A gas station can be a steady small business to own – the high demand for gas and the random assortment of necessities sold in attached convenience stores make gas stations a business that generates lots of volume with minimal advertising. However, there are a few questions that one needs to ask before getting into the business.
1. What kind of gas station should I buy?
Contrary to what the name entails, gas stations often do not sell just gas. In addition to selling gas, gas stations are often equipped with convenience stores and toilet facilities. Bigger gas stations may include car washes, car services, and restaurants. Due to the decreased profit that one makes on gas due to rising oil prices, having more to offer other than gas may be more beneficial.
Additionally, you have the option of either buying into a franchise or becoming an independent retailer. As a part of a franchise, you are associated with a big brand which often mitigates any environmental problems you may face. However, this also means that you are required to buy the company’s gas and do not have much room for negotiation if you disagree with company policy. Moreover, the company has the right to open up other gas stations which can eat into your profits through increased competition.
On the other hand, if you choose to become an independent retailer, you are able to buy your gas from independent distributors and determine your own operations. You may also face minimal interference if you decide to sell your gas station (whereas with a franchise, the parent company can cancel the sale). However, being an independent retailer brings about complex problems which come with running a business and also makes you responsible for things that the parent company would take care of, like environmental problems.
2. Am I able to purchase a gas station?
Before purchasing a gas station, you must determine whether you are able to purchase a gas station. Do you have the time and the finances to operate a gas station? Gas stations often operate for a majority of the entire day and will therefore require more working and irregular hours than a regular 9-to-5 job; especially if you decide not to hire someone to run it for you. And although purchasing a gas station may be an attractive investment, you must be prudent with your initial projections and therefore be mindful of the financial issues and your financial options in purchasing a gas station. How much money do you have to put into the gas station and if you don’t have enough, what kind of loans are you eligible for? Gas station financing is available for existing business owners like you. These types of business loans are especially designed for the needs and demands of operating capital on a gas station businesses.
3. Am I able to run a gas station?
It is one thing to have the resources to purchase a gas station, but it is another thing to keep it running smoothly. A gas station is a business which must generate profit to keep afloat and if you do not have the knowledge needed to run such a business, it might come at a huge financial and personal cost to you. As a business owner, you must understand the entire operation and anticipate any issues facing your business; for example, theft and crime can threaten your safety and the safety of your employees so you must think of deterrents or plans to combat the issue.
Establishing what kind of gas station to purchase, whether or not you can purchase a gas station, and whether or not you can run a gas station are what should be considered before you get into a gas station business.
Sam is an expert in small business financing and has been CEO at Shield Funding for more than a decade. The company has funded more than 1000 small businesses and has been a significant contributor to the phenomenal growth that many of those companies have experienced.
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