GSB-41: 7 Risk Factors You Should Check off Before Buying a Gas Station Due Diligence Part 2

There are risk factors associated with buying any new businesses, I am sure you all know that but when it comes to buying a gas station, last week I spoke about 9 factors to check as part of your normal due diligence for your business. This week I want to address 7 hidden risk factors that can also literality make or break your business even before you get started with your new business, so you need to check and verify that will not be the case ...stay tuned and I will tell you all about them...

 

Let's get started.

As you are aware that most every new business has its own sets of challenges and risk factors. I spoke about many business risks and challenges in episode 32, if you have not heard that episode, I strongly advise you do so as I discussed many of the legal issues your business can face and how to mitigate them the proper and cost-effective way.

As you recall this is part of the two part due diligence series I wanted to cover. In part-1 which was episode 40 we covered the usual 9 due diligence factors like

1. The store location
2. Demographics
3. Age and brand
4. Physical inspection of the store Talk about 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

But today I want to discuss something that is a different kind of risk your business may face but you can again mitigate them by checking on them before you buy the business. It is similar to buying a used car, and before you buy that far, you should take it to a great mechanic and have them check the car to the bottom to make sure there are no serious issues with the car and that it is in good condition.

Similarly in business, you can do the same thing, but instead of taking to a mechanic, get help from a profession who knows and understands what needs to be done. But you can also do the same thing if you spend a few days you too can do this task all by yourself and find out if the business you are about to buy is in good health or not.

These 7 risk factors are something that are very easy to overlook specially if you are not familiar with this line of business. It is not easy to detect an issue specially if you don't see it with your eyes.

Let's dive right in

Okay here are the 7 risk factors you need to check on:

1. Tanks (UST)
2. City Planning Commission
3. Upcoming mandatory upgrades
4. Profitability of the business
5. Fair market Price
6. Competition
7. Health, age and condition of the equipment and structure of the facility

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Cheers!