How to Start a Gas Station?

There are several ways to own a gas station. While some options are more feasible in specific circumstances, most depend on your choices and state of affairs. While owning a gas station may incur high initial cost outlays, it is an incredibly lucrative business in the long run.

How to Start a Gas Station?

Typically, there are three significant ways to own a gas station. If you want to choose a faster route, you may either purchase a business put up for sale or buy an existing gas station. The third option, a relatively long one, involves building your gas station from scratch.

Every option has its own merits and demerits. Regardless of which way you pick, you will need to invest some capital. If you wish to own a gas station, you will need to learn the equipment and machinery used in the gasoline industry.

How much do gas station owners make?
Successful gas station owners can make anywhere from $50,000 to $100,000 annually. Usually, gas stations that do more (selling various products) than gas tend to make more money. However, salary depends on the number of gas stations, size, traffic frequency, location, etc.

How much does a gas station cost?

How much does it cost to open a gas station in 2021 in the US?

The minimum investment is:
$2,500 for legal fees
$2,800 for insurance premiums
$3,200 for US state permits
$5,500 for promotional signage
$9,000 for initial inventory for a gas station
$25,000 for setting up a convenience store in a gas station
$110,00 for setting up the gas station
$150,000 for purchasing a gas station building

When we ask how much it costs to own a gas station, it is tough to give a round number, but the average range in the US is from $150,000 to $200,000.

Glance through the details of each of the three main ways to own a gas station:

Purchase a Gas Station Franchise

This is one of the easiest and fastest routes to be a gas station owner. You must pay a certain fee to an existing corporation to do this. This will enable you to begin a business in their name and enterprise model.

A franchise offers numerous advantages; one key benefit is working under a well-renowned brand identity. Such established entities follow powerful business models with a validated success history. Besides, the parent corporation owners are concerned about your business’s performance; thus, the business’s senior authority business guides you. This applies even more if you have agreed to give them a share of your net profits.

Yet, these benefits are also accompanied by some drawbacks. Per your franchise agreement, your expenses may be high, especially if you give a portion of the profits to the holding company. In terms of expanding the business and its services, the regulatory requirements may be too constrictive. So, it may become challenging to earn substantial profits from the company.

A gas station franchise costs around $ 250,000, with an initial investment fee of at least $225.000 and ongoing franchise fees of $25,000.

Further, the parent company gets to select your station’s location and decidestation’sestation’ses that can be numbestation’sesparticular distance. Their preferences may not always seem beneficial to you. Moreover, if any other company franchise gets into trouble, it can fetch considerable media attention. This will, in turn, hamper your business sales as you also share the same brand name.

Purchase an Existing Gas Station

An alternate way to become a gas station owner is to buy an ongoing business. For this, you need to place a bid or make an offer on an existing gas station business. The money is then given to the present owner, after which you become its new owner. Purchasing an existing business offers multiple benefits since it has already proven successful. But before you make this investment, conduct a thorough research about its profits, costs, taxes, and related information.

Owning an existing gas station has a few pitfalls. First, you have to gain the trust of customers who dislike a change in ownership. Second, you may face complications if the previous owner lacks proper records of transactions with creditors, suppliers, and other stakeholders. To avoid these issues, it is advised that you critically analyze the reasons behind the enterprise’s sale before purcenterprise’sterprise’se you for the Thisenterprise’senginancial accounts.

Build from Scratch

One of the most challenging yet flexible options is starting your gas station from scratch. This option entails sufficient time, effort, and money in the early phases. However, the significant advantage is that it allows for maximum independence and control. You are the sole decision-maker of your business and its operations. You won’t have to answer anyone about what you want or the business company is to follow.

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To start your own business, you must first procure licenses for business ownership and gasoline sales. Then, you will have to search for suppliers of related goods and services.

The only demerit of building from scratch is that you have a lot of work to do. New businesses demand extensive advertising and promotions before they start making profits. In other words, you have to take care of the marketing part besides the operating side of your business. Due to the presence of established and well-known companies, you will likely face a highly competitive market in the beginning.

Initial Investment and Capital

You will require some initial investment and capital regardless of your chosen option. Generally, you must get a business loan to make the starting purchase. There are also some licensing formalities and legalities that need to be fulfilled. Soon after the purchase, you will likely invest in the workforce, accountants, and other employees to handle different aspects of your business. Besides, you will forge agreements with the relevant suppliers of gasoline goods. Then, marketing obligations and requirements exist to establish your presence in the industry.

Gas stations sell fried fast foods, coffee, and similar goods besides the core services. Some gas station brands offer beverages under their company name.

Daniel Smith

Daniel Smith

Daniel Smith is an experienced economist and financial analyst from Utah. He has been in finance for nearly two decades, having worked as a senior analyst for Wells Fargo Bank for 19 years. After leaving Wells Fargo Bank in 2014, Daniel began a career as a finance consultant, advising companies and individuals on economic policy, labor relations, and financial management. At, Daniel writes about personal finance topics, value estimation, budgeting strategies, retirement planning, and portfolio diversification. Read more on Daniel Smith's biography page. Contact Daniel:

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