Like many other businesses, making the right choice from the numerous triple net lease or NNN gas stations for sale can be a highly profitable investment. Even though some factors such as road constructions and gas prices can affect business, gasoline stations can still turn in good profits if well managed.
Over the years, the demand for gas has been constant in the U.S. and it doesn’t seem like it’ll decrease anytime soon. We all know that the dream of every innovator is to totally replace petroleum with other energy sources. However, that’s not been realized yet and gas is still extremely useful and will likely remain in use longer.
According to results from Statista, United States gas station retail sales were estimated to reach nearly $36.5 billion in January 2021, up from 35.9 billion attained the month before. Also, in 2020, the largest privately-owned convenience stores and gas stations in the North American country was Pilot Flying J, which generated a revenue of nearly 30 billion U.S. dollars.
Gas stations constitute a $250 billion/year industry with over 120,000 stations across the country. The best part is that over 80% of the stations have convenience stores attached, making it an even bigger business.
6 Things to Consider Before Investing in a Gas Station
Now is a great time to go into the gas station business, and if you want to check out NNN gas stations for sale, you must first consider and evaluate several factors as a prospective purchaser.
Nature of the Gas Station
All gas stations fall within two categories – they are either franchised or independent. Franchised stations are owned and operated by a national supplier, while the independent ones are not supported by any national supplier; they operate their business solely.
Franchised stations are beneficial in terms of name recognition, trademarks, trade designs, etc which they’ve associated with the national brand. In purchasing a franchised station, the buyer or franchisee goes into a franchise agreement with the owners. Before getting a station, always evaluate the advantages and disadvantages of both types.
If the station is franchised, talk to your lawyer about; the terms of the agreement, quotas/requirements for gas sales, ownership issues, gas pumps and tank maintenance.
Availability of Convenience Stores
Although gas sales are the central part of the business, most gas stations make a good part of their profits from convenience stores. For a fact, margins are low in the gas station business, and selling other items can be where you rake in profits.
In a station, owners can open convenience stores to sell products like candy, sodas, cigarettes, etc. The significant revenue this addition brings is why you’ll rarely see a gas station without a convenience store.
Therefore, before you search for a gas station for sale, make sure to consider this point.
Pumps and Tanks Ownership
Station pumps and gas tanks are the most important assets, as they can affect your daily activities. They’re also a critical factor in determining your business profitability. In some cases, the seller’s pumps and tanks belong to the national franchisor for franchised stations and property owners for NNN lease gas station properties.
Of course, when looking for a gas station package for sale, be prepared to first determine who owns the pumps and tanks, whether you’ll be buying them with the station, the terms of the lease (if the station is leased), and the condition of said pumps and tanks.
Every gas station One major issue you might face with every filling station is the issue of contamination. Therefore, considering the environment of your station is very important.
Discovering contamination, especially after the purchase of the station, might affect you significantly. In the worst-case scenario, you may have to employ expensive remediation, which could lead to a business shutdown or limitation of the future operations and profitability of your station.
When purchasing a station, consider utilizing the environmental contingency clause in your agreement. That way, you can determine the station’s environmental history, putting you on the safer side.
Familiarity With the Risks of Investing in a Gas Station
Investing in any business has its risks, and gas station investment isn’t any different. Gas station investments carry distinct risks, more than most other businesses.
Traffic is a huge determining factor, and you’ll have to be extra careful when planning long-term. You’ll also have to be careful with all constructions, they’re capable of blocking access to your station and should therefore be planned.
You must also understand that the environmental history and future of the station may not be in your power but are critical. Therefore, research adequately on the station you want to buy, learn about its risks, and lay down strategies to tackle them on time.
Your Business Plan
Decide your focus and direction by drafting a befitting business plan. Make efforts to check off various necessities, so you have no difficulty setting up your business.
The most important thing to do is first decide on the products and services your gas station will offer. You’ll inevitably be selling gas, but there are many other services you can offer. Choose between a convenience store, mechanic services, car part sales, and similar services.
You must also plan on your staff and draft the hierarchy. Decide on the number of staff you need and assign posts, so everybody knows what to do, who, and when to report. It would help if you also estimated workers’ salaries..
Lastly, plan your advertising strategies with insurance, taxes, and other expenses factored into the plan. Having a good business plan and marketing strategy is the first and most crucial step towards success in any business.
Gas stations increase passive income. Nevertheless, running one is still an excellent business. Whatever choice you make, it’s critical you consider all the necessary factors before going into business.
With everything in place, the next step will be contacting the right agent for a list of suitable NNN gas stations for sale so you can make a choice. Another option here is to search up “gas station business for sale near me.”
The gas station industry is still very much profitable and open to willing investors, and Buy NNN properties can help you delve into this business so you get started on the right footing.