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Key Takeaways
- The fundamental fixed operational cost for the gas station, combining rent and base payroll, is established at $30,617 per month.
- A substantial minimum cash reserve of $592,000 is required upfront to cover initial capital expenditures and operating deficits until profitability is achieved.
- Despite high initial capital needs, the financial model forecasts a rapid path to profitability, projecting the business will reach break-even within just four months of launch.
- Payroll, totaling $18,917 monthly for 60 FTEs, represents the single largest fixed expense category, closely followed by variable costs tied to inventory purchases.
Running Cost 1 : Wholesale Fuel and Inventory Costs
Fuel Cost Danger
Your combined wholesale fuel and in-store inventory costs are the biggest red flag right now. In 2026, these variable costs hit 120% of total revenue. Honestly, this means for every dollar earned, you spend $1.20 just buying the product. The breakdown shows 80% tied to fuel and 40% to market goods.
COGS Drivers
These costs cover the direct cost of gasoline and diesel, plus the retail goods sold in your market. You need accurate, real-time wholesale quotes to project the 80% fuel component. The 40% in-store inventory cost depends on your supplier agreements and how much product you lose to spoilage or theft (shrink). What this estimate hides is that fuel margin is usually razor-thin.
- Fuel cost: 80% of revenue.
- Inventory cost: 40% of revenue.
- Total COGS: 120% of revenue.
Margin Control
Since Cost of Goods Sold (COGS) is 120% of revenue, you must radically improve margin capture immediately. Fuel margins alone won't save you; focus intensely on driving high-margin convenience store sales to offset fuel losses. Avoid overstocking perishables, which just increases that 40% inventory hit. You’ve got to get this ratio down, defintely.
- Boost in-store attach rate.
- Negotiate supplier volume discounts.
- Minimize inventory spoilage/shrink.
Viability Check
A 120% COGS ratio means you cannot cover fixed operating expenses like site rent ($8,000/month) or staff wages ($18,917/month) without major margin correction. You need a clear plan where total COGS stays well under 85% of revenue just to start covering overhead.
Running Cost 2 : Staff Wages and Benefits
Base Payroll Snapshot
Your base payroll for 60 staff in 2026 hits $18,917 monthly before you add the employer's share of taxes and benefits. This number covers managers, cashiers, and food staff across all locations. Honestly, this is just the starting line for your total people cost.
Cost Inputs
This $18,917 monthly figure is the raw base salary for 60 FTE (Full-Time Equivalents) planned for 2026. It bundles salaries for Store Managers, Assistant Managers, Cashiers, and Food Staff. What this estimate hides is the employer burden: FICA taxes, unemployment insurance, and health/retirement benefits, which usually add 20% to 35% on top of this base.
- Inputs: 60 FTE headcount, specific role salary bands.
- Excludes: Employer payroll taxes and insurance premiums.
- Use this as your baseline for total compensation modeling.
Managing Headcount
Managing 60 people requires tight scheduling, especially around peak fuel and market times. Avoid over-staffing during slow overnight shifts; use flexible scheduling instead of hiring more part-timers. A common mistake is assuming all 60 FTEs work identical hours.
- Cross-train staff for fuel and market tasks.
- Use technology to optimize shift coverage dynamically.
- Benchmark manager salaries against local convenience store rates.
The Real People Cost
Payroll is your largest controllable operating expense after inventory cost. If you project 60 staff too early, you'll burn cash waiting for volume to catch up. Review staffing levels quarterly against transaction volume per hour; don't let idle time become standard defintely.
Running Cost 3 : Site Rent or Lease Payments
Lease Lock
The property lease payment is your biggest fixed overhead expense. It is set firmly at $8,000 per month. This rate remains constant across the entire forecast period, running from 2026 through 2030. This predictable cost demands strong sales volume to cover it early on.
Lease Inputs
This $8,000 monthly figure covers the physical site rent for the fuel pumps and convenience market. You need a signed lease agreement specifying the fixed rate and term length. Since it's a fixed overhead, it impacts your break-even point directly, regardless of how many gallons you sell that month.
- Fixed monthly rate: $8,000
- Duration: 2026 to 2030
- Budgeted as overhead
Lease Management
Since this cost is fixed until 2030, you can't easily reduce it mid-term. The key mistake is underestimating its weight against initial revenue projections. Focus instead on maximizing in-store contribution margin to absorb this fixed hit faster. Defintely negotiate renewal terms early.
- Cannot cut mid-term
- Focus on sales density
- Avoid renewal surprises
Fixed Cost Weight
Weighing this $8,000 against other fixed costs like $1,500 for utilities shows the lease dominates. If your initial revenue projections miss the mark, this high fixed cost quickly erodes contribution margin. You need robust initial sales velocity to cover this baseline before variable costs scale up.
