Share This Info:  

Buying A Gas Station: What To Look For When Doing Due Diligence

See All Discussions   •   See All Contributors   •   All New Discussions & Comments

Comments & Replies: 1     Views: 11390     Posted By: Peter Siegel MBA  Peter Siegel MBA: BizBen Founder, ProBuy/ProSell Program Director



Topics: Buying A Business, Due Diligence     Tags: buying a business, due diligence



Doing your due diligence when buying any type of business is extremely important. Regardless of what type of business you are buying there are certain things you will always look at such as, financials, equipment, legal issues etc. However, certain business present a whole different and unique set of issues that need to be investigated. Gas stations with C-stores are one of these businesses that require you to do a little more research before you buy. For example; you are going to want to look into any environmental issues that may exist or that may present themselves in the future. Any environmental problems found after the sale will be your problem to deal with.

It pays to have an environmental survey done before making the purchase. You will also want to instigate a certified property survey or request to receive a copy of a recent certified property survey. Potential buyers must consider rent and pool margin on gas. If there is a car wash you'll need to inspect the age of the car wash equipment. Most car washes last about 10 years. Regarding the lease situation; if the land is owned by the oil company that’s a plus; if a third party owns the land, check the underlying lease between the oil company and the landlord. You'll also want to check the transfer fee and security deposit charged by the oil company.

Take a close look at the financial records. A gas station owner that also has a convenience store, car wash or other amenities may claim that there are cash sales included in the store's total revenue or sales. Bottom line, if they can't prove it can't be added in to the value of the business. Insist on seeing at least the previous two years’ worth of financial statements and have them checked by an accountant or CPA. Find out if the inventory included in the price of sale.

If you’re buying a franchise keep in mind that you will probably be competing with the same brand. Find out how many other franchisees are in your area and determine if the market is already saturated. Another thing to consider if you choose to go the franchise route; as a franchisee you are obligated to purchase your gas and products from the franchise in contrast to an independent owner who can competitively source their products from available distributors. That leaves some room for price negotiation; however, most enter into long-term contracts with suppliers in order to take advantage of discounts.

Would like to hear from other Advisors on BizBen what thoughts they have on this topic. Please feel free to add a Comment (and reply on any Comments contributed by others).

If you have other questions or topics that you would like discussed on BizBen regarding buying, selling, valuing small to mid-sized businesses etc. please phone me (Peter Siegel at BizBen) at 866.270.6278.

Replies To This Comment
 
Contributor: Business Broker: LA County Area  Post ID: 976
Many excellent points, Peter. One thing I would add for buyers. Before you pull the trigger, contact the owners of your closest competitor gas stations. Make sure there aren't any brand changes coming anytime soon. I've dealt with situations where someone buys an unbranded station in hopes of changing to a branded station that is currently not in the immediate area. But then a major corporate merger happens or a one-off independent operator gets the same idea you have. The recent buyout of United Oil by a New York investment firm created situations where you saw two of the same branded stations at the same intersection. It's extremely important that you know you're headed in the right direction when you purchase. And you can't read the future unless you've spoken with the other players in your game.



  Helpful Resources To Assist In Selling And Buying California Businesses
Manjit Singh: SF Bay Area - Business Broker

Assistance in the San Francisco Bay Area. Contact me about buying or selling a restaurant, liquor store, gas stations, markets, and c-store businesses. If you are looking to buy or sell a SF Bay Area liquor store, market, c-store, restaurant, etc phone me direct at 510-417-9429.

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Matt Sadati, Business Broker, SF Bay Area, Northern CA

I have Engineering and Law, JD degree, with over 30 years of experience in all phases of entrepreneurship. During the past 15 years my concentration has been in business of mergers and consulting. I have owned and operated over 33 businesses each having one to 30 branches.

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.

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.

Helen Yoo: Escrow & Bulk Sale Services - 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.

Lee Petsas, Business Broker - Orange, San Diego Counties, Inland Empire

UBI Business Brokers has been successfully selling businesses in Southern California since 1965. Our Agents have over 100 years of experience in selling small to medium size businesses throughout Southern California. We service Orange County, Inland Empire, San Diego. Phone Lee at 714-363-0440.

Prabhjot Randhawa, Broker: SF Bay Area, Northern Central Valley

I'm a Business Advisor at Liberty Business Advisors of San Fransisco. I have over 20 years of experience in all phases of entrepreneurship. During the past 15 years my concentration has been in business of mergers and consulting. I have owned and operated over 10 businesses.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
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.

Valuing A Business - Do You Add The Inventory Amount To The Price Or Not?

A business buyer asks how to handle the inventory amount in the purchase price of a business. Do you add the inventory value to the business value? Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor ) answers this question with the BizBen Network of advisors.

Why Deals Fall Out: Unrealistic High Asking Prices Are Usually The Reason

The unfortunate truth is that approximately 50% of all small business sales transactions fall out. While failed transactions can happen for a many reasons, Peter Siegel, MBA (BizBen Director & Business Purchase Financing Expert) discusses the main reason deals fall through; steep asking prices.

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.

Buyer Beware: Does A Company's Culture Effect The Sale Of A Small Business?

When purchasing a small to mid-szied CA business, there are a many items to evaluate. One area that is often overlooked is the business's office culture. Peter Siegel, MBA with BizBen discusses with business buyers the importance of understanding how the business "feels" on a day-to-day basis.

Why Isn't My Business Selling? 6 Great Questions To Ask Yourself For Answers

It can take months, sometimes longer to sell a small business. Here are 6 questions from Peter Siegel, MBA (Business Purchase Financing Expert, ProSell Program Advisor with BizBen) at 925-785-3118 to ask yourself to help you determine why your small to mid-sized California business isn't selling.

Absentee Run Small Businesses - Is That Really A Possibility For Buyers?

Is buying a absentee run small business really a possibility? Peter Siegel (BizBen ProBuy Director) gets asked this question a lot in his consulting sessions with business buyers. Read more about what other Advisors and Intermediaries feel about this topic on this popular BizBen Discussion!

Buy A Business Or Start From Scratch? 5 Key Differences For Business Buyers

Some buyers believe it's better to start a business from scratch rather than buy an existing enterprise. While this may be good advice in some cases, usually it's not the best strategy. Here are five tips to help a buyer make the right decision from from Peter Siegel, MBA (BizBen Director).

See All News, Tips And Events

Business Purchase Financing SBA Loans
Health Care Broker Ralph Santos
Rob Harman Business Broker SF Bay Area
Willard Michlin Due Diligence Services
Facebook
Twitter
Linkedin
Google Plus You Tube
Vlogs and Podcasts


Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bakeries
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Hotels/Motels
Ice Cream Shops
Juice, Smoothie Shops
Laundromats
Liquor Stores
Markets, Marts
Nightclubs
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million




BizBen - Where California Deals Get Done! 925-785-3118
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2019, All Rights Reserved

               Vlogs and Podcasts  
Join Us On Social Media - Content Updated Daily
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.
Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 
Search BizBen.com

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Valuing A Business - Do You Add The Inventory Amount To The Price Or Not...
Read More News
Tips On Successfully Buying A Gas Station Business That Pumps Out Profit...
Read More News