HOW TO BUY OR SELL A GAS STATION BUSINESS

Gas Station businesses are very popular in the business buying and selling community. They sell a product that almost everyone needs, on a weekly basis, so it is a dependable business with a steady source of income. If you are thinking about selling a gas station business, the key thing to make sure of is that you get the highest price to make the most amount of money for all your hard work in building or running a successful and profitable gas station. If you are thinking of buying an existing gas station business, the key thing that you are looking to do is to buy a successful and profitable business at the best price. We put together this guide on how to buy or sell a gas station business to help you prepare for your next steps so you will be ready when you feel you are ready to get started. First we will talk about selling your gas or petrol station, and then we will talk about buying an existing gas station business.

8 Steps To Sell Your Gas Station Business

How To Sell A Gas Station Business

There are a few steps you need to take to get ready to get your Gas Station Business listed for sale that will help to make the selling process go more smoothly.

Steps To Sell A Gas Station Business

1. Compile Your Business Records and Reports 2. Value Your Gasoline Station Business and Property 3. Perform Any Needed Improvements or Maintenance 4. Hire a Commercial Real Estate Agent Business Broker 5. Additional Items to Consider When Selling Your Gas Station 6. Bring Your Own Buyer 7. How Long Will It Take to Sell Your Gas Station Business? 8. How Much Does A Business Broker Charge?

1. Compile Your Gas Station Business Records and Reports

The very first step to selling your gas station is to pull all your financial documentation, and business documents, together and get them organized and ready for a potential buyer, and your selling agent, to go through. A good rule of thumb is to try to pull together three years worth of these records if you can. But, don’t worry, you don’t have to pull it all together in order to get your business listed. Start with what you can, with the understanding that you should keep working on pulling together more. Your business broker will just need some of the information to get started and get your listing up and visible for potential buyers.

Types of Business Records and Reports

• Profit and Loss Statements • Balance Sheets • Full Tax Returns • Annual Reports • Inventory Reports • List of All Your Vendors, Partners, Maintenance Companies, Gas Suppliers • Any Current Lease Agreements or Loans • Licensing, Permits, and Inspection Reports

2. Value Your Gasoline Station Business and Property

Once you have all your paperwork in order, and ready. You should start thinking about the value of your business. It’s good to do this first on your own, so you can give your business broker a number that you have in mind. They will do a valuation as well, but it’s good for you to know your ballpark figure before you get started.

How to Value a Gas Station Business

Putting a value on your gas station business can be a little difficult. The good news is that for most gas stations, the value is pretty high because of the typical guaranteed sales that come through on a regular basis. The value of your business will be dependent on many different factors, including location, equipment, brand popularity, assets, and local competitors. You will definitely want your business broker to do a full evaluation as well, based on the information that you provide to them for your business records, and the current market conditions that they have a lot of knowledge about. Your business is worth what someone will want to buy it for, which is why the paperwork history is important.

Factors That Can Help Determine Your Gas Station Business Value

• Property Value • Inventory Value • Location of Your Gas Station • Quality and Maintenance of Your Facility • The Traffic Patterns Around Your Gas Station • How Many Gasoline Pumps You Have • Convenience Store Size and Sales • Car Wash Quality and Sales • Brand of Gas You Sell (or Unbranded) Each of these types of things could increase, or decrease the value of your gas station, and bring more or less buyers to the table to be interested in purchasing your business.

3. Perform Any Needed Improvements or Maintenance

The next step to selling your gas station business is to get it looking good and ready for potential buyers. The easiest and cheapest thing you could do is to clean the place. Maybe even do some pressure washing in the outside areas if it needs it. Then you may want to apply a fresh coat of paint, or some touch up, inside and out. These two items will really add to the curb appeal, and it shows the new buyer that you care about your business and how it looks for your customers. Next you may want to replace anything that is broken, make sure you perform any upgrades, repairs or maintenance, on anything that needs it. This will give your potential buyers confidence that they aren’t buying something that they need to do a lot of potentially costly work on.

