How to Start a Propane Business
If you want to start a propane business, you will need to begin with a detailed plan. This is a big business that you’re opening so adequate preparation is required.
Research the market to identify competition, to find out the laws or rules regarding a propane business, and establish connections.
When heating or cooking, propane gas can be used. It can be used as fuel for portable stoves, barbecues, and engines. If you’re interested to start a new business, this can be a great opportunity. You will not be only catering to residential homes but you can also sell propane to commercial businesses, convenience stores, and grocery stores. This type of business requires huge capital which can reach less than $500,000 but the rewards are great. Now, you should be aware that the costs may vary depending on the tank’s location.
Starting a Propane Business
Among the things you will need are cylinder trucks, cylinders, bulk tank, storage space for the cylinders, and cylinder gas. There is a great deal of paperwork that you should also accomplish. Check with the State Propane Association or SPA to determine the latest rules or regulations about starting a propane business. In this type of business, you need to secure the right insurance policy to protect the business and your personal assets. You also need to visit the municipal government office to apply for the appropriate licenses or permits. Aside from this, you will also need an ID number for tax purposes, which is referred to as EIN (employer identification number).
The new business will look more reputable if you join NPGA (National Propane Gas Association). This will allow you to establish a network of connections especially with dealers. Having a credible business is very important and with the membership, you also have the chance to meet with potential suppliers or dealers to finally launch the business. You will need storage space for the cylinders and you can lease it out with the help of a real estate agent. Now that you know the rules, you can now purchase the needed equipment, supplies, and propane.
For the initial operations, you can purchase around fifty cylinders. When buying the cylinder trucks, you can opt for used ones to cut down the cost. Find a location for the office that is easily accessible to clients. You will need to hire several employees for the office and drivers if you are not the one who’s going to drive the trucks. Decide on the advertising methods that you will use like flyers or business cards. You have to launch a full advertising campaign to introduce your business to the local people. Begin with a comprehensive plan that you can use to secure funding or as a guide in the operations of the business. Conduct thorough research to be sure.
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