Buying A Gas Station

Why should I use a Gas Station Broker?

Selling or buying a Gas Station is one of the most important financial decisions you will make. A Gas Station Broker has the training and expertise to guide you through the process in a comfortable and efficient manner. He is a team player who will coordinate the efforts of your professional advisors, such as attorneys and accountants. He has handled many transactions and understands the complexities of selling and buying a Gas Station.

Questions We Will Need to Ask

Before our brokers can help you find a business there are a few questions you will need to answer.

How much money do I have to put down on this business?
Also how liquid that money is, can be crucial. Generally, we are looking for a minimum of 25% down with finances that can be obtained within 7 business days. If your money is in real estate and not very liquid, you will need to make that money liquid before we start showing you businesses. Be sure to leave enough money in the bank for working capital. A basic financial statement will help us determine your purchase power.

When do I want to buy?
Our broker will need to know if you are going to buy right away or just thinking of it in the future. In order to go through the rest of the process we will need to know that you are ready to make a decision once you find the business you like.

What type of Gas Station Experience do I Have?
Many times the Seller or even the Landlord of the property will want to know what type of gas station experience the buyer has. They want to make sure you know how to run the business profitably so they will get paid.

Confidentiality

The first step in the process to finding you the right business is for you to sign our Confidentiality Agreement. Selling a business must be kept very confidential as it may cause employees of a business to leave, competitors to use it to their advantage, or customers to leave if they find out before the seller introduces them to the new buyer. Our brokers have a fiduciary responsibility to our sellers to only show businesses to those buyers that will abide by the confidentiality guidelines.

The Education

We will then take you through an education process to explain pricing, terms, cash flow, the process, what to expect and how to make the right decision. I will be important to understand California equipment and environmental regulations. What if the site is contaminated? Who pays for the clean-up? We will help answer those questions.

Show you the Businesses

We will then begin discussing the businesses that match your requirements and begin showing you those gas stations that best meet your criteria. This is important because we don’t want to waste your time or that of our sellers by showing you business that are not a fit for you.

Viewing the Businesses

Now you are ready to start viewing the businesses we are offering. There are two ways you will do this. Either setting an appointment with the seller to meet face to face or on your own.

Meeting between seller, buyer and our broker. This is how we will handle most of our meetings. What you are trying to accomplish at this initial meeting is: Do you like the business? What you can do to improve the businesses? Information on the staff and the business.

Viewing the business on your own. We may ask you to view the business on your own. You may go with your spouse or a friend. You will go in as a customer, order something, and just observe the business. If you do this it is very important not to go in "snooping around" the business and asking questions. This could break the confidentiality guidelines. You are only to ask questions once your broker has set up an official meeting with the seller.

Once you find the businesses you are interested in we will begin speaking with the sellers regarding the finances and other company information. Once you narrow your search you will move to the Purchase Offer.

What to Expect

Before we get to the Purchase Offer, we will answer a few questions and speak about pricing.

What about Financing?
Some gas stations sell with some owners terms, meaning, the seller will finance part of the business. This will usually entail putting 30% to 50% down on the business. If not, our brokers have many lenders that can work with you to get you financed. Your broker will use their expertise to come up with creative finance terms that will satisfy both buyer and seller.

How does my attorney and accountant come into play?
We suggest that you have an accountant and an attorney. However, they are not in any position to tell you to buy this business or not. The accountant will be looking for the perfect business in the financials and the attorney will be looking for the perfect business in the paperwork. Remember, that the perfect business does not exist. If you need guidance in your decision we suggest a friend who has bought or owns a successful gas station who knows what they are talking about.

Will the business generate income to pay the debt and leave you enough to make a living?

This is a fundamental question every businessperson must answer honestly.

Price of the Business

So how do you determine the right price to ask for the business? We have a simple formula and we’ll you help with this.

The Purchase Offer

Now you are ready to make on offer on the business. Our broker has all of the contracts you need to help you with this. You will put in the terms, conditions (if any), and offering price. You will also need to be prepared to attach an earnest money check with the offer, which is a small fraction of the down payment. Your broker will then take the signed offer with the earnest money check to the seller. If the seller signs the offer, you have just bought a business. We will then prepare the closing date and we will guide you on finalizing the process.

The closing usually takes place within 6 to 8 weeks.

It is understandable that you would want to get the business for a good deal, but asking too low and playing the offer back and forth will only kill the process. Eventually the seller will be tired of it and ask us not to allow you to make any more offers. Ask for a price that is fair for both parties.

Please contact us with any questions about buying or selling a business.