4. Hire a Commercial Real Estate Agent Business Broker

Listing your business with a professional business broker is the best way to sell any business. A commercial real estate agent, that is a business broker, has the ability to sell your commercial property, and business. They bring with them expert knowledge of the business selling market, and will ask you the right questions, and for the best documentation, to help bring in a potential buyer and get it sold for you. If you’re looking to buy or sell your Gas Station business you should use an experience professional who understands the market and can save you time and money. For more information, contact Michelle Mendenhall as she is a Certified Business Broker that is a member of the IBBA (International Business Brokers Association), and a Commercial Real Estate Specialist. Michelle Mendenhall Professional Business Broker, IBBA Commercial Real Estate Sales & Leasing Associate Phone: 916.459.7526 DRE #02116152 LocalGirlGoesCommercial.com michelle.mendenhall@localgirlgoescommercial.com michelle.mendenhall@expcommercial.com Don’t worry, your information will be kept confidential, and be protected from being disclosed to people that it should be by requiring a Non-Disclosure Agreement to be signed for getting access to certain information. Your Business Broker should sign an (NDA) and have potential buyers sign an NDA, to protect your business. Talk to your business broker about an NDA. Your business broker will respond to potential buyers, and leads they receive from their advertising platforms. They will have conversations with any potential buyers, and won’t engage you until they have someone that is a good prospect for buying your business. They will also arrange any meetings needed, showing of your business to the potential buyer. This may include income verification to show that they could actually afford to buy the business, to eliminate unqualified buyers or those individuals that are just looking but can’t actually buy your business at this time due to their financials. They will get your gas station listed on the best advertising platforms for your business to gain as much exposure to potential buyers as possible. Once there is a buyer that is ready to make an offer to buy your gas station, they will ensure the proper papwerwork is documented, signed, and navigate your transaction through the escrow, and closing process, as appropriate. They have a lot of resources for marketing, and putting your Gas Station for Sale listing in front of the right buyers.

5. Additional Items to Consider When Selling Your Gas Station

Gas is a hazardous material, so there are many different laws in the United States that may include the Federal, State, County, and Local level. There may also be rules or contractual agreements in place with the franchise that you have your Gas Station Business through, or the suppliers. These are all important items to consider and have ready to discuss when a potential buyer shows a strong interest in buying your Gas Station.

6. Bring Your Own Buyer

Sometimes when a business listing is published, a buyer may come from the current owner’s local competitors, long time employees, regular customers. You never know who may want to buy your business, so if you have any ideas or insight that you could share with your business broker, it may get your business sold very quick.

7. How Long Will It Take to Sell Your Gas Station Business?

Most business owners feel that it will only take about five months to sell their business. However it may take six or eight months to sell your business. The main factor is the business market in your area, whether there is a strong pool of entrepeneurs, and the price point you choose to list your business at. The size of your business is also an important factor because if your business is very large, with a very high price, the number of qualified buyers is much smaller. The best way to speed up this timeline is to price the business at a good price, and have your paperwork in order and ready to go.

8. How Much Does A Business Broker Charge?

A business broker typically charges ten to fifteen percent for their services during the sale. If you business does not sell, they do not typically charge a fee. They will provide this information to you as you start your conversations about using them to sell your business. This is a fair price for them to earn a living, and cover their expensive advertising and marketing costs as they work to find the right buyer for your business.

12 Steps To Buy A Gas Station Business

How To Buy A Gas Station Business

There are a few steps you need to take to get ready to buy a Gas Station Business to help you to look for the best business opportunity to buy. Review our Buy A Business page for more detailed information, as this is a high level view to give you an idea on how to get started.

12 Steps To Buy A Gas Station Business

1. Decide Whether You Want To Buy or Lease 2. Hire a Business Broker 3. Compile Your Financial Records 4. Look Into Getting A Small Business Loan 5. Review Listings From Your Business Broker 6. See the Business In Person 7. Letter of Intent to Buy A Gas Station Business 8. Purchase Sales Agreement PSA for Buying a Business 9. Review Their Paperwork - Due Diligence 10. Licensing and Permits 11. Secure Capital To Make the Purchase 12. Finalize the Business Purchase

1.

Decide Whether You Want To Buy or Lease

The first question is really to decide what state and county you want to get into the gas station and convenience store business. Once you decide on the state and county, you next need to determine whether you want to buy or lease a gas station business property to run your business out of. This is a big decision, and it may come down to your financials as a gas station can cost from a few hundred thousand dollars up to and more than ten million dollars for a single gas station.

2. Hire a Business Broker

The best type of business broker is a commercial real estate agent that has an IBBA business broker certification. The business broker will help you find the best Gas Station Business for what you are looking for. An example of a great business broker is Michelle Menenhall at LocalGirlGoesCommercial.com.

