If you are thinking about opening a new gas station or taking an existing one over, you are in good company. This can be a business that provides great opportunities for a steady income. From getting gas station financing to keeping yours up and running, here are some tips to help make your experience go better.
- Be prepared for challenges with your gas station financing. There are a few kinds of businesses that are problematic when it comes to getting financing. Gas stations, convenience stores and truck stops are all lumped together when it comes to getting financing. You may not realize how challenging it can be to get gas station financing until you try but it is. A lot of this is because this is a cash business and has different challenges and is looked at differently than other kinds of commercial financing. Do not be shocked if your bank turns you down. You can also talk to local community banks and to the credit union. Do not despair, it is possible to get gas station financing but if you go into the process knowing it will be challenging, you will find the process easier. If you own property, you might want to look into a secured loan.
- Go to the government. Look for Small Business Administration loans (SBA). The SBA has a lot of help to offer. In the first place, there are 504 SBA loans. The SBA works with what are called Certified Development Companies (CDC) to offer loans to businesses that are going to offer something that is needed in the community. That could very well be a gas station. The SBA has a number of programs that are there to help small business owners like yourself. They may be able to help you secure your gas station financing.
- As in all real estate it is all location, location, location. Perhaps more than any other business, where you put your gas station is a big deal. People may take a longer drive to that antique store or fun restaurant but they are not going to drive to an out of the way space for gas. The two things people look for when they are deciding what gas station to go to are location and price. People may even pay a little more if the space is more convenient. This is why sometimes the gas stations right by the highway may be more expensive than the ones a few blocks away. Another good place to be is near hotels.
- Be careful about security. If you go into this business, you need to get the right number of security cameras. This is not optional. Gas stations are often targets for crime and theft. This is one of the reasons gas station financing can be challenging to get. Keep your investment safe and your employees and customers safe by having the right security in place.
- Learn the business. This should be a given for all businesses but you need to really get to know the ins and the outs of running a gas station. Know what you are getting yourself into when you open or take over a gas station. For example, if you go in thinking you are going to make your money from gas sales, you will be disappointed.
- Lure people in and keep them coming back. The margin for gas sales is so small that you have to understand that this is not where you are going to make your money. Most gas stations make their money inside the store or with an attached business such as a restaurant. Your profits will come from the items you sell. All businesses that sell food need to make sure that it is fresh but if you sell milk at your gas station and it is bad when your customer buys it, you will lose that customer. If people go to use your restroom and it is filthy, they will not come back. You have to make people see the value in shopping at your store when they are getting their gas.
It is very possible to make money running a gas station but it might not be the way you think.