Don’t Open A Gas Station Until You Watch This!

would you guys like to know how much revenue a gas station can generate it'll surprise and shock you so stick around and find out on this episode we are talking to parm paul jesse his wife casey and the other partner jazz couldn't make it they're a family-owned business that owned a total of eight gas stations so today we'll tell you how we turn a one million dollar investment into a 37 million dollar yearly revenue that's huge so stick around to find out about that and a lot more [Music] so parham thank you so much for joining us and sharing your story your family business tell us a little bit about your background and when you first bought your gas station so uh first gas station we bought it was 2019. uh it's been three years now we have a total of eight okay i did start in a retail about 15 years ago that actually kind of brought me into the owning a gas station again that's awesome so eight stations where are they located uh so we have a couple of the stations here in linden we've got a linda narco here vendor shell and then we have a one in custer it's also called factory shell and then we have a one in mount vernon in lake stephen and then we have another one in snomish so all over sort of in sonoma county skagit and wacom county okay and it's a lot of commuting i bet it is trying to keep an eye on all of them exactly yes okay and we're going to show you guys the fact or the bender on shell as well so you can kind of get a different perspective [Music] tell us when you first bought your gas station how much was it and how did you structure the deal so the first gas station we bought was the arco gas station so it was 3.5 million gas station uh we had to put down a million dollar as a down payment uh down payment came in all from saving wow uh working hard for the last 15 years myself and my husband paul owning a couple of trucks in a trucking industry and jesse our business partner also working full-time managing a couple of the gas stations so pretty much a million dollar from saving puts that into buying the 3.5 million

gas station and you finance the two and a half so what's important that you can mention in terms of the financing side of things good realtor it was exactly so we had a pretty good lender um the rate were pretty good sba loan at the five percent uh interest was what we got it at okay so we're here at their shell station here in linden let's check it out and continue asking more great questions about how you guys do what you do definitely one thing i wanted to start with is understand better your partnership right because you said family business but who's involved give us the names really quick and how all that came together uh so paul it's it's very close family so basically myself my husband paul and my brother-in-law jesse okay his wife who's my husband's sister casey uh my husband's brother del winder and his wife um gurpreet and we have a business partner um jess kearn okay and that's the sunset location that's the sunset location and his wife uh luck winter that's a lot of different people involved i mean different characters different everything right how do you guys make it work yeah we all have a one one mindset you know gotta gotta have a successful business so we all help each other out and um we all have our parts in the business who does what so i pretty much take control over the admin part of it and all the guys do pretty much on the stockings and helping out with everything but a couple partners are basically silent partners right they don't get involved in a day-to-day yes not on the day-to-day that makes sense [Music] i think this is an important question and so if i want to become a gas station owner how do i determine if i want to own a shell an arco or maybe just some local mom and pop shop and call it whatever what are the pros and cons of branded versus unbranded uh with being branded you your brand is already out there people already know about it people already are aware of it compared to being non-branded non-branded it can be a little bit hard to market hard to put your name out there so having it having an arko logo basically people already know about it people already know what the gas is my personal preference would be to stick with a brand i've known it from experience now and being a brand does way better do you get a little bit of that franchise assistance in a way you know how when you join a franchise they give you the systems the models do this and it'll be good or it's it's not like that here even though you don't like that here um there are stuff that we need to be in compliance with right but um overall basically um it's just do it you're you're doing your own thing doing it on your own okay [Music] so what absolute skills are needed to be a successful gas station operator would you say so i would say you got to be a really good with customers customer service is the major key in this if you have the customer service know your customers what they want and you're able to bring it in for them and that would be your key to have a successful gas station anything else you want to add in terms of any other skills that would benefit and help besides customer service i would say just to know your market know your community know what what's needed in that community and try to try to have your store involved a lot more in community so that way you get your local support you get your community support that has always been my number one key okay awesome i think that's very important let's talk about location i find gas stations in the middle of nowhere to in the middle of the city how important is it and kind of what would you be looking for to find your next gas station so location poll is really important um if you don't have the market for it then you're not going to be in the business for it so for example this location uh was a pretty good location right on the highway coming from canada this is the first gas station canadians would hit okay and uh also it's surrounded by a lot of industrial so we get a lot of a lot of business from our our local industrial we get a lot of customers from