Do your due diligence and research all the numbers; calculate an accurate value of the business at hand.

Once you have found what you believe to be an accurate valuation of the business and filed a letter of intent with the seller, arrange for a formal commercial appraisal to be conducted.

When you get the results of the appraisal, set a date to meet with the seller to discuss the sales price. Your goal as the buyer is to ask for a price that is below the asking price and also preferably below the appraisal price.

Here is some advice in regards to negotiating a price when purchasing a new gas station or convenience store:

1. Try to lower the asking price.
2. Know the official appraisal value.
3. Compare that appraisal to your valuation estimate and the asking price. This will help you gauge the threshold of what you feel the business is worth paying for.
4. Find 3-5 negative things about the business that will cut into your initial investment. For example, if the roof needs repair or the bathrooms need to be remodeled.
5. Deduct that amount of those initial repairs you will have to make from the appraised value if it is lower than the asking price. Be able to provide reasoning for the lower offer.
6. Be willing to provide a gesture of goodwill, such as coming up a little from your initial offer. Allow the seller to make some money, too. If you have a reputation of being the only one who makes money in a deal, then you won’t be entering into many deals!
7. Negotiate as if you don’t need this deal. Don’t be too eager to sign the dotted line!
8. Have an idea of what you’re willing to accept. Decide on a range of prices that you might be willing to adapt to. Know your budget and your limits. Remember, a bank will most likely only agree to finance up to about 80% of the appraisal value of the business.
9. Stay away from high-pressure tactics, ultimatums, and finite demands. It’s good to know your boundaries and to counter their arguments against your asking price; it’s also not good practice to create animosity.
10. Get the deal in writing. At the end of the negotiations, make sure you walk away with a signed purchase agreement that specifically states that the deal will be finalized only when the buyer receives amicable financing.

Once you get through this stage, it’s up to the bank to consider if you qualify for the financing you need to advance your dream of owning a gas station. If you have crossed your T’s and dotted your I’s, then I’m sure you will be on the road to success.

The post Negotiating a Purchase Price appeared first on Gas Station Business 101 - How to Start, Run and Grow a Successful Gas Station Business.

Finding the appraised value (valuation) of a gas station business is much more complicated than figuring the value of a home. A home’s value is generally assessed based on factors like the age of the home, the structure and condition of the property, and by comparing the home to other homes in the neighborhood (“comps”). Unfortunately, when it comes to assessing the value of your business, there is not a neighborhood of gas stations to choose from.

When trying to find the value of a gas station that you’re considering purchasing or leasing, you will need to consider the real estate value and the value of the actual business. These two factors should be evaluated separately and thoroughly.

First, find a baseline value for your real estate. This can be obtained from the local tax appraiser’s office. The value that the local government assesses to a property for tax purposes is public record. Most listings are available online. Usually, this number will be much less than the asking price.

Second, discover and create a comp for your business. Like I said, there is not a neighborhood made of gas stations to find a comp for, so you have to investigate and find one.

Gather a list of the gas stations in your target area that have sold in the past 2 years. This list can be obtained from your business broker. From this list, find a few stores that look similar to yours in terms of sales figures, demographics, and so on. Create a comp for your chosen business.

These businesses are of course competitors, too, so knowing this information is key for many aspects of evaluating your business, now and in the future, if you decide to purchase or lease this particular gas station.

When finding the appraised value of your business, consider several factors:

• Merchandise sales
• Gas sales volume
• The gas pumps’ age and condition
• The payment technology that’s currently in place
• Location and visibility
• Condition and age of the facility
• The size of the building
• Regional economic growth trends and demographics
• Branded vs. unbranded fuel
• Amount of competitors and the distance between them
• Traffic volume of your nearest major road
• The potential or existing revenue streams of the business
• The ease of access into and out of the lot
• Expenses you may incur that you can predict
• Calculating the gross profit margin

Keep in mind two key points of advice:

• Just because a location has high merchandise sales, that statistic alone does not justify a higher valuation.
• If something is too good to be true, it probably is.

