Buying a Gas Station
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Question:
What are some of the key things to look for in evaluating gas stations for sale?
Answer:
Gas stations have always been a popular resale business; however, you should not be misled as many people are thinking that this is an ideal "absentee" business. It takes a lot of work to be successful and either requires a substantial amount of time, or top notch management personnel to operate/manage it on your behalf. Here are a couple of points to consider:
- Today, you'll want a gas station that offers additional services such as a mini mart, car wash, etc. and you should be evaluating these to be certain that revenues and profit margins are in line with industry standards.
- Having a brand name affiliation with a major oil company is important. You want to review the contract in place to be certain that it is transferable. You should also arrange to meet the local representative of the oil company to get their feedback and to be sure that they're on board with the transaction. To this end, ensuring a successful rollover of the contract must be a condition of the sale
- Consider the competition. In many areas, there is a gas station on every corner, or the possibility that new ones can be built.
- Road traffic: Gas stations/C-stores thrive because of location. If traffic patterns change, it will impact the business. Therefore, you'll want to investigate with the city planning department to learn what new permits have been granted for building in the area (for competition) or other businesses that could impact the traffic and, most importantly, when was the last major roadwork done. Typically, major routes will undergo some work at least every ten years. During this time there can be a major disruption to the business.
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Richard Parker author of: How To Buy A Good Business At A Great Price(TM), the most widely used reference resource and strategy guide for buying a business. He has purchased ten businesses in his career and has helped thousands of prospective buyers worldwide learn how to buy the right business for sale. He is also founder and President of Diomo Corporation - The Business Buyer Resource Center. Richard Parker is also the author of BizQuest's Business for Sale Blog |