Home Business How to Start a Propane Gas Delivery Business in the U.S.

How to Start a Propane Gas Delivery Business in the U.S.

With a projected market value of $225.10 billion by 2030 from $98.50 billion in 2023, it is a clear indicator that starting a propane gas delivery business today is still a profitable business venture.

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Start a propane gas delivery business
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One question that almost everyone interested in the propane gas delivery business has once asked is, “Is the propane gas delivery business profitable?” The answer is yes. This question often comes from a place of concern because of the advocacy and policies for a non-carbon society. Propane gas is still the preferred alternative to electricity in many U.S. families and is also cheaper. Propane gas is not going out of use soon.

Despite the uncertainty, the advocacy and policies project the propane market has continued to increase. In 2022, the global propane market was valued at $88.77 billion and is expected to grow from $98.50 billion in 2023 to $223.10 billion by 2030, at a CAGR of 12.5%.

Read on if you want to know how to start a propane gas delivery business in the U.S. and be successful because you will discover in detail the things you need to ensure you start the right way.

Conduct Market Research

The first crucial step an aspiring business owner must take is to research the market they want to get into. Conducting market research is important and will help you to know if the odds are for or against you.

By researching the propane gas market, you will understand the challenges, risks, needs of the customers, and profitability of the business because you want to make a profit in the end.

Have a Business Plan

After researching the market and understanding the pain points of the business and have decided to go ahead, the next step is to use the data you have gathered to craft a business plan.

Though you have your information, jumping into the business without a plan is like going to a football match without a formation. A business plan will help you break down the journey into steps. With a plan, you will know the actions to take and when to take them. Therefore, take your time to come up with the perfect plan for the business.

Get a License And Certificate

To legitimize your business, you need to get it recognized by the government by obtaining the necessary licenses and certification, for example, a Liquified Petroleum Gas Permit (LPGP). The required license for running a propane delivery business may vary by state; therefore, endeavor to contact the office in charge in your state and get licensed.

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Get Funding and Equipment

A propane gas delivery business can be started on a small scale, but even at that, you still need funds to start. You need funds to acquire the cylinders and delivery trucks and also to rent a space for your station.

You can fund the business solely if you have the means or can get funding from family and friends.

Also, you can obtain a loan from the bank to start your propane gas delivery business if you meet the loan requirements.

After getting funding, you need equipment for the business, like gas dispensers and pumps, cylinders, delivery trucks, and chairs if you want to have a lounge or a waiting space.

Build Supplier Networks

You are in the business to satisfy your customers, and that means having propane available whenever they need it. It is important not to have only one supplier, hence the need to intentionally build the network. You can get suppliers through recommendations from those also in the business or by finding the suppliers by yourself. You can search for suppliers around you, or that can supply to your location online.

Ensure to ask the important questions and do your due diligence before going with a supplier.

Prioritize Safety and Training

Propane gas delivery has its share of risks, and one of them is the highly flammable nature of the product. Prioritize safety and ensure that you and your employees undergo any helpful training that will ensure the safety of the business, workers, and customers.

One of the basic safety measures you should take is making sure that there is always enough fire extinguisher available. Also, educate your employees and customers on the importance of not smoking and using cell phones and lighters while in the station or during delivery.

Have a Marketing Strategy

No business survives without marketing; whether it is organic marketing, for example, word-of-mouth marketing, or through paid advertising, there must be a form of marketing. 

You should have your marketing strategy ready while starting. One of the ways you can market your propane gas delivery without spending any money on advertising is by starting with friends and families. By offering excellent service to your friends and families, you will get referrals. As you continue to render excellent service, your referral base will continue to expand, and that means more customers. 

But if you want to speed up the customer acquisition process, you should run paid adverts. If you want to target only your immediate environment, your best option may be posters and flyers advertising. Since your target is your immediate environment, you can afford to visit the homes and drop your business flyers with them. It will keep your business on their faces.

However, if you want to target those outside your immediate neighborhood, then consider running adverts on radio, TV, and online platforms.

Always Innovate

The propane gas business is continually changing. A quick search on the internet will give you a glimpse into the many changes that have happened just in the past decade.

What differs between the businesses that survive for a few years and those that have lasted for decades is the ability to innovate.

There will always be changes in policies, etc.; therefore, for the business to stand the test of time, there should be consistent innovation. 

Get Advice from Experienced Entrepreneurs

Though challenges are inevitable in any business, the road becomes easier when you have someone experienced in the business guiding you. Their guidance helps you adapt faster in the business because you will know what to and not to do.

It can be in the form of direct mentorship or friendship.

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Conclusion

With a projected market value of $225.10 billion by 2030 from $98.50 billion in 2023, it is a clear indicator that starting a propane gas delivery business today is still a profitable business venture.

To start a propane gas delivery business in the U.S., you should research the market, craft a business plan, acquire the necessary licenses and certificates, get funds and equipment, have suppliers, take safety seriously, have a marketing plan, be innovative and seek advice from experienced business owners. 

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Emenike Emmanuel is a multiple award-winning blogger, CEO of Entrepreneur Business Blog, Chief Evangelist of Ebusinessroom Ventures, and the Lead Coach of an online community of over 12,000 business owners called, The Excellent Entrepreneurs' Network. He’s here to help you start, manage and grow a profitable and sustainable business using digital marketing strategies. Follow him on Facebook, Twitter, Instagram, LinkedIn & Pinterest with this handle, @emenikeng. Telegram group - t.me/yourfirst1000 | Email: [email protected]

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