You’re going to have to be thorough. Like Sherlock Holmes, you’ll have to have an eye for detail when investigating a property’s value.

The post Being Sherlock: Investigating a Business’ Value appeared first on Gas Station Business 101 - How to Start, Run and Grow a Successful Gas Station Business.

When dealing with a business like a gas station or a convenience store, one of the many decisions you’ll have to face is if you should buy or lease your chosen location. That’s even after you’ve decided on a possible location in the first place.

Let’s weigh the options of buying a store versus leasing a store.

Buying – the pros:

• It creates an asset that can raise your net worth.
• You have control over the building (upgrades, remodeling).
• It creates tax advantages, such as the ability to write off your interest payments on your loan.
• Monthly payments may be lower than what a lease payment would be.
• You gain instant equity, as the down payment is applied directly to the loan amount.

Buying – the cons:

• To obtain a loan requires good credit.
• May require a larger down payment and closing cost fees compared to a lease deposit.
• The real estate value may decline.
• Less flexibility to move, change, or expand because you’re locked into a mortgage.

Leasing – the pros:

• Cheaper to start overall; initial cash required may be less than buying.
• Easier to enter into and easier to get out of, if you decide that this business is not for you.
• Can deduct the lease payments as a business expense.

Leasing – the cons:

• May have to pay a “goodwill” amount. May also have to purchase the inventory that’s present in the store upfront.
• No control over the property. You may not be allowed to make renovations.
• No investment potential. You can’t enact upon the property’s value; you may not be allowed to sublease.
• The monthly payment is higher.

As with any major life decision, you should weigh your choices carefully. The decision of whether to purchase or lease your chosen business property is no different.

Hopefully, after scrutinizing your options, you can come to a conclusion that works best for you.

The post It’s all about the Pros and Cons appeared first on Gas Station Business 101 - How to Start, Run and Grow a Successful Gas Station Business.

From my many years of running gas stations, convenience stores, and fast-casual restaurants, I have found that thriving businesses are run by someone who possesses these 5 traits:

• Dedication
• Detailed
• Dialing in the Digits
• Duplication
• Delightful (a “people person,” but that didn’t start with a “D”)

Business owners are leaders. They don’t just run the show, but they have to lead a team. They need to exhibit a drive and passion for the work they are trying to accomplish.

Dedication is a vital trait that entrepreneurs should possess. It means having a clear vision, enacting a powerful mission statement (personally and professionally), and sticking to following through with their plans. This dedication includes being resilient in response to change, bouncing back after adversity.

Being detail-oriented is a big plus. The gas station business model has many moving parts that must all be oiled well for the engine to go. Having the ability to pay attention to all of those areas with a discerning eye is advantageous.

“Dialing in the Digits” is just an alliterative way to say that a business owner must be in love with numbers. There are several statistics that a store owner must digest every day. There are sales reports, P&L statements, and inventory lists. Numbers are an integral part of the everyday life of a gas station business owner. They are easier to digest if you love working with them.

When I say “duplication,” I mean that you should be comfortable with repetition of duties. Successful business leaders do the same things in a scheduled routine every day. I don’t mean that you should eat ham sandwiches at 12:15 every weekday, but more of the processes involved with your business should be written into an easy to follow routine. Make it a daily habit to review reports, double-check payroll hours, and keep an eye on ordering and inventory. Decide what tasks are to be completed daily, twice weekly, weekly, and monthly. Set them on a schedule so that no stone goes unturned.

Finally, being delightful. Actually, I am referring to being a “people person.” Not only must you interact with business partners, lenders, and industry leaders, but you will want to have dealings with local government officials, fellow chamber of commerce members, customers, and employees. If you consider yourself an extreme introvert, the lines of your comfort zone will be crossed as you will be pushed to network and converse with people every day.

If you feel like you’re OK with this list, then you are well on your way to becoming a successful business owner in whatever venture you choose.

