, gasoline and other petroleum products storage facilities for the resale of these products to smaller petroleum distributors, gasoline stations, petroleum refiners and other downstream markets.
If you are a close observer of the gasoline and petroleum bulk stations industry, you will notice that wholesalers are spread throughout the united states, supplying a range of commercial, industrial, government and residential customers.
The relative geographic spread of industry establishments is dependent on the regional demand for and supply of crude oil and petroleum products.
Areas of high population and substantial economic activity demand more crude oil and petroleum products for use in electricity generation, industrial production and for transport fuel. Areas with many highly-trafficked airports conversely demand large quantities of jet fuel.
A report published by IBISWorld reveals that given that the industry serves as a conduit between petroleum refiners and markets further downstream, the industry’s performance is intimately linked to the supply of and demand for petroleum and petroleum products.
Consequently, industry revenue fell sharply at the end of 2014, as collapsing oil prices driven by strong North American production and weak global demand caused a subsequent sharp drop in the prices of industry products.
At the beginning of this period, industry revenue is estimated to have fallen 1.9 percent in 2014, 34.7 percent in 2015 and 9.5 percent in 2016. As a result of the industry’s recent decline, revenue is forecast to fall at an annualized rate of 7.3 percent over the five years to 2018.
The Gasoline & Petroleum Bulk Stations industry is a thriving sector of the economy of the United States of America and the industry generates over $651 billion annually from more than 6,295 registered and licensed oil tank farms scattered all around.
The industry is responsible for the employment of over 89,620 people. Experts project the Gasoline & Petroleum Bulk Stations industry to grow at a -7.3 percent annual rate between 2013 and 2018. BP PLC and Valero Energy Corporation are the companies with the lion market shares of the available market in the United States of America.
Please note that there are a number of barriers to entry into the Gasoline & Petroleum Bulk Stations industry. A major barrier to entry is posed by the large capital and considerable expertise required to successfully establish an enterprise. Regulatory requirements at both the federal and state levels can deter would-be industry participants.
In addition, entry into certain states’ oil tank farm markets is limited to existing companies, at least for some categories of customers. Some of the factors that encourage aspiring entrepreneurs to venture into starting an oil tank farm company is the fact 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.
2. Executive Summary
Baton Merlin® Oil Tank Farm, Inc. is a registered oil and gas company that will be involved in the operation of an oil tank farm.
Our oil tank farm and administrative building will be located in Waco – Texas. We have been able to lease a facility that is big enough to fit into the kind of oil tank farm that we intend launching and the facility is centrally located in a part of the city with easy delivery network.
Baton Merlin® Oil Tank Farm, Inc. will supply bulk crude oil, gasoline and other petroleum products such as motor gasoline, distillate fuel oil, hydrocarbon gas liquids, jet fuel, asphalt, road oil and crude oil from our storage facilities for the resale of these products to smaller petroleum distributors, gasoline stations, petroleum refiners and other downstream markets.
We have robust distribution network, strong online presence and our facility has a very high safety measure in place. Beyond the storage and supply of bulk crude oil, gasoline and petroleum products in the United States, our customer care is going to be second to none in the whole of Waco – Texas and our deliveries will be timely and 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 us.
Baton Merlin® Oil Tank Farm, Inc. will ensure that all our customers are given first class treatment whenever they order crude oil, gasoline and other petroleum products from us. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may grow to.
Baton Merlin® Oil Tank Farm, Inc. will at all times demonstrate 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.
Baton Merlin® Oil Tank Farm, Inc. is a family business that is owned by Baton Merlin and his immediate family members. Baton Merlin has a B.Sc. in Business Administration, with over 18 years of hands on experience in the oil and gas industry, working for some of the leading brand in the United States.
3. Our Products and Services
Baton Merlin® Oil Tank Farm, Inc. will be involved in the storage and distribution of bulk crude oil, gasoline and petroleum products. Our products and services offerings are listed below;
- Sale of crude petroleum, oil
- Sale of liquefied petroleum gas
- Sale of motor gasoline
- Sale of distillate fuel oil (lighter fuel oils and diesel engine fuel)
- Sale of jet fuel (naphtha-type and kerosene-type)
- Sale of residual fuel oil (gasoline and diesel oil, lubricants, paraffin, asphalt and burning fuel) and kerosene
- Sale of naphtha
- Sale of petrochemical feedstock
- Sale of unfinished oils
- Sale of blending components
4. Our Mission and Vision Statement
- Our vision is to become the leading brand in the oil tank farm line of business in the whole of Waco – Texas.
- Our mission is to establish an oil tank farm business that will supply bulk crude oil, gasoline and other petroleum products from our storage facilities to smaller petroleum distributors, gasoline stations, petroleum refiners and other downstream markets in Waco and other cities in Texas where we intend marketing our products.
