how to open a gas station franchise

How to open a gas station

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What to know before buying a gas station franchise?

So, when buying a gas station, some of the important factors to evaluate include:

• The results of an environmental site assessment evaluating the environmental history of the gas station property and, if needed, a sampling and study of the underground property;
• The need to have mandatory double-lined tanks;
• State-specific laws concerning gas stations;

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How much does it cost to start a gas station?

When starting a gas station the scale of such a business will determine your startup costs. Capital required for this investment will range from $1,300,000 to $7,500,000. Apart from the scale of the business, other variables are involved. Such variables have to do with where the business will be located among other things.

How to run a successful gas station business?

• Build and Manage Supply Chains;
• Encourage Impulse Buying;
• Reduce C-Store Costs;
• Boost Gas Station Sales;
• Create Automated Business Processes.

How to own a gas station, own a gas station?

To open a gas station, consider becoming part of a franchise, which will allow you to use the trademark, products, and business model of a larger company. Alternatively, you can open your own gas station if you want more control over your business and profits.

Is owning a gas station profitable?

Currently, gas stations and their corresponding convenience stores are some of the most profitable businesses in the United States. Across the country, there are over 100,000 gas station/convenience stores which bring a cumulative of over $400 billion revenue each year.

Is franchising a gas station profitable?

Gas stations and their corresponding convenience store or food outlets rank as one of the most popular and profitable franchises in the United States. With over $400 billion in revenue every year, and more than 100,000 gas station/convenience stores operating all over the country it is clearly a popular business model.

Is a gas station a good investment?

Gas stations are a great business to franchise because the demand for fuel in America is constant and not going anywhere. Our country literally runs on gas. People need to drive to work and trucks need to carry goods across country. Gas stations are a $250 billion a year industry.

How much does it cost to open a gas station in USA?

As we mentioned before, starting a gas station has a high financial entry barrier. You should expect to secure at least $300,000 to cover the following startup costs: Purchasing the location.

How much does a gas station owner make?

In general, though, you can expect your earnings to be anywhere from $35,000 to $150,000 per Million Litre Fuel Sales and convenience store sale from 18% to 25% for overall sales including cigarette and Lottery sales. Overall gas station may be 8 to 15% Cap rate, depending on location and condition of the business.

How much does a gas station cost?

The total initial cost typically runs between $250,000 to $2 million for a small gas station, although there are some less costly local chain options.

What should I know before buying a gas station?

Questions to ask when buying gas stationAre there any environmental issues? ... Are there any tanks and pumps issues? ... Are the financial statements accurate? ... Are sales diversified? ... How much competition is there? ... How is the real estate being handled? ... Is the gas station franchised or unbranded?More items...

What makes a gas station successful?

What makes a gas station successful is its location, strong fuel sales, additional revenue streams and how well its managed. These key elements are the foundation for a successful gas station business. Stations in great locations sell quickly, for high value and usually with competitive buyers.

How much does it cost to own a Chevron?

How much does it cost to open a Chevron gas station franchise? The average cost is $1.5 million to $2.5 million per unit. You'll also need a minimum liquid capital of $500,000 to qualify. In this franchise review, I break down the average annual profits and disadvantages of Chevron below.

How much is needed to build a gas station?

Conclusion. If you're interested in starting a gas station, you can expect to pay around $2,448,400 for a standard 3,200 square foot building. This price includes the land, fuel tanks, pumps, exterior signage, and various types of equipment to get your gas station up and running.

How do you manage a gas station?

Make sure that your gas station meets the required local, state and federal requirements. ... Establish your hours of operation and open promptly at the chosen time. ... Hire punctual and reliable employees. ... Take inventory regularly. ... Run cash register reports at the end of each shift. ... Take note of the shift totals on a ledger.More items...

How do you open a gas?

Turn the fuel cap counterclockwise to open it. Once your gas tank door is open, turn the fuel cap counterclockwise, then start pumping your gas. Your car may have a locking gas cap on it. If it does, simply take the key and insert it into the gas cap, then twist it counterclockwise to unlock it.

What is the most profitable franchise?

Top 14 Most Profitable FranchisesMcDonald's. Units in operation: 39,360. ... Dunkin Donuts. Units in operation: 12,800. ... Taco Bell. Units in operation 12,800. ... Subway Franchise. Offers Financing: Yes. ... Anytime Fitness Franchise. Units in operation: 4,904. ... Sonic. Royalty: 2.5% - 5.0% ... Planet Fitness. Royalty 7.0% ... Orangetheory Fitness.More items...

