8 Factors to Consider Before Buying or Leasing a Gas Station
Posted on October 3, 2019
The opportunity to buy or lease a gas station can be a good investment. However, there are many factors to consider before buying or leasing a gas station.
Branded or Unbranded Station
The first thing to decide on is do you want a branded or unbranded station. A branded station will have the relationship and the corporate benefits. These benefits include training, support and brand recognition. Branded stations like Chevron, Exxon, Mobile, Shell, or BP all have customer reward programs set up. This program helps you to gain more clients and more gallons for rewards. However, with a branded station, you must follow their rules to maintain their brand standards.
An unbranded station will let you have complete control. You will have to make a name for your station. It can be done with the right amount of work and dedication.
What Will You Inherit?
Is the station profitable? Either you or an accountant should look through the accounts and records. Be sure to check the customer count. Also, see if the supply contract is transferable. Double-check all the terms and conditions in the contract.
Inspect the facilities and equipment, construction and look for any other issues. If the gas pumps or dispensers are older, it may be in your best interest to look into purchasing new ones or reconditioned gas pumps or dispensers.
It can be all about the location when looking into real estate and a gas station is no different. Is it a well-trafficked location? Is it easy to access for regular customers and for large trucks? Corner lots and highway exits drive a bigger business. Densely populated neighborhoods also make for a great location.
Competitors in the Area
Having too much competition can hurt your business, but no competition may mean that the location is not a profitable one. Do research on the location. Look into the demographics of the location, and check with the city about local permitting.
A gas station with a convenience store is a way that you are able to earn more money. It also attracts more people to your location. Most stations make their money from convenience store sales and add-on services like a car wash.
What It Includes?
It is critical that you understand all the details on what it includes. Are you buying the station only, or the land as well? If there is a car wash or they have any food shops inside are those part of the deal? Are you the owner of everything or just the store?
Construction or city revamps can have a huge effect on your gas station. As customers will not want to hassle with a difficult entrance to your gas station. It is worth a trip to a city hall to see if there are any plans that will impact your business.
Restoration or Upgrades
There are many considerations to make when looking into buying or leasing a gas station. While some of the considerations will be non-negotiable. You can restore or upgrade a gas station without spending the entire budget. You should consider reconditioned gas pumps or dispensers as it will save on costs. Using reputable brand products from a reliable company that understands good value.