Why owning a gas station is a nightmare

Why owning a gas station is a nightmare
High competition: Gas stations are highly competitive. The profit margins on selling gasoline are small. Gas stations make money mostly from the convenience stores and other services like car washes or auto repairs if they have the bays to service cars. There can be significant market saturation in some areas leading to excessive competition which affects profitability.
High operational costs: There are significant expenses to operating a gas station such as maintenance, repairs, utility bills, and paying staff. Maintenance costs involves the building, pumps, and landscaping. These could range from $20,000 to $40,000 annually.
The gas station will be accepting a lot of credit card transactions. These fees may end up being roughly equivalent to maintenance costs, $20,000 to $40,000 a year. There is a high likelihood that the gas station will have to eat any customer chargebacks on credit cards.
One of the worst things that could happen is an underground tank leak which could take several weeks to replace. During that time, the gas station can’t sell gas, meaning few people will come into the store to purchase drinks and snacks. An underground tank leak can contaminate ground water leading to lawsuits from neighboring residential communities. Insurance could decide not to cover a tank leak incident, arguing the leak had begun before the insurance was taken out. Furthermore, in the 1990s, there was a big push for gas stations to replace and update their underground storage tanks to a new standard. It is now 2023, so we are coming up to the end of the design service life on those tanks. I suspect we may see a lot more gas stations being put up for sales given this, especially if the businesses are losing money as it is.
Safety and security concerns: Gas stations can be the targets of theft, vandalism, and robbery. A lot of crime occurs at gas stations.
Thieves and criminals will usually test stolen credit cards to see if they are viable, on gas pumps.
The criminality is not limited to the customer either. Employee theft is a very real threat that needs to be constantly monitored for.Show more

Staffing: It is very difficult to maintain staff. Staff will have to be trained on the point-of-sale system. A lot of people that are willing to work at a gas station are not very computer savvy. It could take several weeks to get someone fully trained on a cash register. Staff may quit during or shortly after cash register training. Additionally, the job is very demanding, especially working at night. Staff can develop drug or alcohol problems from the stress and working hours. Even if you are able to reliably staff the gas station, as the owner, you may get called down to the station in the middle of the night because there someone tried to rob the clerk, or a violent crime occurred out at the pumps.
Gas: The jobber is the middleman between the gas station and the company that refines the petroleum products. Almost every cent brought in by the gas revenue is going to go back out to the jobber or middleman.
Getting a loan will be difficult
Buying a used gas station is highly risky for numerous reasons.
Due to the risk level of purchasing an existing gas station, a potential buyer may find it difficult to get financing or a loan from any bank. If you are in an urban or suburban area, it will be very difficult to find an available location to build on, so your only option will be to purchase an existing gas station. To take over an existing gas station will likely require you to have the cash to pay for it. If you can get the bank to give you a loan, the bank is going to ask for a “phase 1” or “phase 2” environmental investigation depending on the age and history of the gas station. The gas station needs to pass to get financing. The older the gas station is, the harder it will be for it to pass environmental studies that may be required before financing. No lender is going to give you a loan for a gas station without being as sure as possible there won’t be liability issues in the future in regard to contamination.
If someone is considering purchasing an existing gas station, they need to ask themselves why the current owner is selling the business. Perhaps the underground tanks are constantly needing to be replaced or there is another maintenance issue that continuously needs to be addressed. Perhaps the only sensible way to enter the gas station business is building a gas station, rather than taking over an existing business or location.
As we look towards the future, I believe EV sales will continue to accelerate. While I do not think EV adoption will happen as quickly as most analysts, I do believe it posses a threat to the gas station industry, especially ones that are marginally profitable.
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