How Profitable is a Gas Station?
You want to be a business owner and have narrowed your options to a gas station for sale in Toronto. However, you are no doubt wondering, “just how profitable is a gas station?”
It’s a critical question, and a detailed answer will help you make the best decision and pay the right price. In this article, we will show how profitable a gas station in Toronto can be for your investment portfolio.
How Much Do Gas Station Owners Make
Owners of successful gas stations can make anywhere between $40,000 and $100,000. However, more cars are put on the road every year, so the gas station industry will continue to grow. Regarding profit on fuel sales, most gas stations will manage an average of 3c a litre profit after expenses.
The gas station industry in Canada is worth $30 billion annually, and there are 6,613 gas stations serving the market. That is to say, buying a gas station in Toronto means you stand a good chance of profiting.
What You Need Before Buying a Gas Station in Toronto
Creating long-term success in the gas station business requires planning. Here’s what you need before buying a gas station in Toronto.
Business Plan – Good business plans are critical to success. If you are using finance, your lender won’t give you a loan without one. A detailed business plan will include:
- Information on your competitors
- Your unique selling proposition
- Your growth strategy
Market Analysis – It’s always a good idea to know the state of the market before you buy a gas station. Will you advertise, switch products, or expand the business? You can find out most of this information by researching other gas stations in the area. Figure out what they are doing and plan on doing something different.
List of Products and Services – You will sell more than fuel after buying a gas station in Toronto. More than 61,000 gas stations have a convenience store, which is where you will make most of your profit. You could also have a car wash, auto service center, air station, and sell alcohol. Convenience store and gas station combinations make 80% more sales than gas stations alone.
What Does a Cost to site?
Whenever you buy any business, including a gas station for sale in Toronto, the cost will include key money or goodwill. Depending on the business, this figure could be $100,000 and up. Plus, you will also need to compensate the current owner for the stock on hand.
Most small convenience stores will have at least $10,000 worth of stock. What’s more, you will be paying for the land as well. Of course, the cost of land will depend a lot on the area where you are purchasing. The more profit potential a gas station has will also affect the price. For instance, expect to pay more for a modern gas station situated beside a busy main road.
Are you looking to invest in a gas station for sale in Toronto? If so, GasStationForSale.Ca has all the information you need on the latest gas stations to hit the market. Find your future business there today.