How to Open a Gas Station in Alabama: Step-by-Step Requirements, Business Plan, Setup Cost, Profit, and License/Permit

Alabama is a great state for gas stations due to its high population and proximity to other major cities. However, there are different factors to consider when opening a gas station in Alabama, such as location, size, and licensing requirements. Licensing requirements can vary depending on the type of business you’re opening. Starting a gas station is like opening any other business; you’ll need a comprehensive business plan and the right resources.

How to Open a Gas Station in Alabama

How to open a gas station in Alabama

Research gas station business opportunities

Start by researching to see how many gas stations already exist in your area and what kind of competition you’ll be facing. This will help you determine whether starting a station is commercially viable and where it can be located. To be successful, the nearest gas station to your property should be at least one mile away or on the opposite side of a high-traffic street or highway.

Find a location to open your gas station in Alabama

When choosing a gas station location, you’ll need at least 2,100 square feet for fuel pumps and about 1,350 square feet of office space attached to the gas station. Consider gas station laws and zoning requirements before choosing a location. These estimates are for a minimum-service gas station, but if you plan to add other services or food options, you will need more space. Location influences how much traffic you attract, so it should be a priority when brainstorming how to open a gas station.

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Gas Station

Firstly, reference your market analysis and how your chosen location benefits your business. You’ll also need to have an approved location and meet all safety requirements. Finally, you’ll need to purchase gas station equipment, including pumps, tanks, and signs. When it comes to location, most gas stations prefer locations that are close to major roads and highways. This is because customers travel in large groups and will likely visit multiple stations during their trip.

Requirements for opening a gas station in Alabama

  • You will need to have a business plan to open a gas station. This document should contain your goals for the gas station, financial projections, marketing strategy, and more. Make sure your business plan is well-researched and error-free before submitting it to lending institutions.
  • Once you have completed your business plan, you will need to find a location for your gas station. The best place to open a gas station is in an area with high traffic counts and plenty of potential customers. You will also want to make sure that the property you choose is in good condition and has reliable access to fuel supplies.
  • Next, you will need to develop a marketing strategy for your gas station. You will need to target potential customers through advertising campaigns, social media platforms, and other outreach methods. Remember to attract customers and invest in promotional materials (such as signage).
  • Finally, make sure that you are prepared financially for the opening of your gas station. You must budget for property taxes, insurance premiums, and employee salaries. Additionally, be sure to factor in the cost of fuel supplies and other necessary inventory items.
  • You will need an Alabama Business License to open a gas station. You can get this license from the Alabama Department of Commerce. Once you have the license, you’ll need to register your business with the department. Next, you’ll need to provide information about your business, such as your name and address. You’ll also need to provide information about your employees, such as their names and Social Security number. Finally, you’ll need to pay fees related to registering your business.
  • Once you’ve registered your business with the department, you’ll need a gasoline dispensing permit from the Alabama Board of Health. This permit will allow you to sell gasoline at your gas station. 

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Fuel Transport Vehicle

Equipment needed to open a gas station in Alabama

You’ll need to buy gas station equipment before opening for business. Gas stations require gas pumps, convenience store cash registers, gas station scales, garbage cans, debris containers, restroom supplies, and hot beverage machines. You must also buy gas-related safety items, including gas-dispensing nozzles, gas pump hoses, gas can-help regulators, and fire extinguishers. The initial investment required to open a gas station is high since you will need to;

  • Install fuel tanks and pumps.
  • Construct and kit out the building used by the staff and management.
  • Install a security system.
  • Provide for the installation of related services, such as a car wash, grocery store, cafe, etc.
  • Before incurring expenses, consider asking for quotes from several suppliers to choose the best value for money.

Gasoline pumps and dispensers can be purchased from various sources, including dealerships, suppliers, and online retailers. Before making any purchase, it is essential to verify the dimensions of the equipment that you will be using. In addition, many suppliers offer illustrated instructions for installing pumps and dispensers.

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Refueling Car

List your products and services for opening a gas station in Alabama

The business plan should include the number of gas pumps you plan to operate (based on your market research) and additional products and services to maximize profit margins. The common products and services at gas stations are; 

  • Convenience stores selling beverages, snacks, car accessories, tobacco, alcohol, and lottery tickets 
  • Car washes (full service or self-service) 
  • Air pumps 
  • Restrooms 
  • Mechanics for oil changes and repairs (increasingly rare these days) 

Each of these services has costs, permits, and maintenance requirements. If you decide to operate a gas station through a franchise agreement, you will be limited in the services and products you can offer. 

Buy a franchise to open a gas station in Alabama

  • Most gas station owners choose to enter the business by purchasing a gas station franchise. This can reduce the financial burdens of opening a gas station and gives gas stations an instantly recognizable brand. 
  • When choosing a franchise, make sure you thoroughly understand the franchise agreement and agree to its terms. Each has different requirements for you to become a franchisee, and many won’t consider you if you don’t have a background in management. 
  • Before signing any franchise agreement, you have an experienced attorney review the agreement. They can help you negotiate the contract terms and get lower royalties and other benefits.

Necessary conditions for opening a gas station in Alabama

  • Be at least 18 years old
  • Have a valid driver’s license
  • Own or have the right to own the property where the station will be located
  • Register with the Alabama Department of Revenue
  • Obtain a permit from the municipality in which the station will be located

The set-up cost of a gas station in Alabama

The set-up cost can vary depending on the location and size of the station. The average cost to open a gas station in Alabama is between $1,50,000 and $5,00,000. The gas station costs can include property acquisition, building construction, lease agreements, and maintenance.

