Fueling Growth With Focus

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Digital Library > Building and Inspiring an Organization > Strategic planning"Fueling Growth With Focus"

Bob Allen, owner and general manager of Tuxedo Cardlock Fuels, Willow Springs, Ill., provides his Cardlock debit-card service to commercial consumers of gasoline, such as businesses with fleets of vehicles or truck drivers.

In addition, Allen owns four gas stations: three Citgo-branded stations and one named Tuxedo Junction, all of which serve retail customers as well as commercial drivers. Currently, Tuxedo's Cardlock debit-card service is valid only at Allen's four gas stations, where the programmed cards restrict drivers' access to fuel to certain hours, as well as the number of gallons and type of fuel pumped.

Allen opened his retail gasoline stations in 1983 and added the debit-card business to those outlets in 1998. Today, he personally manages two of the stations and leases the management of the other two. Tuxedo earned approximate revenues of $9.7 million in 2000. Allen's ultimate goal is to open an unattended station that solely services the company's Cardlock accounts. But that goal remains elusive. Here he explains:

My first expansion strategy includes establishing Cardlock systems at other gasoline retailers' locations. This is a relatively low-risk plan, with an up-front investment of about $5,000 per site.

The second step of the growth strategy is to form a joint venture with trucking and leasing companies with private gas tanks to contract my debit-card system. We would manage the fuel consumption of these fleets and ease truckers' ability to fuel up by providing pumps unfettered by retail traffic.

The third step would be to purchase real estate and, within five years, build our own freestanding, unattended Cardlock station that would only serve commercial fleets — and provide greater return. Such a freestanding system would cost a minimum of $250,000 per site.

The problem is that we only have so many resources. I am still knee deep in the day-to-day operations. My wife and I employ a bookkeeper, an office administrator and two salespeople. We're tight, but I expect sales to plateau sometime soon, so hiring is risky.

Cash flow is also a point of concern because the business is cyclical: Truckers need gas in the summer months and early fall to run holiday goods and construction materials across the country. However, by late November our business is dry. We plan reserves for this, but it's still a crunch.

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