Calculating the monthly profit margin of a gas station is key. First, determine total monthly revenue, including all sales from inside and outside the store. Do not include discounts or refunds. Next, calculate total monthly expenses like payroll, utilities, taxes, and fuel costs. Subtract expenses from revenue to get monthly net profit.
Location affects bottom line. Average gross margin on gasoline is 15 cents per gallon. After expenses like rent and labor, about 2 cents per gallon profit remains. Convenience store sales generate higher profits. Car wash services and food sales also contribute to bottom line.
Gas stations make a 1% net profit margin. With gas at $3.50 per gallon, they make 3.5 cents profit per gallon. West Coast owners average $60,000 annual profit. Midwest owners average $61,000. South owners average $66,000. Cost to build new gas station with 4 pumps is $500K. Cost to upgrade existing station is $200-300K. SBA loans are the best option to buy/build a station.
Starting a profitable gas station requires significant effort and money. Must decide if worthwhile.