Operations Plan

Jump to section

• Overview & contents
• i. Important Notice and Basis of Preparation
• 1. Executive Summary
• 2. How Fuel Retail Economics Actually Work
• 3. The Business and Its Revenue Streams
• 4. Market and Site Analysis
• 5. SWOT and Competitive Position
• 6. Regulatory Pathway and Licensing
• 7. Operations Plan
• 8. Management and Organisation
• 9. Capital Requirement and Funding Structure
• 10. Financial Projections
• 11. Break-Even Analysis
• 12. Debt Service and Working Capital
• 13. Investment Returns
• 14. Sensitivity and Scenario Analysis
• 15. Risk Management
• 16. Implementation Timeline
• 17. Exit Options for Investors
• 18. Key Performance Indicators
• 19. Key Assumptions
• 20. Conclusion
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Capital and Depreciation Schedules
• C. Appendix C: Funding and Debt Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

7.1 Trading model

• Twenty-four hour operation across three shifts, which is standard for an arterial site and necessary to justify the fixed cost base.
• Wet stock control is the operational discipline that decides profitability. Daily dip readings reconciled to pump meters and sales, automatic tank gauging with leak detection, and a variance tolerance investigated at 0.3 per cent of throughput.
• Cash and card handling. Card penetration on fuel exceeds two-thirds, making merchant service fees a top-three operating cost at R1 296 000 in Year 1. Cash-in-transit collections are contracted daily, and the site operates a drop-safe protocol with no more than a defined float on the forecourt.
• Fuel procurement under a ten-year supply agreement with the branding oil company, with deliveries scheduled against tank ullage to minimise both stockouts and working capital tied up in product.
• Energy resilience: 60 kWp of rooftop solar with battery backup covers the shop refrigeration, lighting, point of sale and forecourt controller. With grid stability restored nationally but tariffs rising at roughly 9 per cent a year, the solar installation is modelled as a cost hedge with an approximate seven-year payback rather than as an availability measure.

7.2 Operating cost structure

Salaries dominate, as they must on a 24/7 forecourt: the complement of roughly 40 staff across attendants, cashiers, shop assistants, car wash operators, supervisors and management is modelled inclusive of statutory on-costs, against a national minimum wage of R30.23 per ordinary hour from March 2026 and Motor Industry Bargaining Council conditions for forecourt staff.

Labour cost inflation is the operating variable most likely to compress margins over the loan term, because the RAS margin adjustment mechanism has historically lagged actual wage settlements. The RAS matrix does include an allocation for petrol attendants within its operating expenditure component, so wage increases do eventually feed through to the margin — but the adjustment is annual and retrospective while the wage increase is immediate.

7.3 Card and merchant fees

Merchant fees are charged on turnover, not on margin, which is the clearest single illustration of why a rising pump price hurts. If the pump price rises 20 per cent with volumes unchanged, gross profit is identical and merchant fees rise by roughly R260 000 a year. That is 1.9 per cent of Year 3 gross profit surrendered to a price movement the retailer neither caused nor benefits from.

7.3b Car wash and forecourt services

The car wash deserves separate comment because it is the only stream in this plan that carries a meaningful capital cost against modest revenue. R1.4 million of equipment generates R3.0 million of Year 3 revenue at a 45 per cent margin, which is R1.35 million of gross profit — a return on the equipment that is respectable but not spectacular. Its real value is as a bundling mechanism: a wash offered free or discounted above a fuel spend threshold converts a price-indifferent motorist into a repeat one on a forecourt where petrol cannot be discounted.

7.4 The convenience format in detail

Section 2 establishes that the shop delivers 24 per cent of gross profit on 13 per cent of revenue. That outcome is not automatic; it is the product of a specific format decision, a specific range and a specific set of adjacencies to the forecourt.

Two disciplines determine whether the shop hits 27 per cent gross margin or 22 per cent. The first is waste on the food-to-go programme, which is prepared or delivered fresh and marked down or discarded daily — a category that runs at 60 per cent gross margin before waste can run at 35 per cent after it. The second is range discipline: a 450 m² forecourt store that attempts supermarket breadth ends up with slow stock, tied capital and no depth in the categories that actually sell.