As always, feel free to contact me if you have any questions or would like to see me address a specific topic. I am currently writing another book and also authoring weekly blog posts. You can also find me on my Facebook group “GSB Community.”

Thank you for taking an interest in my blogging efforts!

Best Regards,

Shabbir

The post 5 Traits of Successful Business Owners appeared first on Gas Station Business 101 - How to Start, Run and Grow a Successful Gas Station Business.

I am hoping to get back into writing regular blog posts. I am also authoring another informative book about this lucrative enterprise.

I need your help! I am looking for new topics for blog articles as well as for my new book.

I would love to address your specific questions, issues, and concerns about your new gas station business. You can join my newly revived Facebook group where you can interact with and gain insights from others in this vast, amazing industry.

The Facebook group is called “GSB Community,” and the link to join is https://www.facebook.com/groups/GSB101/. You must apply for entry, but you should be approved within a few days once you ask to join.

You can also leave a comment reply on this blog post with any issues, concerns, comments, and questions that you would like to be answered about owning a gas station or convenience store.

I am more than happy to share my knowledge from my many years of experience.

I look forward to reading your replies. I appreciate your interest in this website. Thank you!

The post Forgive My Absence: Returning to Regular Blog Posts appeared first on Gas Station Business 101 - How to Start, Run and Grow a Successful Gas Station Business.

Welcome to Gas station business 101 podcast, I am Shabbir Hossain, and this is episode 61. This is the show where we discuss everything under the sun about the gas station and convenience store business, how to buy these businesses, how to operate them and how to grow them to be a million dollar success.

Now on to the show…..

On Episode 23, I brought you a real life store sales data and analysis, where I was helping a group of buyers decide if they should buy a location or not. If you recall, in that episode I published the real sales figures of the store and some projected ones as well. Based on their sales data I created some P&L’s of my own and it showed for the month of October the seller had lost about $2500. But despite the fact that the store was losing money, I did go ahead and recommended that they buy the store based on few factors which I discussed in that episode 23 as well. If you recall, in that episode (episode 23) I discussed few issues, and few opportunities of the store and we covered 9 points:

1. The store and its location
2. Demographics
3. Age and brand
4. Physical inspection of the store and the issues we noticed
5. Recommended upgrades and how much those upgrades would cost
6. Indoor Issues
7. Outdoor Issues
8. Sales and financials
9. Projected P&L vs. Real P&L

If you have time, please go back and listen to Episode 23 and 29 this way you will know the whole story.

In episode 29 I shared some P&L for March 2016, in that episode, I did compare P&L’s from October 2015 which the sellers provided us to what the new owners did in March 2016, and if you recall there was a drastic difference between those two. The new owners increased the business and made it a very profitable one. But to get to that increase, the new owners implemented these nine strategies that I proposed.

Strategies we implemented:

1. Address all maintenance issues
2. Upgrade all lighting and put a fresh coat of paint
3. Clean up the store
4. Remerchandising the store based on its traffic flow
5. Bringing in products that sell in the area
6. Advertise heavily via reader board, pump toppers and on the front door
7. Bringing in EBT and money order
8. Implementation of new fuel and merchandise pricing strategy
9. Full on marketing and promotional campaign

As you can see it was not one single strategy that made the business profitable but a combination of many factors. It was not an easy task, but the credit goes to the management team of the store who were able to follow directions and implement everything we suggested for the store.

Now let’s take a look what and how the store has done since March 2016 until December 2016, instead of showing you month by month P&L, I can tell you that the new owners have seen a gradual increase in business and enjoyed a positive growth each month. Let’s now take a look at the P&L from this last December.

But remind you in most areas, November through February are usually the slowest winter months. Business usually slows down quite a bit compare to the summer months. So I figured if we can see something positive even in December then we can be assured that the business will make more sales and show more profit during the summer months.

