Selling a gas station comes with some caveats that makes it a different process than selling other types of businesses. Owners that wish to get a nice sum for their gas station need to make sure they do all the necessary preparatory work before putting their business on the market.
Sellers that have their ducks in a row before they begin advertising their sale end up selling for higher amounts and more quickly. The major steps that should be taken to ensure a great sale are: preparing financial documents for review, creating an appropriate valuation range, checking industry compliance standards, and getting the right professionals to help with the sale. Sellers that can accomplish these tasks can halve the time it would take them to normally sell their gas station.
The first important job gas station owners have to do to prepare for selling, is gathering financial documents that provide information buyers want to know when searching for a business to acquire. Profit and loss statements, tax returns, and sales and inventory reports can provide the majority, if not all the financial information buyers are looking for. Profit and loss statements help show the earnings trends of the gas station and what parts of operations have room for optimization. Tax returns share some of the same information with profit and loss statements, but can give greater explanation for on financial details, such as depreciation of assets and deductibles. Sales and inventory reports show sales trends and the inventory turnover for a gas station. Along with financial information, vendor information is also important for potential buyers as they can see the business relationships they might take over. Buyers need all of this information before making an educated purchase, so it is in the interest of gas station sellers to have it organized and ready to be explained.
Once all the financial information is gathered by the owner of the gas station, the next step is to create a valuation for the business. The best way to create a valuation for a private business is to multiply financial figures by industry-index multipliers. The resulting product of these multiplications will create a range of valuations. Sellers should choose a top end valuation to advertise the gas station for sale and a bottom end valuation that should not be crossed when negotiating the sale price of the business with potential buyers. The top end value should not be too high or else it will scare off potential buyers, and the bottom end valuation should be high enough to make the sale of the gas station worth it. These valuations are important for negotiating as they are backed by financial data, however gas station sellers are also able to alter them by taking non-financial information into account, such as: location, state of assets, number of pumps, traffic on adjacent roads, and additional income sources. Sellers can use this additional information, if it’s positive, to argue for a higher selling price, but should be expected by buyers to argue a lower price if the information is negative.
Sellers of gas stations are most likely aware of compliance surrounding their businesses, but should be informed that such compliance is a huge factor when trying to transfer ownership to a buyer. For those unaware, there are a lot of regulation and compliance laws involving gas as a product due to its hazardous nature, with gas tanks requiring a certain thickness and material composition in California. Owners trying to sell a gas station should make sure they are compliant with local laws, making repairs and, or replacements as necessary to appear attractive to buyers, and therefore also be able to raise the price of their gas station. Having information showing compliance with regulatory laws is important to have ready when looking for buyers as they will want it as quickly as possible, considering they’re trying to avoid pursuing gas stations that need a lot of renovation.
When a gas station owner has all of prior steps completed, they should begin looking for relevant professionals to aid in the sale of their business. While some sellers believe they can sell their business alone, they quickly learn that they need experts with the time to guide them through the market. Business brokers, escrow agents, and or transactional attorneys are some professionals sellers should talk to for assistance. Gas station owners can easily find professionals experienced with the sale of their type of business, who from experience and the information gathered by the owner can find the right buyers for their business and get their clients a good return on their investment.
A gas station owner that follows all of these steps, from collecting information to selecting transaction experts, will sell their business quickly and easily.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|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.
|Peter Siegel MBA, BizBen Founder, ProBuy, ProSell, ProIntermediary Programs
Founder Of BizBen.com (since 1994). I am the Lead Advisor for the ProSell, ProBuy, & ProIntermediary Programs. I consult daily with buyers, sellers, and brokers daily about buying and selling California small to mid-sized businesses. Call 925-785-3118.
|Jack Oh, Business Broker: LA, Orange Counties
Business broker and real estate services in the Los Angeles and Orange County areas. 10 years experience with great negotiating skills. To sell a business or buy a business in the LA or Orange County Areas phone Jack and his team at 562-787-4989.
|Mani Singh CBB, M&AMI, Business Broker, Southern California
I have successfully represented clients sell & acquire multitude of businesses ranging from Gas Stations, Liquor Stores, Markets, Super Markets, Smoke Shops, Postal Stores, Restaurants, General Retail, Auto and Construction Related. Phone me for assistance with selling or buying at 951-296-7646 Cell
|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.
|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.
|Helen Yoo, New Century Escrow - Escrow Services In Southern California
New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.
|Harry Sidhu, CBB, Broker: SF Bay Area, Central Valley, SAC Region
Assisting both sellers and buyers of businesses - dealing mainly with Liquor Stores, Grocery Markets, Gas Stations, Smoke Shops, Restaurant Related, Retail Related, Service Related. Serving SF Bay Area, North Bay, Sacramento area. Call Harry Sidhu, CBB for assistance at 510-366-6130.
|Related Articles, Events, Blog Posts, Discussions, Videos, Interviews|
|Selling A Gas Station Successfully: Tips For Gas Station Owners And Sellers
Gas station owners often make the process of selling their business longer and more expensive than it needs to be. By accomplishing several important steps before even looking for potential buyers, owners will be able sell their businesses in a fraction of the time it would take them normally.
|Tips On Successfully Buying A Gas Station Business That Pumps Out Profits
Buyers who think they want to buy a gas station don't realize that finding the station to own in this industry & determining its fair price pose more complex problems than buying most types of small businesses. Peter Siegel, MBA (gas station financing expert at BizBen) at 925-785-3118 explains.
|Is There Such A Thing As Paying Too Little When Buying A Small Business?
We all understand the idea of paying too much for a small business. But is there such a thing as not paying enough? That seems like an odd notion, but I'm familiar with situations in which a buyer acquired a small business for a figure substantially under what probably was market value.
|How To Determine Whether The Buyer For Your Business For Sale Is Sincere
A problem owners encounter when offering a CA business for sale is that not all so-called business buyers are qualified to make the purchase. It's frustrating and costly to waste time showing non-qualified buyers the business. Here are ways to identify time wasters so the focus is on real buyers.
|Top 100 List: This Week's Top Motivated Business Buyers & Their Requests!
If you're trying to sell a business - check out this week's top 100 business buyers - one of these buyers may be looking to buy your type and location of business! This list is updated weekly - make sure you check it frequently! Are you searching to buy - get on this list and reach seller direct!
|If You Plan To Offer Seller Financing: 3 Things Owner Sellers Need to Know
When selling your business, offering seller financing is a great way to help your business standout from others on the market and it is also a good strategy to consider that can help you close a sale. Peter Siegel, MBA (BizBen ProSel Program & Financing Expert) explains. Reach him at 925-785-3118.
|I am Buying A Business: Should I Buy The Property As Well? A Good Decision?
There are advantages and disadvantages to owning commercial property. Here are a few questions to ask when it comes to deciding whether or not to buy the property along with the business. Peter Siegel, MBA with the BizBen ProSell Program reviews this issue with potential sellers and intermediaries.
|Financing Advice: Showing Add Backs To Get Business Acquisition Financing
When seeking business acquisition financing, it helps to review a seller's addbacks as a source of funding to service the debt service. But explain them correctly. Peter Siegel, MBA business acquisition financing expert and advisor at 925-785-3118 covers this topic on financing a business purchase.