Our Business Structure
Our intention of starting an oil tank farm business is to build a standard and one stop oil tank farm in Waco – Texas. 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 Baton Merlin® Oil Tank Farm, Inc.;
- Chief Executive Officer (Owner)
- Oil Tank Farm Manager
- Human Resources and Admin Manager
- Merchandise Manager
- Sales and Marketing Manager
- Information Technologist
- Accountants / Cashiers
- Customer Services Executive
- Distribution Truck Drivers
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, appraising job results and developing incentives
- 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 for 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.
Oil Tank Farm Manager:
- Responsible for organizing the safe and efficient receipt, storage and dispatch of bulk crude oil, gasoline and other petroleum products for the resale of these products to smaller petroleum distributors.
- Responsible for liaising with customers, suppliers and transport companies
- In charge of planning, coordinating and monitoring the receipt, order assembly and dispatch of products
- In charge of coordinating the use of automated and computerized systems where necessary
- Accountable for keeping stock control systems up to date and making sure inventories are accurate;
- Accountable for producing regular reports and statistics on a daily, weekly and monthly basis
- In charge of overseeing the planned maintenance of vehicles, machinery and equipment.
- Ensures that proper records of goods are kept and warehouse does not run out of products
- Supervises the workforce in the oil tank farm
Merchandise Manager
- Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
- Responsible for the purchase of supply bulk crude oil, gasoline and other petroleum products for the organizations
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
Sales and Marketing Manager
- 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
- Develops, executes and evaluates new plans for expanding increase sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
Accountant/Cashier:
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements 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 and services
- 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
Distribution Truck Drivers
- Assists in loading and unloading bulk crude oil, gasoline and other petroleum products
- Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
- Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment
- Assists the transport and logistics manager in planning their route according to a distribution schedule.
- Inspects vehicles for mechanical items and safety issues and perform preventative maintenance
- Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
- Reports defects, accidents or violations
6. SWOT Analysis
Our intention of starting out in Waco is to test run the business for a period of 5 to 10 years to know if we will invest more money, expand the business and then start our oil tank farm all around key cities in the United States of America.
We are quite aware that there are several oil tank farms around, 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.
Baton Merlin® Oil Tank Farm, 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 Baton Merlin® Oil Tank Farm, Inc.;
- Strength:
Our location, the business model we will be operating on, varieties of payment options, wide range of products, highest safety measure in and around our facility will definitely count as a strong strength for Baton Merlin® Oil Tank Farm, Inc.
- Weakness:
A major weakness that may count against us is the fact that we are a new oil tank farm 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 oil tank farm business in Waco – Texas provides us with unlimited opportunities to distribute our products to a large number of retailers.
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 products and services; we are well positioned to take on the opportunities that will come our way.
- Threat:
Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power. 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
The trend in the Gasoline and Petroleum Bulk Stations industry shows that performance is intimately linked to the supply and demand of petroleum. Bulk storage capacity for petroleum products has grown closer to full capacity and the Gasoline and Petroleum Bulk Stations industry is expected to return to stronger growth.
External factors such as world price of crude oil and demand from gasoline and petroleum wholesaling will impact industry performance. Lastly, it is now a common phenomenon for oil tank farms to leverage on technology to effectively predict consumer demand patterns and to strategically position their business to meet their needs.
8. Our Target Market
The Gasoline & Petroleum Bulk Stations industry has a wide range of customers; a good number of customers make use of one or all or the following crude oil, gasoline and other petroleum products. In view of that, we have positioned our oil tank farm company to service businesses in Waco – Texas and every other location we will cover in Texas.
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 supply crude oil, gasoline and other petroleum products such as motor gasoline, distillate fuel oil, hydrocarbon gas liquids, jet fuel, asphalt and road oil and crude oil to the following businesses;
- Smaller petroleum distributors
- Gasoline stations
- Petroleum refiners and other downstream markets
- The aviation industry
- Transport companies
- Manufacturing companies that make use of gas powered turbines and other petroleum products
Our competitive advantage
We are aware of the stiff competition in the industry and we are prepared to compete favorably with other leading oil tank farms in Waco – Texas.
One thing is certain; we will ensure that we have crude oil, gasoline and other petroleum products available in our oil tank farm at all times. One of our business goals is to make Baton Merlin® Oil Tank Farm, Inc. a one stop oil tank farm company.
Our ability to pass on cost increases, guaranteed supply of key inputs and the capacity to fully comply with government regulations, 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 achieve all our aims and objectives.