Here are the Sales summery and P&L for the month of December 2016

Let’s look at the Profit and Loss history of this store. If you remember in October 2015 right before the new owners took over the store lost $2574.51, then the new owners took over in December, and by March the store became profitable which I shared in episode 29, the P&L then showed a profit of $5193.33.

Now fast forward to December 2016, which is a slower month for most gas station business, and with less fuel sales, the store generated $6,875.46. It is important to share that in this past one year, their best month was August 2016, and for that month the net profit was $9,612.90., But I wanted to give you a full year’s snapshot so I brought December and not August in this calculation.

What have they done differently? Well, nothing other than keeping up with the proper inventory, making sure the pricing is right and superior customer service. That’s the secret sauce of success in this line of business.

If you have any question, feel free to send me an email at shabbir@gasstationbusiness101.com, or you can post it on my Facebook group page by going to shabbirhossain.net

Don’t forget to sign up for my very important newsletter; you can simply sign up for it by going to http://gasstationbusiness101.com/subscribe

In the meantime, if you haven’t subscribed to this podcast, feel free to do so, and if you like this show, I would love to see a review from you on iTunes or where ever you download this episode from.

Here is a link to my podcast page on iTunes, if you follow this link you can give me a review right on that page. Trust me it will make my day and won’t cost you anything other than maybe 30 seconds of your time.

https://itunes.apple.com/us/podcast/gas-station-business-101-podcast/

Thank you once again for joining me in this episode; I will see you in the next one.

Cheers!

The post GSB-61: Progress Report # 3 for December 2016: Actual Business Evaluation & Sales Analysis of a Real Store appeared first on Gas Station Business 101 - How to Start, Run and Grow a Successful Gas Station Business.

Welcome to Gas station business 101 podcast, I am Shabbir Hossain, and this is episode 60. This is the show where we discuss everything under the sun about gas station and convenience store business, how to buy these businesses, how to operate them and how to grow them to be a million dollar success.

Question #4

Hope this email finds you and your family well.

I personally want to thank you for writing a book about Gas Station Business. You have explained very well process of how to buy and what to keep in mind before purchasing store.

I am in Gas Station with C-Store business since The year 2005. I have been thru many challenges similar to yours which you have explained in your book. I am currently looking for something to understand how to get finance to expand like big national corporations? Can you explore few points of financial strategies in order to expand in gas station business?

Your help will be highly appreciated.

Question #5

Dear Shabbir,

I will be running a gas station from April 1st. Let me give you the picture; the store owner still has 3.4 million volume of gas volume under contract. He splits his profit, expenses, credit card fees, and maintenance fees with a small oil company.

If I take his contract, I have to split the fuel profit 50/50, but I get 3 cents cheaper than other gas store. If I don’t take his contract, I have to pay 3 cents more than his contract price. Which deal will generate more profit for me? Being a 1st-time business runner, I would appreciate your suggestions.

Question #6

Hi Shabbir

Thanks for the great article, it helps a lot. One question, though: when a seller say his store sales are 37k, does that figure normally including lotto and scratch off sales?

I am asking because one of the stores I looked at treated lotto, scratch off tickets and prepaid phone cards separate, so inside sales were more than what they were saying.

Thanks and keep it up

Question #7

Thanks for the great info. I had limited fund like around 100k, and most money making gas stations as I saw on websites are expensive. Do you think it is a good idea to go in partnership with a stranger? I have posted on cl for partnership and got responses, but I am curious about it.

Answer: Check out episode #21 where I spoke in details about how to create effective partnerships.

Question #8

Andres sent me this question, he is a long time listener and contributor of this show, he asked

Hi Shabbir I hope you are fine. Do you have a good template to control cigarettes in your stores? I would imagine your employee has to count the cigarette boxes when he starts the shift and also at shift end to reconcile the daily sales, right? If not, how do you do it?

Tune in and listen to this episode for all the answers.

