Gas stations make for excellent investments for those looking to start or expand their own small business. You can buy gas stations in any town in any state on any street corner, which is both a good and bad thing.
The last census put the total number of gas stations at around 120,000. With so many choices out there, separating the wheat from the chaff is a challenge.
Ask yourself these five questions before you buy a gas station.
What Environmental Issues Might Lurk Underground?
After you buy gas stations, you also inherit any existing environmental conditions. Once the sale is complete, any problems found from that point on will be attributed to the current owner; it is extremely difficult to prove that a mess was there when you bought the property. Before taking the plunge to buy gas stations, it pays to have an environmental survey conducted. Pay attention to extra services that are offered on the same site as the gas station, such as a car wash or auto repair shop that can also be a source of environmental issues.
What Are You Getting When You Buy Gas Stations?
Are those extra services and equipment part of the sale? Does the actual building and the land have different owners? What does the current lease terms look like and will you have to renegotiate or be locked in to legacy terms? Not all of these questions are readily apparent and could be a potential red flag lurking beneath the surface.
What Do The Records & Financials Look Like?
Poor recordkeeping can disguise the true value of a gas station, especially for locations with gas pumps, a convenience store, car wash, and other amenities. An owner might insist that they have "cash sales" that they include in the store's total revenues or sales. Bottom line -- if they can't prove it, don't add it into the valuation. Insist on seeing at least the previous two years worth of financial statements and have them checked by an accountant or CPA.
What Other Hidden Problems Might There Be?
Maybe there is major road work scheduled right in front of the gas station, scheduled to take at least 6 months for completion. How would you stay in business if you had limited business right at the start? Check with local authorities and records to make sure you buy gas stations at a good time.
What Are Your Financing Options?
Make sure you are fully capitalized. Can you qualify for a Small Business Administration backed loan? Is the seller offering financing terms? Do you have to dip into your home equity or 401k to muster up funds? The terms on your startup capital will dictate how much risk you can tolerate; it is a risky proposition to literally bet your house to buy gas stations.
Also, it is important to conduct the usual due diligence checklists before you buy gas stations in addition to these five industry specific questions. Doing the necessary 'homework' and research really pays off when buying any business, and gas stations are no exception. By knowing all the facts ahead of time, you'll be able to make a smart business investment.
Looking to buy a gas station business? See all gas stations for sale in California - or sell a gas station business and reach thousands of gas station buyers.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Peter Siegel, MBA: Business Purchase Financing Solutions
Niche business purchase financing advisory and loan placement services with SBA and Non-SBA Financing, Retirement Fund Rollover Solutions, Combo Financing Packages. To get professionally pre-qualified or more information on the ProBuy/ProSell Programs: 925-785-3118.
|Randall Barondess CBB, Business Brokerage Services - Central Coast
Experts at: Preparing Businesses For Sale, No-Cost Valuations and Lease Modifications. MaxOne Business, a REMAX ONE Company prepares small, mid-sized and large businesses for sale by confidentially packaging the business and providing guidance throughout the sales process.
|Lee Petsas, Business Broker: Southern California Area
Lee Petsas has been selling businesses with UBI Business Brokers in Southern CA since 1981. In 1999 he became the Owner and Broker for UBI. He has been approved multiple times by Courts as an Expert Witness in the area of Business Valuations.
|Matt Weiler, Business Broker: Gas Station Specialist
Business Broker Specializing in primarily gas stations. Geographic area of focus: San Francisco Bay Area to Sacramento and as far South as Monterey, California. To sell or buy a small or large gas station phone Matt (gas station business broker specialist) direct at 408-623-0920.
|Taj Randhawa, Business Broker Specialist - Gas Stations, Liquor Stores
If you are interested buying or selling a gas station, liquor store feel free to phone me for a consultation. My vast experience & specialization in gas stations & liquor stores helps me in serving my clients with full confidence, trust & sincerity. Serving Central Valley, SF Bay Area. 559-259-4247.
|Shalonda Chappel: Escrow & Bulk Sale Services - Southern California
Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.
|Brad Steinberg, Business Broker: Laundromat Specialist
PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.
|William F. Ziprick, Attorney: Legal Services For Buyers And Sellers
Through creative problem solving, attention to detail, accessibility, & understanding that unnecessary delay is often a deal killer, I work closely with my clients and other professionals to consistently achieve a high rate of closings. Office: 909-255-8353, Cell: 509-951-7230.
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