# Any one OWN a petrol station?



## Estoril-5 (Mar 8, 2007)

Right guys,

As the title suggests. Does anyone own a petrol station as a business?

Im trying to find out as I was approached to invest in one.

Having a bit of a shuffty on t'interweb i can see that people say theres not much money in fuel but its the extras that they buy, ****, crisps, drinks etc.

really need to hear from someone whose been there done that etc.

how much money can be made?

On the upside, i have been guaranteed an 7% return per year!

But with every business theres always risk.


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## Dixondmn (Oct 12, 2007)

I don't own one, but I've always wondered how much more revenue could be made if it ONLY sold petrol. i.e. less people doing a weeks worth of shopping in there leaving a car blocking up a space next to the pump, and more cars rolling through the forecourt.

Surely when people buy what ever the hell they buy in petrol stations other than petrol there has to be an associated cost of the pump not being used.


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## Guest (Sep 5, 2011)

as above , dont own one but know a few people who have, looked at it a few years back and was advised to stay clear of them, if you look at how many are closing down it should give you an idea of how hard it is to survive, not a lot of profit in the petrol so you have to depend on the shop, problem is, if tesco or asda are close to you then you have no chance, they will discount the fuel to attract custom to the add on shop, not the game it was 10-15 years ago when you had very few 24 hour shops


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## Spoony (May 28, 2007)

Having managed one before I'd stay clear. It's correct that the money made is from the add ons like shopping but I don't think it's the game it used to be. 

If your near any supermarkets you can pretty much forget making any money.

Is that a guaranteed 7% return on investment? So you invest 10k now and you get £700 back a year? Surely that isn't worth it? You'd be as well investing in solid shares or bonds at that rate.
Or is it 7% of profits? Which again could be fairly minimal after overheads and so forth unless it was at gross.


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## AboveFunction (Aug 8, 2011)

If I'm right you make 6% per litre (the station it self) so thats about 8 pence per litre (at current rates of petrol) 

That's actually quite a lot when you have 6 pumps and a good flow of cars coming through (some putting in a tenner every other day and some filling up once or twice a week). 

then inside is another business all together, plus you have things like the vacuum and airfreshner, power washers etc... (they all soon mount up to a healthy profit)


I don't own and never have had a petrol station - this is from research I did a little while back when a friend was looking into buying into a franchise 

but on the flip side - it depends what you put in and what it actually makes because are you guaranteed 7% of the business (i.e. that is what you own) or are you guaranteed at least 7% of your investment?


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## Estoril-5 (Mar 8, 2007)

guaranteed atleast 7% of my investment per year.

Seeing as the banks are giving a paltry 2-3%. 7% seems quite favourable.

i also have an opp to actually own a share of the business, this comes with different terms and conditions though.


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## CraigQQ (Jan 20, 2011)

do it, then give me "mates rates" on petrol :lol:


i would steer clear, the above comments on the add on's that make money is right, except i don't think theres much to be made on ciggarettes either, but the rest there is.

tell them instead of 7% you want free petrol for your investment :lol:


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## Bero (Mar 9, 2008)

Estoril - Look at the prices YOU will be paying for petrol and what the local stations are selling it for. My bet it it would be impossible to match supermarkets prices due to the volume they purchase, how they own/lease the distribution tankers added to the fact that it's not part of their core business and does not need to make a profit....just lure customers to their superstore.

7% is not much if you need to work there full time - £100k investment returns £7k a year....but you would 'lose' the salary you would take from your current job.

It's not impossible to make it work, make money and hopefully someone here will be able to give you accurate numbers. Look



dixon75 said:


> I don't own one, but I've always wondered how much more revenue could be made if it ONLY sold petrol.


The exact opposite is true - money is made on in store purchases - why do you think Shell, BP et al' were so against the 'pay at the pump' services.

Edit - found this http://www.ukbusinessforums.co.uk/forums/showthread.php?t=50852


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## Clark @ PB (Mar 1, 2006)

Buy a coffee shop instead, apparantly you can make a mint from those. A client of ours has 3 and runs about in a DB9 so there must be some truth in it :lol:


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## CraigQQ (Jan 20, 2011)

:lol: im off to buy 3 coffee shops!!

no wonder they make so much.. 10p's worth of coffee, £1 worth of bills (staff, leccy, water ect) and charge £4 a cup :lol:


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## EcosseGP (Jul 5, 2011)

Uncle had a petrol station up until he retired but like you rightly said the money isn't made on fuel only on the extra's .. He'll tell you ti stay well clear as I was going to take it on when he gave it up .. It was flattened for houses 3 weeks after it was sold .. 
Roll shop cafe always a winner IMO


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## David (Apr 6, 2006)