If you have any question, feel free to send me an email at shabbir@gasstationbusiness101.com, or you can post it on my Facebook group page by going to shabbirhossain.net

Don’t forget to sign up for my very important newsletter; you can simply sign up for it by going to http://gasstationbusiness101.com/subscribe

In the meantime, if you haven’t subscribed to this podcast, feel free to do so, and if you like this show, I would love to see a review from you on iTunes or where ever you download this episode from.

Here is a link to my podcast page on iTunes, if you follow this link you can give me a review right on that page. Trust me it will make my day and won’t cost you anything other than maybe 30 seconds of your time.

https://itunes.apple.com/us/podcast/gas-station-business-101-podcast/

Thank you once again for joining me in this episode; I will see you in the next one.

Cheers!

The post GSB-60: 5th Q&A Episode | Part -2 appeared first on Gas Station Business 101 - How to Start, Run and Grow a Successful Gas Station Business.

Welcome to Gas station business 101 podcast, I am Shabbir Hossain, and this is episode 59. This is the show where we discuss how to start, run and grow a gas station business successfully and give you an inside look at many real life case studies so you can follow and be successful in this business.

First my apology once again for not coming up with an episode sooner, I was busy with a few projects and had to put the blog and the podcast on the backburner for just a bit, but I am back, and hopefully I will be posting new episodes sooner rather than later. I still haven’t forgotten about the episode I promised you where I would share the new P&L of the subject store I helped some investors buy about 14 months ago. I have some new updates on that store and recorded that episode halfway through already, which I will share soon I promise.

Now as for this episode, I had to do this one first because I have had way too many emails lately where many of the blog readers and podcast listeners have been asking me various due diligence questions, and it is hard to answer them via email. So I have decided to pick just 6 out of them since they are mostly all similar in nature, and I thought by sharing them with rest of you, it will benefit everyone. For various privacy reasons, I have decided not to mention any names of the people that sent me these emails here.

Let’s dive right on…

Question #1

I need your advice about the valuation for the store based on the following information.

Inside Sale# $55000/month (27% profit margin)

$55,000 x 27% = $14,850

Outside Sale# 25000 Gallon/month (10 cents per gallon)

25,000 gallon x 10cents =$2,500

Lottery commission# 4000/month, ATM# $200/month

Total Gross Profit $21,550

Owner absentee

Capability to open deli with grill.

Store located in small town and mostly neighborhood business.

Expense:

Rent# 5000 “NNN.”

Utility# 1300

Credit# 1000

Payroll# 2400 (Two full-time employees)

Other# 500

______________________

Total Expenses: $10,200

Net profit: $21,550 – $10,200 = $11,350

Asking price is $225,000

What would be the price we should go for?

Question#2

Shabbir, here are few questions.

Please note that I do not have prior experience, so how can I convince them that I am serious and are there any training provided by gas companies?

1. When buying just the business, I mean just goodwill without R/E, how do I make sure that my investment is protected? For Example, If I buy the lease for 500k and pay 16K a month. What if the lease is for two years and after two years the owner does not want to renew the lease. How can I make sure 100% that I will not lose everything?
2. As far as tax benefits are concerned at the end of the year, which option is better buying or leasing? I would appreciate if you only focus on the tax benefits since you have already talked about pros and cons from other angles. For example, let’s say that gas station A is leased with goodwill paid by on-hand cash and gas station B is bought with R/E with a bank loan. Let’s say both gas stations have exactly same per month profit after all lease or loan payments.

Now at the end of the year when I will file income tax, which option will give me bigger return? What is the best way to approach companies which own multiple stations around me?

Question#3

Good Morning Shabbir,

Glad, I ran into your website. I found a gas station business for sale for

$85K. We did our due diligence to look into the traffic, etc.  Mostly the sales are from Cigarettes and Beer.  The other items are pretty much a stand still.

In addition, this station the gas is unbranded. They are selling like 700

Gallons per day, inside the store with the majority of sales been Cigar and

Beer. The sales is about 40K revenue and 35% profit, and expense is about

9.5K. Profit is about $2,750 is what I am estimating.