How do gas stations make money?

Station owners make most of their profits in their stores, on sales of food and drinks, as well as alcohol where sales are legal. “The idea is to have a very competitive gas price, and when they go in the store, you can make money off that transaction,” Lenard said.

What is the profit margin for gas stations?

Gas retailers receive a fraction of the price listed on the sign–their net profit per gallon is around $0.03-$0.07–after factoring in costs like labor, utilities, insurance, and credit card transaction fees. This puts the net profit margin of a gas station at less than two percent.

How much do Chevron owners make?

Their data shows a net income of $335,000 for one units after all expenses. Average gas sales: 38,000 gallons per month. This sounds like a lot of gas (and it is), but it would only mean $5,700 in gross revenue for an owner making $.

Due to the spread of the coronavirus, is this business essential?

Yes. Based on current information across multiple states with emergency orders, this business provides essential goods and services.For more inform...

What are the costs involved in opening a gas station?

The startup costs associated with opening a gas station business are substantial. According to JUX Law Firm, business owners should expect to spend...

What are the ongoing expenses for a gas station?

The ongoing expenses for gas station businesses are high. Gas stations must pay for the fuel they sell, which alone often runs over $1 million annu...

Who is the target market?

A gas station business’ ideal customer is either a family that’s traveling or a long-haul truck driver. Traveling families won’t purchase a lot of...

How much can you charge customers?

The price of gasoline fluctuates on a daily basis, but most gasoline station businesses don’t try to make a lot on the fuel they sell. Instead, the...

How much profit can a gas station make?

Gas stations can generate millions of dollars in revenue, but much of this is often consumed by ongoing expenses. In an example that JUX Law Firm p...

How can you make your business more profitable?

Gas stations can add revenue streams and increase their profit margins by incorporating sideline businesses. Car washes, auto shops and restaurants...

Is this Business Right For You?

Anyone who has an acumen for business and enjoys interacting with people may be well-suited for running a gas station business. Understanding how t...

What happens during a typical day at a gas station?

On a day-to-day basis, a gas station business owner or their employees will need to: Accept shipments Restock inventory Prepare pre-made food and d...

What are some skills and experiences that will help you build a successful gas station?

Running a gas station business requires knowledge of many different aspects of business. Business owners must identify and source products that cus...

Should You Open a Gas Station Franchise?

Many new gas station owners decide to open a franchise rather than starting from scratch. There are many benefits to franchising. For example, the franchisor may offer you valuable training and information. They also might have corporate legal counsel that you can consult with. By opening a franchise, you will also do business under a known brand name proven in the marketplace. This means that there will be an existing customer base to draw from.

How to make the most of gas station?

You chose your location strategically, so you should make the most of it by having clear signage outside your gas station. It is a good idea to have signs that drivers can see from a few blocks away.

What is the importance of location in gas stations?

Location is a significant factor in the success of your gas station. Consider locations in areas with heavy traffic or just off freeway exits. Customers will often choose to visit the nearest gas station when the fuel light goes on.

What are your products and offerings?

Your products and offerings — This includes how many gas pumps you will offer, air stations, car washes, auto repair services, restrooms, and convenience store offerings

What is the best way to build a successful gas station?

Creating a good marketing plan is a crucial step toward building a successful gas station. If you are opening a gas station franchise, you will probably benefit from drawing from an existing customer base.

How many employees are needed at a gas station?

Unfortunately, gas stations can be susceptible to crime. For safety reasons, it's a good idea always to have at least two employees at the gas station. It would help if you also considered installing visible security cameras outside and inside your station's common areas.

How to determine if a retailer is price gouging?

Most states determine whether a retailer is price gouging by comparing prices before and during the emergency. If you increase your prices by ten percent or more during a state of emergency, many states will consider that to be price gouging. Other state laws provide that retailers shall not sell goods at excessive prices.

Is this Business Right For You?

Anyone who has an acumen for business and enjoys interacting with people may be well-suited for running a gas station business. Understanding how to operate a business will help ensure that a gas station is run efficiently, and it helps to be a people person because gas stations often serve hundreds of customers in a single day.

How much does it cost to open a gas station?

The startup costs associated with opening a gas station business are substantial. According to JUX Law Firm, business owners should expect to spend around $300,000, which breaks down as follows:

How do gas stations attract customers?

Gas station businesses attract customers by selling gasoline, which most people need for their vehicle. Gasoline is just one of the many products that gas stations may sell to travelers, though. Many stations also offer foods, drinks and convenience store items. According to IBISWorld, the gas station industry brings in $89 billion annually ...

