Calculating the monthly profit margin of a gas station is essential to determine potential earnings. First, total all revenue, including sales inside and outside the store. Do not count discounts or refunds. Next, add up all expenses like payroll, utilities, taxes, and fuel costs. Subtract expenses from revenue to get monthly net profit.
A station’s location significantly impacts its bottom line. The average gross margin on gasoline is 15 cents per gallon. After expenses like rent and labor, about 2 cents per gallon profit remains. Convenience store sales generate higher profits than gasoline. Additional contributors are car wash services and food sales.
Gas stations average a 1% net profit margin. With gas at $3.50 per gallon, they net 3.5 cents profit per gallon sold. West Coast owners average $60,000 in annual profit. Midwest owners average $61,000. South owners average $66,000. Building a new four-pump gas station costs $500K. Upgrading an existing station costs $200-300K. SBA loans best finance stations. Starting a profitable gas station takes significant effort and capital.
Gas station owners can earn between $40,000 – $100,000 per year depending on location, size and type of gas station, and additional services offered. With slim profit margins of $0.03-$0.07 per gallon on gas sales, you can enhance the profitability of your gas station by adding a convenience store, car wash, mechanic services, or food options.
Gas stations that offer additional services such as car washes or mechanic services tend to have higher profits. Indeed, the constant demand for fuel in America anchors the business, making gas stations a viable option for franchising.
Owners’ profits per gallon vary after accounting for operational costs such as credit card fees. Nevertheless, gas station owners can expect an average net profit of 3 cents per gallon from gasoline sales.
The average annual salary of gas station owners varies by region. For instance, owners in the Northeast are likely to earn about $69,000 per year. Across all privately-held gas stations, revenue growth is limited, and average profit margins are below 2 percent. A good profit margin is considered to be 10%.
In Canada, gas stations manage approximately 3c a litre profit after expenses. The gas station industry in this country has an annual worth of around $30 billion and is served by 6,613 gas stations.