Is the goodwill they are asking outrages? Currently, the owner is not opening the store properly and wants to sell it

If you have any question, feel free to send me an email at shabbir@gasstationbusiness101.com, or you can post it on my Facebook group page by going to shabbirhossain.net

Don’t forget to sign up for my very important newsletter; you can simply sign up for it by going to http://gasstationbusiness101.com/subscribe

In the meantime, if you haven’t subscribed to this podcast, feel free to do so, and if you like this show, I would love to see a review from you on iTunes or where ever you download this episode from.

Here is a link to my podcast page on iTunes, if you follow this link you can give me a review right on that page. Trust me it will make my day and won’t cost you anything other than maybe 30 seconds of your time.

https://itunes.apple.com/us/podcast/gas-station-business-101-podcast/

Thank you once again for joining me in this episode; I will see you in the next one.

Cheers!

The post GSB-59: 4th Q&A Episode | Part-1 appeared first on Gas Station Business 101 - How to Start, Run and Grow a Successful Gas Station Business.

Welcome to Gas station business 101 podcast, I am Shabbir Hossain, and this is episode 58. This is the show where we discuss how to start, run and grow a gas station business successfully and give you an inside look at many real life case studies so you can follow and be successful in this business.

First my apology for coming up with an episode sooner, I was little under the weather at first then got busy with a few projects and had to put the blog and the podcast on the backburner for just a bit. Well, we all have to make money to survive right? I was doing just that too. But I am back, and hopefully, I won’t take much breaks anymore. Even though I told you in the last episode that this next one will be about the update and P&L of the story I helped some investors buy back in December 2015, but I am still analyzing and sorting out those P&L numbers, so hopefully it will be in the next episode.

As I said I have been busy so I didn’t even get to answer some of yours email yet, and if I haven’t, my apology. But I picked out 6 questions out of 30 or so email I looked at in last two days and decided to answer them on this episode this way everyone gets to benefit from the answers.

In this 3^rd Q&A episode, I answer 6 questions

1. I am looking to buy a closed up gas station with the property, what do I need to worry about in this process?

1. In one of the podcasts, you had mentioned that one of the reasons someone could sell their gas station is because some competitor is crushing them on fuel prices. How can we figure out if this reason why a seller is selling his gas station.
3. I am buying a gas station, but the seller wants to sell the tanks, canopy, and pumps for $1.00. What I want to know is if I leave the business at the end of the lease term due to not finding any buyer then what should I do if it is in my name? What if the landlord doesn’t want to buy it for a $1 like I did
5. I have been meaning to tell you how much I enjoyed the gas station/c-store development podcast you did. Thank you! One point I was not clear on was about reselling or leasing the property. Let’s say I stabilized the business in 3 years and it does:

• 120,000 Gallons/Month on fuel sales
• 22,000 gallons of Diesel sales
• $75,000 on inside merchandise sales
• $90,000 in Fast food sales

My question is what should my resale value be after 3 years of operation?

How much can I sell and/or lease the business for which will not include the R/E

How much can I sell the business with R/E

5. First of all, thanks for your podcast and for all the resources you share with us. It’s great to learn from someone with all your experience. Keep it up! The public restroom at my gas station is located outside, meaning people have to ask for the key at the counter to use it. Normally we give the key to customers (people who actually buy) and people we know (customers from the past who might not be buying anything on that day) but sometimes people get very mad when we don’t give the keys out if they are not buying anything (people who only stop at the station to use the restroom). That being said, the cashier is many times “forced” to give out the keys to non-customers in order to avoid headaches. The problem is that people don’t care about the restroom. They pee on the floor, misuse the toilet paper, soap and paper towels and write graffiti on the walls. Some others use it to consume drugs and have other illegal activities. The main problem is that once every week the toilet gets clogged, sometimes so badly that I’ve had to actually replace the toilet 3-4 times a year as it is impossible to unclog it. I’ve been trying to find the best solution for this. It is mandatory to have public restroom according to Florida laws so I can’t close it. I am also forced to offer toilet paper, soap, and paper towels even if people misuse them and it represents a high cost to my business. Some people have suggested installing a coin lock, so I charge something small to use the restroom, but I’m afraid this would make me lose real customers. While I know the coin lock does not fully solve the problem, at least it would generate me some cash to keep the restroom neat. Have you had this problem in your stations? What is the best way to tackle this, so the restroom does not become a drain of my profit? Thanks for any hints you might share to help me out. (Andres sorry for the delayed response to your question)