Running Cost 4 : Utilities
Utility Baseline
Utilities are budgeted at a baseline of $1,500 per month, but expect this number to move based on seasonal demand and how often you run the fuel pumps. This cost covers electricity, water, and gas needed to run the pumps and the convenience market operations.
Cost Inputs
This $1,500 baseline covers essential operational inputs like electricity for lighting, refrigeration for drinks, and water for restrooms. Inputs needed are historical usage data from similar sites or vendor quotes, especially factoring in peak summer cooling loads. It’s a necessary fixed overhead component for site readyness.
- Electricity for market lighting
- Water for restrooms and cleaning
- Gas for heating/cooking needs
Optimization Tactics
Manage this cost by optimizing HVAC schedules and installing energy-efficient refrigeration units immediately. Since pump usage drives spikes, monitor usage patterns closely to avoid unnecessary overnight draw. A common mistake is neglecting preventative maintenance on pumps, which can increase electrical draw.
- Audit refrigeration efficiency annually
- Schedule pump maintenance quarterly
- Use smart thermostats aggressively
Budget Reality Check
While listed as fixed at $1,500, treat this as a floor, not a ceiling, especially during high-volume summer months or if you scale fuel throughput quickly. You must build a 15% contingency buffer into your monthly cash flow planning for these inevitable seasonal swings.
Running Cost 5 : Credit Card and Transaction Fees
Processing Fee Impact
Payment processing fees are a major variable drain, projected to consume 25% of total revenue in 2026. This cost hits your fuel gross margin hard, meaning every dollar processed electronically costs you a quarter before accounting for the wholesale product cost. That's a significant chunk of cash flow you need to manage.
Cost Drivers
This expense covers interchange fees charged by card networks and processors for accepting debit and credit payments for both fuel and in-store items. To model this accurately, you need the projected revenue mix (fuel vs. market sales) and the blended transaction rate applied to that total. If you process $1M in revenue, expect $250k in fees.
Reducing Transaction Costs
Reducing this 25% burn requires shifting customer behavior toward lower-cost payment rails. Focus on driving adoption of your loyalty program, which might use ACH or proprietary stored value, cutting down on interchange. Defintely review your processor contract terms annually for better tiering.
Margin Pressure Point
If fuel sales dominate your revenue mix, this 25% variable cost eats directly into your already tight fuel gross margin. Compare this against the 120% wholesale cost of goods sold (COGS) to see the pressure point; optimizing payment acceptance is non-negotiable for profitability here.
Running Cost 6 : Maintenance, Cleaning, and Security
Site Upkeep Cost
Site upkeep for the station costs $1,400 per month, combining cleaning and security services. This fixed cost must be covered before you see profit, so budget for it monthly.
Upkeep Cost Breakdown
Site upkeep is budgeted at $1,400 monthly. This breaks down into $1,000 for Property Maintenance and Cleaning, plus $400 for Security Services and Monitoring. You need signed vendor contracts to lock this in for the first year. Honestly, this is a predictable fixed cost, so you can defintely model it accurately.
Managing Site Costs
Since security monitoring is often bundled, shop around for better long-term monitoring rates to cut the $400 component. For cleaning, set strict performance standards for staff to reduce reliance on expensive third-party deep cleans. Don't let spotlessness slip, though; it hurts the premium brand promise.
Overhead Context
This $1,400 site upkeep cost is fixed overhead. It’s smaller than your $8,000 lease payment but larger than your $300 POS subscription. If you scale to multiple sites, this cost structure needs to shift to leverage centralized security contracts for better unit economics.
Running Cost 7 : Marketing and Technology Subscriptions
Tech & Loyalty Cost Structure
Your tech stack has a fixed $300 floor, but the 25% revenue share for loyalty is the real variable driver here. This cost scales immediately with every transaction, demanding tight Average Transaction Value (AOV) management.
Estimating Subscription Costs
The $300 covers the base Point of Sale (POS) system subscription needed for sales tracking across fuel and market items. The 25% variable marketing cost scales with total revenue, making it a major expense driver. This cost must be factored into contribution margin calculations early on.
- POS is a fixed $300 monthly overhead.
- Loyalty cost is 25% of total revenue.
- Requires accurate revenue forecasting.
Managing Variable Loyalty Spend
Control the 25% loyalty spend by driving higher Average Transaction Value (AOV) in the convenience market, not just fuel volume. If AOV rises, the variable cost is spread thinner across more dollars. Defintely review the loyalty program structure quarterly for ROI.
- Boost market AOV to dilute the 25%.
- Audit loyalty program effectiveness monthly.
- Ensure POS software supports granular reporting.
Margin Impact Warning
Since the loyalty cost is 25% of revenue, deep discounting to boost volume without increasing basket size crushes your effective margin fast. Monitor net revenue after this deduction closely, not just gross sales figures.
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Frequently Asked Questions
Fixed costs are $30,617 monthly, plus variable costs (fuel, inventory, fees) which equal about 17% of revenue