How many employees do gas stations need?

Most gas station businesses need at least a few employees to help run the station. Even a small gas station will require several people to cover all the hours that the station is open. Employees, however, often aren’t paid very much. In many cases, they make minimum wage or just slightly more.

How do gas stations keep customers coming back?

Gas station businesses can keep customers coming back by providing low fuel prices and clean facilities. In many cases, these traits alone can set a gas station apart from much of the competition.

How to market a gas station?

How to promote & market a gas station. The most effective way to promote and market a gas station business is through onsite signage. Highly visible signs are the best way to attract passing drivers, and people aren’t likely to go far out of their way for fuel.

How do gas stations make money?

A gas station business makes money by selling products to drivers and passengers. Stations are named for their primary product: gasoline. This is just one of many products that gas stations sell though. Most gas stations also offer:

What to include in budget estimate for gas station?

You will need funds for set-up of your gas station. Include an estimation of costs for promotions, advertising, and signage. Make sure you have an estimate of costs of start-up inventory and cash you will need to have on-hand.

How to get a good rate on a gas loan?

Shop at banks to get a good rate on a fuel loan. If you cannot get enough start up funds from a loan from the better business bureau, you can try for a more traditional business loan. Make an appointment with a loan officer from a bank. Show him/her your business plan for your gas station.

How to start a gas station?

1. Draw up a business plan for your gas station. Discuss it with an accountant to get a realistic professional opinion about your estimated expenses and income. A business plan involves several key pieces of information and is more than just a simple outline. You will need to include as much detail as possible.

What is a franchise agreement?

A franchise agreement allows a franchisee (you as a business owner) to use the trademark, products, and business models of a larger company. For example, if you entered into a franchise agreement with Sunoco, you would essentially own a Sunoco station. Franchisees have to pay royalties to the parent company.

What to consider when choosing gas stations?

Consider the local competition. You will want to avoid an area that is already saturated with gas stations.

What is the top thing a consumer thinks about when choosing a gas station?

Market analysis has shown that one of the top things a consumer thinks about in choosing a gas station is location.

How many people edit wikihow?

X. wikiHow is a “wiki,” similar to Wikipedia, which means that many of our articles are co-written by multiple authors. To create this article, 31 people, some anonymous, worked to edit and improve it over time. wikiHow marks an article as reader-approved once it receives enough positive feedback.

What is phase 1 assessment?

The Phase 1 Assessment is a requirement of the SBA (pg 384) if you want to obtain a loan for a gas station business. It will allow you to back out of a purchase agreement if the assessment is unfavorable and your agreement includes an environmental contingency clause.

What is the lifeblood of gas stations?

Obviously, gas is the life blood of gas stations. It’s the core revenue source and marketing tool you need to stay in operation and generate profits. That means you must assess the ownership of the tanks and pumps at a potential location before you purchase or lease.

What do you need to know when planning a gas station?

Gas Station Products and Services. When planning your gas station, you need to consider the products and services you want to offer beyond gasoline. Gas stations have gasoline as revenue to keep the business in operation, but it’s the sales inside the convenience store that make the business profitable.

How much does it cost to open a gas station?

Speaking of funding, getting into the gasoline station business isn’t cheap. The initial costs of opening a gas station ranges on average from $250k to $2 million even for a small gas station.

How to get your gas station noticed?

A great way to get your gas station noticed is through signage. You’ve seen the giant gas station billboards all over the country, and there’s a reason for it. Many potential customers just drive to the nearest gas station, so you want them to know that your gas station is near and ready for business.

What is the prime determiner of the amount of traffic you will attract?

Open a Gas Station 101: Your location is the prime determiner of the amount of traffic you will attract.

Why do you need to research local wholesale fuel suppliers?

It’s up to you to research local wholesale fuel suppliers (or petroleum marketers) in your area to see who has the best prices for your fuel because gas suppliers often make money from the percentage of your sales. You need to compare rates to maximize profits.

What to do if gas station is marked by crime?

Whether or not it’s warranted, gas stations have a reputation for theft and burglary, and if you’re in an area marked by crime you might need to shell out for extra cameras or lights to deter nefarious activity .

Which states have the highest gas sales?

This is not to say that gas stations outside of the metropolitan sprawl are destined to fail — in fact, rural states such as Wyoming, Nebraska and Iowa actually have the highest gasoline sales in the country. So what’s the secret? What is the ideal gas station location?