Those of you that are heavily involved in the business and trading worlds will know that oil is incredibly significant. Many experienced business heads are always concerned with the price of it as it makes a lot of big things happen. Oil prices can affect the price of petrol and other fuel sources, which in turn affect peoples lives and businesses. There’s even an old saying that says countries rise and fall based on oil prices.
With all this being said, can you start a business in the oil industry? There are loads of options you can explore, but the most popular one involves searching for and mining crude oil yourself. This is far from a small business idea, but the potential profits are staggering. The world essentially runs on oil, so it will always be in demand.
Whether this interests you or not, it’s still very intriguing to see what it takes to start a company like this. So, have a read through this post, and you may learn something valuable:
Putting Together A Team
The beauty of some business ideas is that you only need to rely on yourself for them to work. But, as mentioned earlier, this isn’t a small business idea. With an oil company, you must put together a team of experts to help you during this venture. Not to mention the fact you’ll also have to outsource different experts at various points in the business idea cycle.
Primarily, you need a team of seasoned business professionals that understand the industry. They will know where the best drilling sites are, and it pays if some of them have legal experience and qualifications as well. Having an attorney on your side is an essential hire as there are countless legal hurdles you need to climb over.
When building your team, make sure everyone understands their roles and knows the aim of the business; to find crude oil and sell it for big profits. You need everyone on the same page as this helps you move forward and run the most efficient business.
Getting The Startup Funds
With an idea like this, you need to raise a lot of startup capital. This means you probably have to explore as many different ideas as possible. For many, it means putting some of your own money into the business – and the money of your team members too, if they’re willing to contribute. Naturally, if any of them do, they’ll share a percentage of the business with you.
From here, you can explore bank loans and angel investors, which can help you raise even more capital. It’s the kind of idea that you need to think about years before you go through with it. Raising funds can take a lot of time, but it will be worth it all in the end.
Upon finding all the money you require, you can go through with the whole legal process of forming your company.
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Finding An Exploration Site
The main way you make money from this business is by finding oil, transporting it, and selling it to different companies around the world. So, a huge aspect of this idea is finding an exploration site. This is where you’ll do all the drilling for oil, and it’s vital that you find a location where there’s a good chance you’ll see some oil.
When you’ve pinpointed the desired location, there are various legal issues to deal with. You’ll have to get a permit from the local government that allows you to drill on this land, and you really need an attorney to help you figure all of this out to ensure you don’t break any laws.
Once this is sorted, you will start drilling and essentially creating a massive site full of people, equipment, pipes, and temporary offices. There’s a lot that you need to get your hands on, and it makes sense to lease most of your equipment and hire exploration teams to help you out. With things like the piping you need to transport the oil into containers, there are companies like Varner Pipe, LLC that you can buy them from. It’s a huge process, and you should be figuring out all these logistics while you’re applying for the permit and sorting legal issues. So, when you get the green light, you can crack on right away.
Mining The Oil
You’ll need to mine for oil by drilling wells throughout your site. The best way to do this is by getting the help of a geophysical firm. They use crazy technology that helps see what lies underneath the earth. As such, they can point you in the direction of oil so you can drill your wells in the ideal locations.
Then, most of the work is done by drilling and mining machinery to extract the oil and deliver it through a piping system that you have to set up. Again, it’s a lot of work, and there’s some construction involved. But, you want to get to a point where you’re filling containers up with oil, which can then be put on the back of trucks and sold to the highest bidders.
The entire exploration process can take much longer than you may think. It could be years before you have enough oil, but this is standard in the industry. We’re talking about a sector that’s worth trillions – companies regularly pull in millions per year, if not more! So, patience is a virtue!
Conclusion
In summary, it takes an awful lot of time, money, and effort to start a business in the oil industry. It’s something that some entrepreneurs branch out into once they’ve made a name for themselves and already have a sizeable fortune to help finance the idea.
Regardless of whether this is something you’d consider, there are a few lessons small business owners can take from this. Firstly, you sometimes need a team to help you get to where you want to go. Secondly, it pays to be patient when chasing profits. Finally, don’t be afraid to search for multiple business finance options when starting a company.
