Cost Considerations and Financial Aspects of Owning a Gas Station
-
Owning a gas station means access to selling more items. Costs include leasing, new pumps and tanks, franchising, inventory, and cash registers. Franchise, independent, full-serve, and self-serve stations vary in profit.
-
A 2014 Reddit station owner said their $1.6 million store required a $320,000 down payment, like a mortgage.
-
Market competition also impacts profit potential. Consider capital gains from long-term investments.
-
Owning a station can be profitable but understand responsibilities. Seek industry advice.
Factors Affecting Gas Station Profitability
-
Location significantly impacts a station’s bottom line. Gross margin on gasoline is 15 cents per gallon. After expenses, about 2 cents per gallon profit remains. Convenience store sales generate higher profits than gasoline.
-
Midwest owners average $61,000 annual profit. Building a new four-pump station costs $500K. Upgrading an existing one costs $200-300K. SBA loans best finance stations. Starting a profitable gas station takes significant effort and capital.