All Case Studies

Startup Propane Business

June 5, 2018

An operating oil delivery company wanted to start a propane gas division. Their business goals were to create a new revenue stream and to increase customer retention by providing their oil customers with the gas they needed for cooking, hot water heaters, pools, fire places, etc.

Capacity Consulting Inc. was engaged to conduct a full feasibility analysis to determine if the new venture would ultimately be successful. There was a large up-front investment needed to buy tanks, trucks, training, certification and product. They couldn’t do it if it took too long to break even. Of course if the financials made sense, they would use the results of the study to help them get a loan.

We started from scratch with a demographic study to determine how many potential customers were in their service area We then did a full SWOT analysis, identified their ideal customer, did a competition analysis and determined their expected market share. Pro forma financial statements were done and indicated a breakeven of 18 months and a huge increase in profit in year 4 when customer count started to justify payrolls.

Armed with peace of mind, the owner decided to go forward. Capacity created a business plan to provide them a step by step map to success and a strategic marketing plan with messaging and advertising needed to meet the projections. All materials were presented to the bank that readily increased the company’s line of credit based on the in depth materials provided.

18 months later, the propane company has reached break even and is hitting all revenue benchmarks exactly as planned. Their success and outstanding service reputation has gotten them some unexpected attention recently from a couple VERY large commercial accounts. Stay Tuned!