Clark @ PB said:


> Buy a coffee shop instead, apparantly you can make a mint from those. A client of ours has 3 and runs about in a DB9 so there must be some truth in it :lol:


its like any business - how you market it, prices, costs to buy, positioning of the shops etc

i have a customer who owns 4 "greasy spoon" shops, Clark you may know one of them as he has one on PRW going towards ibrox and is open on match days 

hes got a nice house, XC90 but no DB9 :lol:


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## Obsessed Merc (Apr 10, 2011)

CraigQQ said:


> :lol: im off to buy 3 coffee shops!!
> 
> no wonder they make so much.. 10p's worth of coffee, £1 worth of bills (staff, leccy, water ect) and charge £4 a cup :lol:


£4/cup ? Surely you don't order expresso's by the pint ? 
But then again I know you work some savage hours, praps you do...


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## Nanoman (Jan 17, 2009)

Lots of 'interesting' advice here.

Anyone offering a guaranteed return of 7% in todays climate is a bit nuts. There must be some risk. I suspect that this may be a share of profit number which is different to a ROI number.

Are you buying a station (or share of) then allowing someone else to run it or are you taking on a franchise of a station someone else owns?

There is zero money to be made selling fuel. Where you will make your money depends on the location & facilities. Are you in town or next to a trunk road somewhere? Will you have a decent shop or cafe? Are you aiming for truckers, locals, tourist coaches?

If you're buying it to give to someone else to run then sit back and watch the money roll in. Just make sure your commercial agreement is favourable. If you are going to be running a station then you've got your work cut out.

The first thing is to always have a decent queue - if your only customers are there to buy fuel you need to make them want to spend money where you make money and not just on fuel. Layout is everything. Have the tempting, high margin, impulse buys where the queue is. 

If you have a cafe/shop and you're near a trunk road you need to get coach drivers on your side to bring in the punters. Make it worth their while preferably with something that costs you little such as a free meal. If it's in the middle of nowhere, near a trunk road with something remotely touristy you might be onto something but you need to get the brown signs which is difficult. 

I don't own a petrol station but a good friend does and another friend is an area manager for one of the big players. It's surprisingly complex but there is money to be made depending on location etc.

Ideally you want to buy a big empty, badly draining field from a farmer for peanuts in the middle of nowhere just before a new motorway or trunk road is announced that just happens to have an intersection next to your field. A friend on the planning commitee will also help. Then set up something remotely touristy and get some brown signs. Then get a big player to lease it off you for 25 years. At this point you can go buy a big house, big yacht, fast car and new **** for your wife. ;-)


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## Clark @ PB (Mar 1, 2006)

David said:


> its like any business - how you market it, prices, costs to buy, positioning of the shops etc
> 
> i have a customer who owns 4 "greasy spoon" shops, Clark you may know one of them as he has one on PRW going towards ibrox and is open on match days
> 
> hes got a nice house, XC90 but no DB9 :lol:


Sounds like me and my dad got a bacon roll or two from there at the Chelsea game!


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## Gleammachine (Sep 8, 2007)

My father has owned his current petrol station in West London for the last 30 years, before that he was a tenant at another site, so knows the business. 
It was a very sucessful business to be in before the supermarkets came on the scene and forced the independents into competing, during the times of petrol rationing you could dictate your own prices.

The carwash used to be profitable, now this is de-commisioned and let out to a handwash outfit.

Opposite in the hospital grounds an all night convenience store opened up nicking all his shop sales, it's on a busy through road in an up and coming area, but people now price hunt in regards to fuel, Supermarkets don't rely on profit from fuel, it's just an add on for shop sales.

As a business now it pays the staff wages, and very little more, hence we are currently in talks to sell the land to a property developer.


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## David (Apr 6, 2006)

Clark @ PB said:


> Sounds like me and my dad got a bacon roll or two from there at the Chelsea game!


free roll and square if i give the old hag a wee wink behind the counter - no idea if thats because its who i know or me giving her the horn :lol:


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## RobW (Jul 18, 2009)

I would say hotels, pubs and clubs are the money makers! 

1L of Smirnoff can be had for about £15 if you can haggle. 1L will give you 40 nips, sell them for £1.50 each (which is cheap!) and on that bottle alone you will turn over £60. On a busy night, if you can get people in the door, sell on average 6 bottles (240 drams to 100 people?!) along with beers and so forth and you will get a tidy profit! If you run it as a hotel too, rooms are almost 100% profit. A nice en-suite double room will sell for £50-£60 per night, maybe even more. sell ten of them and all it will cost is a few hours wages to service them, a few complimentary tea's and coffee's and a few biscuits!

