A gas station can be one of the more common types of businesses for individuals to start. While this can be a highly profitable venture, it is important for individuals to understand the reality that not every location will be suitable for one of these enterprises. To ensure that your new gas station will have the best chances of being profitable, you will need to consider some of the factors that will play the biggest roles in determining whether a gas station will be feasible at the location you are considering.
Type And Volume Of Traffic
In order for a gas station to be profitable, it will need a steady supply of vehicles passing by it. Due to the prevalence of gas stations in most areas, individuals will typically choose the most convenient option. As a result, placing your gas station in an area with high traffic can be essential for ensuring that it has the customers it needs to be profitable. In addition to considering the volume of traffic, it is also beneficial to be aware of the type of traffic. For example, being located near a road that has predominantly commercial truck traffic can influence the type of fuel that you carry as well as the size of the fueling bays.
Local Tax Rates
Taxes can be a major burden for new gas stations. In addition to being subjected to the fuel tax, these enterprises will also need to pay property taxes as well as sales tax. These expenses can either eat into the business's profits or force it to raise its prices to where it may no longer be competitive. When evaluating a potential location, you will want to be mindful of the tax rates for it as well as the rates for the neighboring properties. Due to the geography of county and city lines, it may be possible for the tax rate to be substantially lower within a matter of blocks of the area you are considering. In these situations, it will be necessary to review whether it will be worth relocating the gas station to take advantage of these lower tax rates.
Most Popular Products
There can be significant regional variations in the products and goods that customers of your gas station will want. As part of any feasibility study, it can be worth considering the goods that will be the most likely to be purchased by those visiting your store. This can increase the complexity of the feasibility study, but it can allow you to be far more strategic when you are first stocking your store.
For further tips, reach out to a company that offers services such as gas station feasibility studies.Share