Buying a Service Station is easy. Buying the right service station can be tricky

AUTHOR

Bruce Coudrey

If you are thinking of buying a Service Station, you should consider if the Service Station is Metro or Regional – and which option offers the best returns

The location of a Service Station will likely be first on your list since the direction of traffic flow indicates if the Service Station is the nearest service station, which can “make or break” a service station – whether you buy a bp service station, Puma or Caltex service station. There’s a clear distinction between metropolitan and regional locations when it comes to buying a Service Station.

Service stations depend on a number of factors to be successful. And no two will be the same in profitability. But they do divide into two groups: metro and regional.

1. Metro Location:

 Metro locations are highly sought after for their convenience and ease of staffing. Metro stations can be based in any suburb.  Owners can invariably travel to the location with ease and also have all the benefits of city dwelling. However, such service stations usually compete in a price-sensitive market with other Service Stations nearby and city customers can be quite disloyal.

 Regular customers, previously a given, are becoming a thing of the past in metro locations, as shoppers look for discounts, value-for-money and great customer service. As an operator, you have to be on top of your game all the time. There’s no day off in customer service.

 Heavy discounting by supermarket giants is difficult to compete with. The only reason other service stations are surviving against supermarket discount coupons is the customer service offered by independents.

 Staff manning the console in the supermarket-owned service stations, are simply there to take people’s payments. They’ll often promote what’s in front of them and may throw in a ‘goodbye’, depending how they feel.

 The independent service stations recognise that they have to provide more personal service.  The staff and/or owners who work in the business know their customers, and engage in chit chat. And they know their customers well enough that they promote only what they know their customers will go for.

 Service station customers are shoppers of necessity. They don’t enjoy paying for fuel so great care should be taken to make them feel good. 

2. Regional Location: 

A major disadvantage of owning a service station in a regional area is the owner often has to move to that location and mostly change their lifestyle to suit the business.  But the benefits are many and there are still regular loyal customers who support local businesses.

 Regional service stations for sale are usually reasonably priced. So it won’t break the bank to buy a decent service station in a regional area. Competition is not usually intense but healthy in regional areas. And other service stations don’t tend to undercut. So profit margins are generally higher than those in metropolitan areas.

 In recent years regional service stations have been gaining favour in buyers’ eyes. Those who are looking to start their business in the service station industry are looking more towards regional areas. This is because they’re priced more reasonably and typically have low overheads.

 For these reasons, we can expect an increase in regional service station sales. Buyers are now keener to buy in regional areas rather than in capital cities.

If you need any advice on buying or an appraisal for your existing service station in Victoria, please contact our Service Station Specialist Karthik Arasu.

Karthik Arasu has been with Benchmark Business Sales & Valuations since 2014 and is Benchmark’s Service Station Specialist in Victoria. After graduating in 2001 from Swinburne University with a Master of Engineering (Manufacturing), he started his first service station in 2002 and have successfully owned & operated multiple service stations.

Contact Karthik Arasu

0422 310 325

karthik@benchmarkbusiness.com.au.

https://www.linkedin.com/in/karthik-arasu/

 Benchmark Business Sales and Valuations