6. I have noticed in 3 of my dispensers the regular unleaded runs very slow but other two grades are fine, it has been happening on and off, what should I do?

If you have any question, feel free to send me an email at shabbir@gasstationbusiness101.com, or you can post it on my Facebook group page by going to shabbirhossain.net

Don’t forget to sign up for my very important newsletter; you can simply sign up for it by going to http://gasstationbusiness101.com/subscribe

In the meantime, if you haven’t subscribed to this podcast, feel free to do so, and if you like this show, I would love to see a review from you on iTunes or where ever you download this episode from.

Here is a link to my podcast page on iTunes, if you follow this link you can give me a review right on that page. Trust me it will make my day and won’t cost you anything other than maybe 30 seconds of your time.

https://itunes.apple.com/us/podcast/gas-station-business-101-podcast/

Thank you once again for joining me in this episode; I will see you in the next one.

Cheers!

The post GSB-58: 3rd Q&A Episode | Answers About Ground Lease, Business Resale Value, Buying A Closed Up Station And Much More appeared first on Gas Station Business 101 - How to Start, Run and Grow a Successful Gas Station Business.

Welcome to Gas station business 101 podcast, I am Shabbir Hossain, and this is episode 57. This is the show where we discuss how to start, run and grow a gas station business successfully and give you an inside look at many real life case studies so you can follow and be successful in this business.

Before we start, one important announcement, my new email server is working beautifully now, so if you are on my email newsletter list, I am sure you already noticed you are receiving my seven very important how to find and buy a gas station email series. If any of you are not receiving these emails, please sign up again, and that should solve the issue, you can simply go to http://gasstationbusiness101.com/subscribe or go to my blog at http://gasstationbusiness101.com and sign on the landing page. You will also receive my free eBook 9 Passive income idea book for signing up.

Okay now on to the show…

First take a look at the attached daily fuel price notification that we all receive from our jobber/suppliers. This is the price we pay to buy our fuel. Remember it will vary city to city, state to state and country to country. What I pay for a gallon of regular in Alabama may not be the same as someone buying the same brand fuel in NY City. But a couple of things to consider here, if you look at this fuel prices you will notice there is a difference in price between the regular, Mid-grade and premium right?

Well, typically, your mid-grade price should be around 15 cents higher than your regular price, the same way your premium price should be around 50 cents higher than your regular price. So, you need to price your fuel accordingly.

Let me show you how.

Price       Regular         Mid-Grade             Premium

Cost        $1.89              $2.04                   $2.39

Retail       $1.99              $2.39                 $2.89

_______________________________

Profit:   $.10                   $.35                     $.50

(Listen to the show for details on how we price our fuel)

Now let’s look at the Excel image of the fuel margin calculation, it will be easier for you to understand this episode if you can see the excel sheet. You can also download this and use it for your business as well.

(Listen to show for full discussion on this)

To download the Fuel Profit Calculator please click below (In Microsoft Excel Format)

http://gasstationbusiness101.com/wp-content/uploads/2017/01/Fuel-Profit-Calculator-Upload.xlsx

If you have any question, feel free to send me an email at shabbir@gasstationbusiness101.com, or you can post it on my Facebook group page by going to shabbirhossain.net

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Thank you once again for joining me in this episode; I will see you in the next one.

Cheers!

The post GSB-57: How to Calculate Fuel Profit Accurately appeared first on Gas Station Business 101 - How to Start, Run and Grow a Successful Gas Station Business.