We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Baton Merlin® Oil Tank Farm, Inc. will generate income by offering the following services and products within the scope of the Gasoline & Petroleum Bulk Stations industry in the United States of America. We will generate income for the business by;
- Sale of crude petroleum, oil
- Sale of liquefied petroleum gas
- Sale of motor gasoline
- Sale of distillate fuel oil (lighter fuel oils and diesel engine fuel)
- Sale of jet fuel (naphtha-type and kerosene-type)
- Sale of residual fuel oil (gasoline and diesel oil, lubricants, paraffin, asphalt and burning fuel) and kerosene
- Sale of naphtha
- Sale of petrochemical feedstock
- Sale of unfinished oils
- Sale of blending components
10. Sales Forecast
One thing is certain when it comes to oil tank farm business, if your business is centrally positioned coupled with 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 Waco – Texas and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base.
We have been able to examine the Gasoline & Petroleum Bulk Stations 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 Baton Merlin® Oil Tank Farm, Inc., it is based on the location of our business, and other factors as it relates to oil tank farm startups in the United States;
- First Fiscal Year: $740,000
- Second Fiscal Year: $1.5 million
- Third Fiscal Year: $2.5 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 and customer care services 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 Baton Merlin® Oil Tank Farm, Inc., we conducted a thorough market survey and feasibility studies in order for us to be able to penetrate the available market and become the preferred choice for smaller petroleum distributors in and around Waco – Texas.
We hired experts who have good understanding of the oil and gas 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 Waco – Texas. In summary, Baton Merlin® Oil Tank Farm, Inc. will adopt the following sales and marketing approach to win customers over;
- Introduce our business by sending introductory letters alongside our brochure to smaller petroleum distributors, gasoline stations, petroleum refiners and other downstream markets and key stake holders in Waco – Texas
- Ensure that we have crude oil, gasoline and other petroleum products such as motor gasoline, distillate fuel oil, hydrocarbon gas liquids, jet fuel, asphalt and road oil and crude oil in our oil tank farm at all times.
- Make use of attractive hand bills to create awareness business
- Position our signage / flexi banners at strategic places around Waco – Texas
11. Publicity and Advertising Strategy
Despite the fact that our oil tank farm business is well structured and located, we will still go ahead to intensify publicity for the business.
Baton Merlin® Oil Tank Farm, Inc. has a long-term plan of opening distribution channels all around the state of Texas and other states which is why we will deliberately build our brand to be well accepted in Waco before venturing out. Here are the platforms we intend leveraging on to promote and advertise Baton Merlin® Oil Tank Farm, Inc.;
- Place adverts on community based newspapers, radio and TV stations.
- Encourage the use of word of mouth publicity from our loyal customers
- Leverage on the internet and social media platforms like; YouTube, Facebook, Twitter, LinkedIn, Google+ and other platforms to promote our business.
- Ensure that our we position our banners and billboards in strategic positions all around Waco – Texas
- Advertise our oil tank farm business in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars
12. Our Pricing Strategy
Pricing is one of the key factors that give leverage to distribution companies and retailers; it is normal for retailers to purchase products from companies that they offer cheaper prices. We will work towards ensuring that all our crude oil, gasoline and other petroleum products are 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 products once in a while and also to reward our loyal customers from time to time.
- Payment Options
The payment policy adopted by Baton Merlin® Oil Tank Farm, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Baton Merlin® Oil Tank Farm, Inc. will make available to her clients;
- Payment via bank transfer
- Payment via credit cards
- 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 client make payment for products purchase without any stress on their part.
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 to be creative and productive.
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. As for the detailed cost analysis for starting a oil tank farm business; it might differ in other countries due to the value of their money. These 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 (software, P.O.S machines and other software) – $3,300.
- Marketing promotion expenses for the grand opening of Baton Merlin® Oil Tank Farm, 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 oil tank farm facility in the total amount of $150,600.
- The total cost for oil tank farm facility remodeling (construction of oil tanks) – $20,000.
- 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 crude oil, gasoline and other petroleum products) – $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 for the purchase of distribution vans/trucks – $75,000
- The cost of launching a website – $600
- Miscellaneous – $10,000
We would need an estimate of $2.5 million to successfully set up our oil tank farm business in Waco – Texas.
Generating Startup Capital for Baton Merlin® Oil Tank Farm, Inc.
Baton Merlin® Oil Tank Farm, Inc. is a private business that is solely owned and financed by Baton Merlin 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 $2 million from our bank. All the papers and document 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 Baton Merlin® Oil Tank Farm, 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 supply/distribute our crude oil, gasoline and other petroleum products a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Baton Merlin® Oil Tank Farm, 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 oil tank farm facility and construction of oil tanks: 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
- Purchase of distribution vans: Completed
- 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 crude oil, gasoline and other petroleum production companies within and outside of the United States of America: In Progress