While we’ve seen high volatility in gas prices through COVID-19, many Americans are now returning to work and other daily activities. Pandemic or not, convenience stores have and will always continue to be an essential business. The industry generates $106 billion annually in the United States alone, so, understandably, you’d want to dive into this viable market. If you intend to buy a gas station, keep the four following considerations in mind to land a great business opportunity.
Start your entrepreneurial journey on the right foot by making these four considerations for gas station business buyers!
The most profitable gas stations are often those that are located off a busy intersection or major highway. These highly-trafficked areas draw in more customers due to sheer convenience. While some are brand loyal to a specific gas station business, many choose based on proximity to their home or work. Not only is real estate itself important, but also the area your convenience store falls in. The average amount spent on gas varies greatly between region to region. For instance, New Jersey residents spend nearly $1,177 annually on gas, while New York residents, who use their cars significantly less, only pay $793 annually. When estimating your store sales and earning potential, consider the normal range for your area.
Once you’ve found a service station you’re interested in purchasing, you’ll want to meet with the current business owner to discuss specifics. What are they forfeiting in the sale? What assets (and potential liabilities) are you to inherit? Are training and post-transaction support available to you? Many of these conversations will transpire in the negotiation process. Given the complexity of these issues, it’s always recommended to involve an intermediary.
The vast majority of c-stores and gas stations, including Chevron, Circle K, and Exxon, are franchise businesses. If you’ve never considered this arrangement before, it may be well worth your interest. Franchise businesses are often an ideal arrangement because they are independently owned and operated. However, they draw in support from the franchisor, enabling them to be a successful business.
When meeting with the owner-operator, another item to discuss is their relationship with oil company suppliers. From a consumer standpoint, there isn’t much variance between the gas you receive at one convenience store and the other. On the operational side of things, it’s good to know that not all branded gas stations receive gas from their franchised dealers. Gasoline is often combined to be sold in bulk storage. Having said all this, it’s likely you could be receiving gas from different suppliers.
Of course, many other elements go into a business transaction. Buying a business can feel overwhelming, which is why we’re here to help. With over 40 years of experience facilitating business buying and selling transactions, we have the know-how to help you land your dream opportunity. Get started today by searching for gas stations for sale near you. Or, contact your local Sunbelt Business Brokers office directly to learn about unlisted nearby opportunities!