Category: Business
Reading Time: 15 minutes
Background:
This article focuses on the business idea for an LPG dealership. This was prepared 7 years before and it was lying in my business IDEA bucket and thought to share it here.
Source of Information:
Eligibility criteria as defined in the source of information websites
| Eligiblity Criteria | Explanations |
| Indian Citizen | |
| Graduation in any field | |
| GP Category : Age between 22 and 59 Other Category : Age between 22 and 44 | |
| Not be a family member of an employee of Oil Marketing Companies as on date of application. | |
| Fulfil Multiple dealership/distributorship norm – Means (i.e.,) only one Retail Outlet will be allowed to a Family Unit | |
| Have minimum total amount of ’15 lakhs for Urban Markets’ and ’10 lakhs for Urban-Rural & Rural Markets’ respectively as the closing balance on the last date for submission of application as specified in the advertisement or corrigendum (if any). | This amount is to be arrived at by adding: Savings Bank accounts in: Scheduled Bank/ Post Office Free and unencumbered Fixed Deposits in: ( i.e., NO Debt or Mortage ) Scheduled Banks, Post Office, Listed Companies / Government Organisation / Public Sector Undertaking of State and Central Government, Kisan Vikas Patra, NSC, Bonds, Shares of Listed Companies, Listed Mutual Funds, ULIP, PPF Surrender Value of Life Insurance policies in the name of Applicant or family members of the ‘Family Unit’ of the Applicant . |
| In case of ‘SC/ST’ category, minimum total amount of ‘5 lakhs for Urban Markets’ and ‘2.5 lakhs for Urban-Rural & Rural Markets’ respectively as the closing balance on the last date for submission of application as specified in the advertisement or corrigendum (if any). | |
| Should own a plot of land of adequate size: – Within 15 KMs from municipal/town/village limits of the location offered – Construction of godown for storage of 8000 Kg of LPG in cylinders or ready LPG cylinder storage godown as on the last date for submission of application as specified in the advertisement or corrigendum (if any) – The floor area of the storage shed for storing 8000 kg LPG in cylinders should be 80 sq metres. – The length of the storage shed should not be more than 1.5 times of width of storage shed. – Minimum safety distance of 7 metres between storage shed and the boundary wall/ fencing – The plot of land with minimum dimension of 26.15 metres by 27 metre is adequate – It should be freely accessible through all weather motorable approach road – The land should be plain, in one contiguous plot, free from live overhead power transmission or telephone lines. – Canals / Drainage / Nallahs should not be passing through the plot. – The land for construction of LPG godown should also meet the norms of various statutory bodies such as PWD/Highway authorities/Town and Country Planning Department | “Own” means having ownership title of the property or registered lease agreement for minimum 15 yrs in the name of applicant / family member as defined in multiple distributorship norm of eligibility criteria. Total land 26.15 X 27 = 729 Sq Metres (Approx) = 18 cents (Approx) Storage room 80 Sq Metres = 2 Cents (Approx) = (Length <= 1.5 Width) 8000 KG LPG (Approx 565 cylinders) From Fencing to storage room 7 metres = 22.96 feet One Square Meters is equal to 0.0247105407259 Cent |
| Own a suitable shop of minimum size 3 metres by 4.5 metre in dimension (or) Plot of land for construction of showroom of minimum size 3 metres by 4.5 metre at the advertised location or locality mentioned in the advertisement | 3 X 4.5 = 13.5 Sq Metres (Approx) = 0.33 cents |
| In addition to the Godown for storage of LPG cylinders and Showroom, Delivery Vehicles will be required for effecting home delivery of LPG cylinders in the authorized area of operation. |
Few risk factors to be considered (or) to be taken in to account before you even think of starting this business:
| Description | Risk Factor | Reasons |
| Every quarter targetted minimum connection has to be met at any cost. | HIGH | Monthly expenditure has to be considered. CANNOT BE MITIGATED considering the business profit |
| How many cylinders can be purchased by the dealer. (i.e) What is the maximum supply from the oil company? | HIGH | Monthly expenditure has to be considered. CANNOT BE MITIGATED considering the business profit |
| Solar/Induction consumption if increases variances in the sales can be noticed. | LOW | 1. Electricity variance. 2. Less usage or awareness over solar |
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