3. Compile Your Financial Records

Pull together your bank account statements, the last couple of years worth of tax returns, copies of your latest couple of payroll paychecks, investment account statements, and anything else that will help you fill out your request for a loan.

4. Look Into Getting A Small Business Loan

Unless you have the cash available, you will probably want to look into getting a small business loan. Loan interest rates will vary, and you may have to come up with twenty percent down, depending on which bank you use, and what their requirements are. You may also be able to get seller financing, which would be something you can talk to your business broker about.

5. Review Listings From Your Business Broker

Now starts the fun part. Your business broker will send you over details about Gas Stations for sale listings that they think will be a good match for you. Now you can review them, and rank them for order of preference, and let you business broker know which ones you may like to schedule a time to go look at.

6. See the Business In Person

Now that you have found a gas station business that you would like to take a look at, it’s important to look for certain things while you are there that let you know if a business is a good business or not, or atleast give you an idea. If you see that the place is well kept, clean, in good shape, everything looks like it is working, you can tell that the current owner is taking care of it. A quick drive by is ok to do on your own, but if you are going to stop it’s important to schedule this with your business broker because most business owners do not want you disturbing the current tenants or employees of any business.

7. Letter of Intent to Buy A Gas Station Business

Now you have found the perfect gas station business for you, it’s time to try to buy it. Your business broker will work with you as they put together a Letter of Intent to buy the business, known as an LOI that will be submitted to the seller. The letter of intent is where you will negotiate the terms and the price with the seller.

8. Purchase Sales Agreement PSA for Buying a Business

Once you get through the LOI, and you are ready to do so, the next step is the purchase sales agreement. This agreement will document the final purchase price, and everything that you will be buying. It may include the tangible assets, inventory, equipment, furniture, and buildings. This is another document that your business broker will put together for you.

9. Review Their Paperwork - Due Diligence

Now that your offer has been accepted, and you are ready to buy this gas station that you have decided on, it’s time to start looking through their paperwork and make sure that everything looks good. Make sure the numbers make sense, that you will be making how much money you need to make, and what was declared. This is the time to ask for additional documentation to validate their numbers if you need to as well.

10. Licensing, Inspections, and Permits

During your due diligence period of the purchase, you should have discussions with the seller to ensure they are up to date on all of their licensing, inspections, and permits. You should not only talk to them, but do some research to identify which ones you may need to move into your name, if they are not under the business. A business owner that is legally operating, and in good standing, should have all the necessary things already in place, but you may have to have them updated, but you will need to look into that to be certain. The licenses and permits that you need will vary from state to state. The Environmental Protection Agency, and your state’s Department of Transportation would be some good resources to talk to or research.

Some of the Types of Things the Business May Have or Need

Fire Inspections Pump Licenses Health and Safety Protocols Underground Storage Tank Safety Pump licenses Retail Dealers License Sellers Permit Business License Alcohol Selling License Tobacco Selling License Insurance Policy, Including Coverage for A Gas Leak or Equipment Malfunction Workers Compensation for Employees

11. Secure the Capital To Make the Purchase

Now is the time to continue working with your bank, or investors, to secure the funding for the purchase. It’s critical that the money is lined up and ready to go for escrow, or whatever process is being used to make the transaction.

12. Finalize the Business Purchase

Your business broker will usually work with escrow throughout this process once the offer has been accepted and it is signed and under contract. For businesses, there are government agency approvals that have to happen, and these will all be organized by your business broker and with the escrow office. Your Business Broker is there for you to answer any questions, to get additional paperwork that you may want to review, keep pushing the process through and moving it forward. With the right business broker, this process is exciting, organized, and fun. Once the purchase is finalized, you will get your keys, and should have all the information you need to begin your journey as a business owner. Usually the seller will stay on for a while, as part of the contract (make sure it’s included), to train you or your employees to ensure a successful transition of the business for you to be successful. Have Fun! Check out our guide for more information on buying your own business. At ViralStudioX, we highlight products and services that you might find interesting. We frequently receive free products from manufacturers to test. This does not drive our decision as to whether or not a product is featured or recommended. If you click a link on this page, then go on to make a purchase, we might receive a commission – at no extra cost to you, and does not impact the purchase price of any products that you may purchase.