I think selling fuel with all the Tesco's and ASDA's and Sainsbury's would be near impossible. You would have to match their price (or better it) and then try and make money on bottles of coke, packets of crisps and the ciggies.


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## centenary (Sep 5, 2010)

Have to admit, I feel sorry for petrol retailers. The profit margin is low which is why they all have to sell snacks, sweets, milk etc.

Imagine it, you spend thousands of pound for a tanker to deliver fuel that you sell at £1.32 a litre. Meanwhile, the price drops and everyone expects you to sell at a price maybe 5p a litre less than you paid straight away, not when your current supplies need replenishing.

If the price goes up and you increase your own price to match, you're profiteering and should wait until your next supply arrives!

Nope, cant see there being money in it tbh.


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## Richf (Apr 26, 2008)

RobW said:


> I would say hotels, pubs and clubs are the money makers!


I'd heard that 2 pubs close every week in England !! Having had friends who used to run a pub they lost almost everything and ended up in debt of £50k and theirs was a pretty successful pub, plus its long hours and hard work on your feet , no one gets rich running a pub , owing a few is a different matter.

My uncle used to own three Shell stations in South Wales , one had a large shop selling bikes and camping gear etc but he gave it all up due to poor returns , runs a small shop and post office now


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## Grizzle (Jul 12, 2006)

My other half manages or used too(not sure now) the accounts(she's an accountant) of petrol stations and even she said there is zero money to be made in petrol stations, i'll show her this thread if she can give any advice


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## Method Man (Aug 28, 2009)

I've wound up quite a few in my time.

My main observation is that margins are so tight that if anything adverse whatsoever occurs then you're in for a real hard time.

One place had roadworks close by that went on for nine months - sales halved almost instantly and didn't pick up again when the roadworks finished as people had found alternate sites.

The opening of even the smallest of convenience stores or corner shops within a 1/4 mile radius will have an immediate impact on trading.

The fuel retailers that are in the middle of bloody nowhere but on a main arterial road tend to fair better although the context of 'better' is very subjective.

Unless you're buying into an existing proven site in an already fully developed area I'd be inclined to look elsewhere to invest my cash.


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## RobW (Jul 18, 2009)

Richf said:


> I'd heard that 2 pubs close every week in England !! Having had friends who used to run a pub they lost almost everything and ended up in debt of £50k and theirs was a pretty successful pub, plus its long hours and hard work on your feet , no one gets rich running a pub , owing a few is a different matter.
> 
> My uncle used to own three Shell stations in South Wales , one had a large shop selling bikes and camping gear etc but he gave it all up due to poor returns , runs a small shop and post office now


The hotel / pub / restaurant I worked in for a lot of years was HUGELY successful. 14 rooms, usually full every night (even in winter!) and in excess of 300 covers daily and never an empty bar. We were paid by cash in an envelope to save bank charges (all PAYE!) and they still made enough to live a life of luxury. In all fairness, it was ideally situated in a small golfing / beach town and had very little competition. And they didn't owe money to the bank or to a brewery!

With fuel being so closely watched now, people are being careful of where they fuel up now. Anyone else remember fuelling anywhere, no matter what the cost was?! I used to fuel at a small station in local town which was in the AA handbook as the most expensive place in the UK! And that was back in the late 90's where £20 was a lot of money and a lot of fuel!

Is the 7% based on profits or based on 7% of your investment?!


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## David (Apr 6, 2006)

RobW said:


> I would say hotels, pubs and clubs are the money makers!
> 
> 1L of Smirnoff can be had for about £15 if you can haggle. 1L will give you 40 nips, sell them for £1.50 each (which is cheap!) and on that bottle alone you will turn over £60. On a busy night, if you can get people in the door, sell on average 6 bottles (240 drams to 100 people?!) along with beers and so forth and you will get a tidy profit! If you run it as a hotel too, rooms are almost 100% profit. A nice en-suite double room will sell for £50-£60 per night, maybe even more. sell ten of them and all it will cost is a few hours wages to service them, a few complimentary tea's and coffee's and a few biscuits!.


if you have an established nightclub then you are onto a winner, although in Glasgow, ive heard a few horror stories from someone who started up a nightclub and was "forced" to close down by the players who basically run all of glasgows nightclubs...so you need to watch out for that.

Good money but during the week its dead, you need promos and the govt are trying to stop these cheap drink promotions now.

some of the clubs in glasgow probably turn over close to £10,000 a night at the weekend minus costs, but still a tidy return on money invested


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## Estoril-5 (Mar 8, 2007)

7% of investemnt.


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## Nanoman (Jan 17, 2009)

Estoril-5 said:


> 7% of investemnt.


