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Propane Business Idea

If you want to start a propane business, consider this: propane is one of the most popular fuels in the world, and it’s easy to see why. It’s abundant, inexpensive, convenient and clean. It can be used to fuel a gas-powered grill, heat a home or even to warm up the water in a spa or jacuzzi.

Campers are well acquainted with propane, since it’s used to fuel cooking equipment and other outdoor devices. Needless to say, there is an ever-present demand for propane. If you decide to start a propane business and are successful at it, you should be assured a reliable livelihood for many years to come. The following information will give you a basic idea about how to start a propane business.

Start A Propane Business Overview

Since propane is a type of gas, it is heavily regulated. You can’t just go out, buy a few cylinders of propane and set up shop. Licenses, permits and other forms of certification must be obtained and kept current. In fact, the two most difficult aspects of starting a propane business are acquiring the necessary permits and licenses as well as coming up with startup capital.

On average, it costs between $100,000 and $400,000 to start a propane business. Once you secure a business loan and obtain the necessary permits, though, it’s generally smooth sailing.

Equipment, Supplies and Licensing

As noted above, you can’t start a propane business without the appropriate licenses and permits. Such documentation varies by state. The best thing to do is to contact your state’s State Propane Association (commonly known as the SPA). They will be able to point you in the right direction, cutting the amount of research that you will have to do by a significant degree.

Business insurance is an absolute must in this business. In fact, you usually can’t get the permits and licenses that you need without proving that you have the proper insurance. Your local municipal government office should also be able to provide appropriate guidance to the paperwork that you’ll need to sell propane legally in your market.

You’re going to need to rent an area where you can store your bulk propane cylinders, so put that at the top of your list of priorities. Next up, you’ll need cylinder trucks for transporting your propane. Try to find used trucks in order to save some money. You’ll also need ample office space for your administrative functions as well as appropriate retail space.

Finally, you’re going to need a steady and reliable supplier of bulk propane. Contact an organization like the National Propane Gas Association (also known as the NPGA) to get referrals to well-regarded suppliers. Ideally, your chosen supplier’s prices will be competitive and their customer service impeccable.

Finding Customers For Your Propane Business

These days, it seems like propane is sold practically everywhere. Convenience stores and gas stations are two obvious places. Lately, drugstores and other retailers have been getting into the act.

Visit local businesses, marketing the benefits of providing propane. Engage in online advertising, using search engine optimization and other techniques to grab the attention of local businesses. Use direct mail campaigns to let area businesses and residential customers know about your goods and services.

The popularity of propane is only going to increase. As long as you plant plenty of seeds, you’re sure to drum up business over time.

Expansion Ideas

Most likely, your propane business will begin small. Targeting a specific type of customer is usually the best strategy when starting a new business.

However, you can spread your wings and begin supplying propane to different types of customers over time. If you start off supplying propane to campgrounds, for instance, you could eventually start supplying it to local gas stations as well.

By constantly working on expanding your customer base, you shouldn’t have to worry about the well running dry. Once you start a propane business and your business grows, you can invest in more delivery trucks and provide additional products and services to an ever-expanding circle of customers.

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