During a conversation with some “gas station” clients this afternoon‚ one selling a New Jersey gas station and one purchasing a New York gas station‚ a few points (two in particular) came to mind regarding pre-purchase gas station due diligence. Here are the two points that you should consider in terms of due diligence:
Buying a Gas Station? We recomment reading:
- When evaluating fuel sales and profitability‚ consider and‚ incorporate into your analysis‚ the fact that as a fuel dealer when you purchase inventory you will be required to pay various taxes. According to my client‚ these taxes typically amount to approximately $0.59 per gallon and‚ in New York City‚ include federal tax‚ state tax‚ city tax‚ gross receipts tax and spill tax; and
- When considering profitability‚ you must evaluate the credit card fees typically incurred by the station. That is‚ what percentage of sales are paid by credit cards and what credit cards are being used. Keep in mind that credit card charges reduce your per gallon margins.