How to Start a Propane Business

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Propane is a gas that is used for cooking and heating. It can be used as fuel for engines, barbecues, and portable stoves. You can make a good living selling propane to grocery stores, convenience stores, residential homes, and commercial businesses. The start-up costs can range from $100,000 to $400,000, depending on the location of the tanks.

Take care of the necessary paperwork. First contact your “State’s Propane Association” (SPA) and follow all the rules for getting your propane business started. Buy insurance through a reputable company like JIC, which you can find at www.lpginsurance.com. Go to your local municipal building and apply for a permit or license to start a propane business. Log on to GovSpot.com and apply for your state’s Department of Revenue tax ID number. Call (800) 429-4833 and apply for your federal tax ID number.

Join an organization like the National Propane Gas Association (NPGA) to network with other propane dealers. Your involvement in such an organization will also lend your business credibility. You can download an application and check out their resources at www.npga.org. As a member, you will have access to material suppliers, as well as other dealers who may be able to help you get your business up and running.

Check with your local commercial real estate agent to purchase or rent space to store bulk propane cylinders. Contact your SPA or the NPGA to inquire about purchasing propane, supplies and equipment in your state. Buy at least 50 cylinders at 100 pounds each to start. Obtain two used cylinder trucks to transport the propane to residents and businesses in your area.

Operate from your home or rent office space and purchase a computer to store all the company's business records. Go to your local print shop and order business cards and fliers to promote your business. Hire someone to create a website or create your own at Weebly.com for free. Meet people in your area and tell them about your business. This process should help you successfully start your propane business.

Tips

  • If possible, buy propane and supplies from retailers in your state. Obtain propane quotes from more than one supplier. As your business grows, hire two to three employees to help you.

Warnings

  • Check with your state for any certifications or training you may need. Establish a territory for delivery of the propane to businesses and other customers. Develop a vehicle safety program. Make sure your drivers have a good driving record.

References

Resources

Photo Credits

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