5 Factors To Consider When Buying A Gas Station

Gas station franchises are a solid investment. With the price of gas, constant fuel demand in America, and exploding population, gas stations are a steady business that is going to be around for decades. But like all businesses, you want to do your due diligence before deciding whether or not it’s right for you. Gas stations cover a wide range of types and industry niches.

Buying a gas station can be a great investment. There are a lot of factors that go into the decision to buy one, especially if you are not familiar with the industry.

If you have been thinking about buying a gas station, here are five factors you should consider before making your purchase:

1. Location

Gas stations are at their most profitable when they are in convenient locations. If the station is located on a main road, has easy access and has good visibility, it will be more likely to attract customers.

2. Competition

If there is already a lot of competition in the area, it may be hard to attract and keep customers. Therefore, you will want to make sure that there is not too much competition around the area when thinking about purchasing a gas station. You will also want to make sure that the station does not compete with any stations owned by large chains such as Exxon or BP. Competition from these large chains could cause problems for your business in the future.

3. Profitability

It is important to determine whether or not the gas station is profitable before purchasing it. You can do this by analyzing the financial statements of the business and looking at how much money it makes every month and year. The more profitable a business is, the better investment it will be for you as an owner. To find out if a gas station has been profitable in the past, look at its sales figures over time

4. Income Sources

Gas stations typically earn money from three sources: gasoline, diesel and convenience store sales. Typically, the largest percentage of revenue comes from fuel sales. A good rule of thumb is that about 25 percent of gas station customers will buy something from the convenience store. The remaining 75 percent will only buy gasoline and diesel. This is why it's so important that you're able to purchase fuel at a low enough price to make a profit.

5. Management

A common mistake made by first-time gas station owners is taking on more responsibility than they can handle. It's easy to get caught up in the excitement of launching a new business, which leads to overestimating your ability to manage its success. Even if you have experience owning and operating other businesses, running a gas station is nothing like running a restaurant or retail store. There are many specific regulations and requirements that must be met in order to operate successfully as well as safely. For these reasons, it's best if you hire someone with experience managing a gas station before taking on this venture yourself.

Final Thought

Gathering information about buying a gas station is the first step in completing a deal. Utilize the advice presented here to learn more about specific areas of interest, such as traffic and income. When you are equipped with the right information, you will be able to make the right decision for your future.