With the constant demand for gasoline in our everyday lives, a gas station may seem to be a stable business in which to invest your time and money. However, purchasing one can be a tricky endeavor. For example, many people don’t know that high gas prices don’t necessarily lead to high profits for the gas station owner, who make good money selling items in their attached convenience stores.
Be sure to make an informed decision about buying a gas station and take into account a few key business factors:
1. Franchise vs. Independent
One of the most important operational decisions involves determining whether to run your business under a major oil company or as an independent gas station owner. Serving under the model of a franchise mandates that you to adhere to its policies and purchase only their gasoline, but gives the benefit of providing coverage for any environmental challenges. On the other hand, independent gas stations will allow you to find more competitive pricing for local gas stations, but they place much of the liability on the owner. Do some research into the likelihood of the environment posing issues for the gas station, and make an informed decision.
As with any business, visibility and local demand are key factors to consider when purchasing a gas station. Locations off of highways or major roads will provide access to a higher population of drivers. Furthermore, a lack of competition from nearby gas stations will increase the demand for yours. Another factor to take into account about location is the crime rate for the neighborhood, as gas stations are common targets for theft.
3. Convenience Store
Due to the relatively fixed pricing model of gasoline by market cost, gas stations generate a large portion of their revenue from convenience store sales. Maximize profits by selling on-the-go products that are in high demand while maintaining a well-kept store. Increasing the size of the convenience store is appealing and will often draw more customers.
Opening a new gas station requires a substantial amount of capital and will likely serve as a long-term investment and typically require business loans to start up. Make sure that you get a loan that best suits your needs, check out more of our blog at www.biz2credit.com/blog.
Biz2Credit can help you figure out the best path to take. Loan specialists can also help you navigate pick a loan most suitable to your business. Visit the website or call (877) 861-2210 for help.