the london area also awesome and it seems like location is the only important thing for you it's the important key yes important key okay awesome you guys check out our podcast as well it's incredible we talk to people as experienced as parm and her team ask a lot more in-depth questions about all kinds of industries so check it out upflip.com forward slash podcast [Music] let's talk about marketing i've always wondered and never knew do gas stations market if so maybe differently what are you guys doing to just keep your name out there being a gas station owner you don't get a lot of time to go out there to market anything for advertising or in social media but we do go out there a lot we are involved in community um we do sponsor some local teams uh 2020 and 2021 with this covet we haven't had a really um great success yet but in 2019 we did sponsor a couple of teams we do get involved in the in the in the local events um for example farmer parades and things like that so which actually really um puts our name out there so how do you get involved is it like just print a bunch of t-shirts that says lyndon arco or you're physically there waving the flag we do that to me myself and my team we go out there we hand out coffee cards we we hand out candies to the kids in the parades and um so the team that we sponsor in 2019 uh they end up actually creating a jerseys which had a lyndon arco written on it and the kids did walk in the parade wearing those jerseys nice and we end up getting a couple of the jersey turkeys for ourselves and people obviously know you're a gas station operator local okay that's pretty cool that makes sense [Music] what about overhead for this station on average what do you need to bring in just to cover your costs um on average you're looking at looking at a payroll looking at the expensive anywhere close to 15 to 20 thousand dollars a month would be the expense that doesn't include inventory and that does not so your inventory basically comes in from your from your cash flow so you're buying and you're selling it you're buying and you're selling okay now you guys hear how they're busy that door just doesn't stop opening and closing opening closer this is just speaks a lot about how you guys operate next question is like pricing you got your recess you know the usual candies yes since this is arco does do they set prices or do you control that no we control our prices it's um it all on what kind of margin you want to make so we basically stick with pretty standard margin we don't like to overprice anything but we don't like to underprice anything either so we we have a reset margin and approximately we try to stay within the 30 percent 30 is that across that is that is a pretty standard margin on the inside sales pretty much okay exactly okay and then so there is no specific arco requirement that you carry certain products or anything that's totally into your that's totally on us yes okay how do people make a decision to come to this gas station versus the one just down the street for example you know because there's a lot of potential gas stations exactly there's a lot of competition uh when you think of it every corner pretty much has a gas station on it it can be pretty challenging but you just got to know your customers know what your customers are looking for my team and myself were great about asking customers hey is did you find everything is there anything we can help you get it in the store no i've never heard any gas station won't ask me we definitely do that uh so if there's something that we don't carry we will ask and have that bring bring to the store so that way next time they come in they have it in the store that's right so that makes us where people want to come and shop at this location rather than down the street down the street okay what else about determining whether a gas station is run properly or not what what what's one person can look at to say okay if if this is clean then the rest of the place may be a good place to visit hey i i heard from i was at a convention i did hear hey is your restroom is clean your kitchen is clean so my employees and myself we stay on top of it cleaning is the one big thing that is uh is a major factor in this sort of business so keeping it clean clean store good customer service is what bring our customers back in the store absolutely well said and that's probably what made you guys get to the 37 million dollar annual revenue for all stations that's insane you guys stay tuned for more awesome info where's your revenue at now across the stations on average per month um on average i would say on our slow stations close to 250 to 300 000 a month and or a busy station anywhere from 400 to 500 000 a month wow okay and that's the number that will get you to 37 million exactly together together guys 37 million running an operating gas station yes you guys know exactly what you're doing and that's awesome so as far as the shell location i think viewers would like to know how does this shell station make you money inside store sales versus outside on average where is it at on average um it's about 40 outside 60 inside okay so outside 40 it was bring people inside the store right so majority of your sale majority of your profit is going to be from inside store and where are the profits i know man you mentioned at arco that you typically go for about a 30 profit on the inside merchandise right is that about the same here as well exactly about 30 and where's fuel at because it all depends it everybody likes to have their margin set differently okay the lower the margin more the volume so that's how we like to go with it so pretty much typically anywhere from 20 cents to 30 cents is the average margin you want to stay with okay anything higher than that can can fall into not being so busy let's talk about employees how many employees do you have across the whole team what do you pay them on average and how do you know they're not stealing from you on average each store we have seven to eight employees seventy eight seven to eight including one manager so average about eight to nine employees but yeah like so that's like almost 