PRO PA NE
Propane: The Price of Entry
Many fuel oil dealers are moving into the propane business—here are some things they need to know BY S T EP HEN B E N NE T T
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ANY A FUEL OIL DEALER HAS DIVERSIFIED INTO THE PROPANE business, and more are doing so all the time. But there are hurdles to launching a propane operation,
industry experts said, and the biggest is the entry ticket: the initial outlay. This and other requirements must be weighed carefully before deciding to go forward. "No question, it is capital intensive," Rob Stenger said."You
need a solid lending relationship and good cash flow management practices." Stenger and Kinson Craft launched Simple Energy in 2006, delivering fuel oil, kerosene and diesel fuel. Their business plan included expansion into propane, a move they made in October 2010. "It must be properly planned, financed and executed," Stenger said. "It's going to cost more than you think. But if you're going
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to market yourself as a full-service company in the home energy space, propane is a must." Simple Energy is based in West Lebanon, N.H. Half of its cus-
tomers are in New Hampshire and half in Vermont. Stenger said he and Craft benefited from broad experience in fuels, including propane. Stenger held operations and management positions with Dead River Company, South Portland, Me., Irving Oil Corp., St. John, New Brunswick, Canada, and Johnson & Dix Fuel Corp., Lebanon, N.H.; Craft worked in marketing for Wyatt Energy, New Haven, Conn., and in sales for Johnson & Dix. To prepare for the propane business, Simple Energy sent
oil service technicians for propane training, and also hired one person who was a propane specialist, Stenger said. A heavy duty pickup serves as the company's propane service truck. The
