We see a lot of elite entrepreneurs diving into the oil market. The fact is, the oil industry is a lucrative business that is characterized by price fluctuations. Nevertheless, crude oil is an essential part of daily living and a good business opportunity.
As an entrepreneur looking to venture into the oil business, we give you insight on how to jumpstart your start-up and claim your spot in the crude oil business.
Let us delve into specifics.
The Preparations
Research
To ensure business success, you need to have an intricate understanding of the oil business. Otherwise, you will not make it past the initial stages of the start-up. For instance, you need to understand terminologies such as Free-on-board (FOB), TTO(Tanker-Take-Over), and TTT (Tanker-To-Tanker Transfer). Strive to understand all that is entailed in the extraction process.
Determine the drilling process
To purchase the right equipment, you need to determine the drilling method you are going to use.
The oil and gas industry offers a plethora of drilling methods that include: percussion, rotary, dual-wall reverse-circulation, electro, and directional drilling.
As a start-up, directional drilling is one of the most preferred methods of oil drilling and for good reason. For starters, drilling several oil wells on the same platform is possible as drilling can be done in all directions. That alone allows extractors to tap into oil reserves that the vertical drilling method cannot reach. It is also cost-effective, among other things.
As an entrepreneur, you need to understand the pros and challenges of your preferred method. For instance, if directional drilling is your preferred method, you need to purchase automatic drilling machines and learn how to operate the computers that guide the drilling machines to the undersea oil reservoirs. Understanding such intricacies is what sets you apart from your competitors, establishing you as a reputable directional drilling company.
Create a business plan
After research and understanding the kind of oil services you are looking to offer, write a business plan. Rather than putting yourself in a position where you have no clue of the various processes involved in the gasoline industry, have a plan that clearly outlines your goals and what you look to achieve in your business.
The importance of a business plan cannot be underestimated. For starters, it helps entrepreneurs in making critical decisions pertaining to their business. Considering the oil and gas industry is a sensitive sector, it helps in the decision-making process and crisis management. It also allows businessmen to address various problems that might arise during the commencement of the business such as an inadequate team and capital injections. Additionally, it is a sure way to communicate objectives and benchmarks.
Besides, the oil and gas industry requires huge capital injections to operate at optimal levels. Business plans go a long way in facilitating the securing of funds from venture capitalists of other lending bodies such as banks.
Networking is an essential process
We live in a fast-paced business environment where networking is an integral part of business success. The oil and gas industry operates on a large scale and finding the proper professional networking channels goes a long way in business continuity.
As a newbie in the industry, knowing what you want to achieve is imperative. This is what you communicate with influencers in your niche. Building social media connections is not enough. Make a point of following up on the connections and coming up with various strategies on how to have a one-on-one conversation with the connections. During industry functions, show up and know about the services you offer like the back of your hand. Choose the right icebreaker that catches the attention of your prospects and be confident. Additionally, remember to do a follow-up as people tend to forget easily.
Purchase high-quality equipment
It takes a lot to be successful in the oil business. However, one thing that should never be compromised is the quality of equipment to be used. When it comes to the drilling, transportation, and storage processes, the equipment used needs to be of top-notch quality to minimize accidents among other things.
Valves, boilers, furnaces, heat exchangers, and compressors are some of the most important equipment in oil and gas companies. Valves, for example, are an integral part of the transportation process. They go a long way in controlling the flow of gas and oil. As such, a company might need to use high-pressure valves.
Take the example of boilers; boilers are integral pieces of equipment that act as vessels turning water into steam. They also heat the substances in them awaiting processing.
In all the above cases and more, purchasing the right quality equipment is vital. Find a reputable company that produces high-quality merchandise; equipment that is made from materials that do not break easily. Additionally, when it comes to the purchase of other products, go for durable ones. That way, you avoid costly and life-threatening accidents that may result from substandard pieces of equipment.
A great team is everything
It is no secret; good employees are a company’s best asset. The oil and gas industry is a sensitive sector and it is essential to build a great team that understands the intricacies of the oil business. When hiring, past job experience and employee experience are a vital aspect.
One of the challenges the oil and gas industry is facing is a lack of employees that understand its business processes. Most employees are of older generations, and most of the younger generations are not keen on the industry. So, after the hiring process, an entrepreneur might need to offer training to ensure employees develop a vast knowledge.
Conclusion
The oil industry is a lucrative one. Considering most start-ups fail within the first five years since the start of operations, an entrepreneur needs to make proper preparations to ensure the business celebrates its 5th birthday.
As an aspiring entrepreneur looking to venture into the oil industry, this is a great place to start. Consider the factors above to ensure a smooth start.
Laila Azzahra is a professional writer and blogger that loves to write about technology, business, entertainment, science, and health.