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Fuel Refilling Equipment

Create a gas station business plan in Alabama

1. Research the regulations in your state. Each state has laws surrounding gas stations, so get acquainted with them before starting your business. Once you know what kind of gas station you want to build, the next step is to choose a location. Ensure the site is accessible and has all the necessary amenities, like fuel pumps and parking spaces. Also, factor in traffic patterns and local regulations when choosing a site.

2. Before agreeing to work with any gas supplier, it’s essential to research the competition. This will give you an idea of the rates they offer and which supplies they use. It’s also helpful to get a feel for their customer service Philosophy and how loyal their customers are.

3. Acquire equipment and inventory required for operation, including pumps, dispensers, and tanks. You will need pumps, tanks, gasoline cans, signs, and more. Make sure to shop around for affordable supplies and equipment before purchasing.

4. Identify a location for the gas station. A site with good visibility and ample parking is ideal. Prepare a business plan that includes estimates of costs and revenue.

5. Contact local authorities to get permits and licenses necessary for the gas station, such as zoning approval and fire safety inspections. You will need a license from the state department of agriculture and commerce and a permit from the local fire marshal.

6. Develop marketing plans to attract customers to the gas station. This may include posters, commercials, or special offers.

7. Hire qualified employees to operate the gas station smoothly and efficiently. Train them on all aspects of running the business.

8. Manage expenses related to the gas station, such as fuel, insurance, repairs, taxes, and employee wages/benefits.

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9. Your target market will dictate what type of gas supplier you should work with. For example, if your target market is budget-minded, you may want to work with a local gas station offering cheaper fuel prices. On the other hand, if your target market is high-end, you may want to work with a more expensive gas supplier that offers higher-quality fuel.

Obtain necessary permits and licenses to open a gas station in Alabama

Before you can open your gas station, you’ll need to get gas station permits from the Department of Transportation (DOT). The DOT regulates gas stations that are registered with them to ensure safety measures are being followed. You will also need to meet equipment and design requirements. The owner must have a valid business license from the state. Next, the station must be registered with the state as a convenience store. Finally, the owner must obtain a gas station license from the Alabama Department of Revenue.

Permits are required to vary depending on the type of gas station you are opening, but generally, you will need a permit from the Alabama Department of Environmental Management (ADEQ) and a license from the Alabama Board of Health. The necessary permits and licenses will change from state to state. Be sure to research the business requirements of your respective state. In general, you will need to obtain permits for the following: 

  • Fire inspections 
  • Tank inspections 
  • Water discharges 
  • Alcohol and tobacco sales 
  • Restaurant codes and regulations 
  • Motor fuel outlet licenses 
  • Certificate of occupancy

Is owning a gas station profitable in Alabama?

There are many factors to consider when opening a gas station, including location, infrastructure, and competition. Keep in mind that the profit margin on gasoline is relatively low. Factors that can increase your profits include:

  • Location: Consider the surrounding area and whether there is strong population growth potential. If you are close to major highways or other transportation hubs, your station will be more convenient for customers.
  • Infrastructure: Ensure adequate tanks, pumps, and other necessary equipment. You’ll also need to invest in marketing materials such as signs and advertisements.
  • Competition: If there are already a few stations in the area, you’ll need to compete on price and services offered (such as fuel delivery).

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Fuel Station

Get business insurance for opening a gas station in Alabama

  • Recommend that you purchase business insurance to protect your business. Opening a gas station can expose you to daily risks like theft, employee injury, equipment malfunction, property damage, and more. Insurance helps protect you and your assets.
  • Your business needs insurance, as with licenses and permits, to operate safely and lawfully. In addition, business Insurance protects your company’s financial well-being in the event of a covered loss.
  • This policy will protect you against financial losses if something happens to your business, such as a fire or natural disaster. However, if necessary, you should also ensure an emergency response and an evacuation plan for staff.
  • To apply for a permit, you’ll need to submit an application, pay the applicable fees, and provide documentation that shows your station meets all requirements. Once your application is approved, you’ll receive a permit number and must comply with all permit provisions.

Advertising and marketing your gas station in Alabama

When advertising your gas station, it is important to ensure you are targeting the right consumers. This means that you should focus on attracting customers who live in or near your area and use gasoline frequently. Additionally, it would help if you advertised your gas station in local newspapers and other media outlets. It is also important to ensure that your gas station is well-maintained and stocked with the latest supplies. This way, customers will know they can always rely on your station for quality fuel products.

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Fuel Pump

Determine if there is a market for gas stations in Alabama. To do this, you will need to assess the current fuel prices and see if they are within your budget. Additionally, you will need to research the regulations surrounding gas stations in your state. Finally, you must create a marketing plan and start advertising your station. You will thus focus on the market research previously carried out to identify which methods of communication are more likely to grab the attention of your target customers. Several possibilities are available to you. For example:

  • Create a website that contains practical information about your station, including its opening hours, fuel rates, and a map of how to get there.
  • Focus on search engine optimization so that you can be easily found on the Internet (via Google Maps and other online directories).
  • Develop a loyalty card system.
  • Pay for billboard and internet advertising.
  • Develop partnerships with road transport companies, taxi companies, or driving schools within the area.


Gas station businesses attract customers by selling gasoline, which most people need for their vehicles. Gasoline is just one of the many products gas stations may sell to travelers. Many stations also offer food, drinks, and convenience store items. Starting a gas station requires significant money when purchasing property, keeping up with regulations, supplies, and paying employees. 


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