Guaranteed 7% of investment with no risk. Then go for it also tell me where I sign up. I'd invest as much as I possible could right now. Obviously I would carefully read the small print and fully expect to find out that I'm not getting 7% of my investment guaranteed with no risk.


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## SimonBash (Jun 7, 2010)

Gleammachine said:


> My father has owned his current petrol station in West London for the last 30 years, before that he was a tenant at another site, so knows the business.
> It was a very sucessful business to be in before the supermarkets came on the scene and forced the independents into competing, during the times of petrol rationing you could dictate your own prices.
> 
> The carwash used to be profitable, now this is de-commisioned and let out to a handwash outfit.
> ...


Rob if he is looking to sell the land be aware (if you are not already) that the issue of Environmental Impairment Liability Insurance will probably crop up as any purchaser will have it brough to their attention that the land is probably 'contaminated' to some extent due to the long-term used as a filling station, as the underground tanks tend to leak over time.

Sorry to go off topic a bit, a client of mine had this issue raised by his lender (he was buying a garage that had only 2 pumps) just before exchange:wall:


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## Gleammachine (Sep 8, 2007)

SimonBash said:


> Rob if he is looking to sell the land be aware (if you are not already) that the issue of Environmental Impairment Liability Insurance will probably crop up as any purchaser will have it brough to their attention that the land is probably 'contaminated' to some extent due to the long-term used as a filling station, as the underground tanks tend to leak over time.
> 
> Sorry to go off topic a bit, a client of mine had this issue raised by his lender (he was buying a garage that had only 2 pumps) just before exchange:wall:


Yes totally correct Simon, the potential buyer has payed a non returnable retainer, this gives them the opportunity to investigate the level of contamination in the ground around the tanks, and then make a decision upon their findings.


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## SimonBash (Jun 7, 2010)

Gleammachine said:


> Yes totally correct Simon, the potential buyer has payed a non returnable retainer, this gives them the opportunity to investigate the level of contamination in the ground around the tanks, and then make a decision upon their findings.


Good stuff, stage 2 survey will be undertaken then including samples that can be analysed. This will enable them to find out if insurance is available (and at what cost) for past, existing and future spread of pollution.


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## T.D.K (Mar 16, 2011)

I used to work in a fuel station, I got on well with the owner and he was very frank about the state of his business, they normally broke just about even and he was always holding meetings to ask people to reduce their hours voluntarily (no one did) he never made redundancies at the time though.

He has since sold to bigger operator now.

Even with a restaurant and a huge parking area for HGV drivers on a reasonably busy road to the midlands, they couldn't make money.


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## james243 (Jun 9, 2008)

have a look at the fuel market reviews on http://www.forecourttrader.co.uk/

Very interesting comparisons on there from the last few years, drop in forecourt numbers, effect of supermarkets and the major oil companies divesting their assets.

It'll be interesting to see what happens in the future...


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## Franzpan (Mar 2, 2009)

I work in one. I think its like any buisiness, get it right and you can make Mega bucks but get it wrong and... you know the rest.

The one I work for is part of a huge chain in N.Ireland, running around 70 sites. Our site seems to be doing fine but I never really hear just how much profit we make. Our biggest earner is the shop though, fuel is more to draw people in. We are cheaper than the local supermarket fuel sites though.

There is a guy who owns two very busy garages at the other end of town, he seems to be making a mint. Drives a porsche 911, cayeene, Audi A8.


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## David (Apr 6, 2006)

Franzpan said:


> I work in one. I think its like any buisiness, get it right and you can make Mega bucks but get it wrong and... you know the rest.
> 
> The one I work for is part of a huge chain in N.Ireland, running around 70 sites. Our site seems to be doing fine but I never really hear just how much profit we make. Our biggest earner is the shop though, fuel is more to draw people in. We are cheaper than the local supermarket fuel sites though.
> 
> *There is a guy who owns two very busy garages at the other end of town, he seems to be making a mint. Drives a porsche 911, cayeene, Audi A8*.


these kind of people don't tend to keep all their eggs in one basket, chances are he'll have a few different companies - in case one has a quiet spell, probably has property for example.

might be wrong, but from anyone ive spoken to with "a good deal of wealth" doesnt have it all tied up in one business :thumb:


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## Franzpan (Mar 2, 2009)

David said:


> these kind of people don't tend to keep all their eggs in one basket, chances are he'll have a few different companies - in case one has a quiet spell, probably has property for example.
> 
> might be wrong, but from anyone ive spoken to with "a good deal of wealth" doesnt have it all tied up in one business :thumb:


I know what you mean, generally if someone has one succesfull small(ish) business they will have another one. My mate used to work for this guy though and hes pretty sure he only has the couple of garages.


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