40 people right exactly okay yeah with the minimum pay we do have to pay a little bit higher to keep the staff uh we are at 15 to 16 per employee um per hour and um as far as how do you know they're not stealing yeah it's a little hard um there's a lot of inventory we do have inventory system in place which keeps track what comes in this store what goes out right and uh if there is an issue that we find we do do audits we do do inventory cycle counts which helps us to control our inventory and know if there's anything going out the door without how often are you doing inventory accounts the visits we try to do that once a month so that when we have a good number good number of water inventories in the store [Music] gas stations are known to be a target place for like scammers and thefts have you had any issues with that if you could just briefly share an experience and then what kind of security do you have at your locations uh paul luckily we don't have any issue or we haven't had any issues on any of our sites yet we do have securities in place so we do have a log book that we go out on our pumps every four hours to check make sure nothing unexpected is on our pumps so um anybody who's working on the shift would go out there and check to make sure there's nothing on there and they will come back and record it what are they checking specifically what are they doing so pretty much anything on the yeah pretty much anything on the pumps anything on the pin pad under the pin pad just to make sure nothing has been tampered with transferred with yes but you've never had that issue we have not had an issue here that is awesome clearly you have gas stations in the right locations yes that's the right stuff exactly [Music] what system and software do you use to manage inventory across all the eight stations so we have a couple of different softwares at the arco here we have the uh software with the verifone so basically controls what we sell in the store what kind of inventory we have in the store and um at the shells is still pretty new okay we have the s2k system there which controls the inventory and what goes out of the registers got it okay is it a subscription you pay for or is it something you buy once and then you operate it yourself uh you do buy that once and there is a monthly charge on it there is okay there is do they help you with some or just it's just kind of a subscription charge is what you mean uh they do help you so if you ever get stuck on something you need help with they do provide you that customer service custom supports yes is there it's not just like hello and anybody there get a real person there okay yes awesome [Music] a lot of people are asking whether if you have a shell station or arco or 76 are those a franchisee franchisor relationship or what what kind of setup and structure is it so it's basically a contract that you you sign with a company okay so contract can be anywhere from 10 years to 15 years wow okay and that's that's it that's that's about it you basically agree to sell their fuel exactly so it's all about the fuel it's all about the fuel it's all about what brand you want to be with okay [Music] so now that we're talking about these gas pumps i'm curious how often you have to fix them how often they break what breaks the most tell us about that the pump itself does not break that fast uh the only thing we would ever have issue is with the with the nozzle so these needs to be replaced um depending on the use of the pump i would say maybe maybe once a month but overall we do have a maintenance contract with the company who comes in and does the does the repair on the pumps if it's needed changing filters and we also have a company who come and does the regular inspections on the ground so which is very necessary are they related to shell or anything or just a third party just a third-party company that comes in does does their uh does their yearly inspections and their quarterly inspections uh what do they cost tell us a little bit about that uh breakdown that can run anywhere from anywhere 600 to a thousand dollar uh sometime it could be more depending on if there was anything else that needed to be done so it's like a per hour thing or per repair per part it is by hour and by part so uh it depends on what's needed awesome okay that's good to know uh guys one thing i forgot to mention earlier in the video is that you check out our website upflip.com if you're looking for gas station opportunities you'll find them there and it's the best place to go so some of your gas stations operate 24 7 others don't can you talk about how you came to that decision how does one watching right now who operates a gas station maybe he needs to understand does he operate 24 7 does he operate half the day how do you make that decision and really logistics with employees and everything so it all depends on where your station's at for example um the arco station is surrounded by a lot of uh industrial area so there's there's some factories who are open 24 7 here so uh making this one 24 hour totally made sense so that way we get a lot of the a lot of the shift work people who come in work night shift they have the chance to to shop at the store the other station vendor shell is 18 hours since there's not a lot of um a lot of buildings or a lot of a lot of community in the area who would take the advantage shopping at night so that one stays at 18 hour and then one more station in um in mount vernon is the other one that we open 24 hours that's again right on the highway and we get a lot of traffic so traffic is the determining factor for how many hours you stay open is that really what it comes down to exactly yeah okay and what about the logistics with employees working there and something happens at night you as an operator work do you get that phone call talk to us about those experiences i get the second phone call so the all of our stores have the uh managers who manage the sites so the managers get the first call if the manager doesn't answer then i get the calls so most of the time ninety percent of the time the manager will arrange for someone to pick up the shift or if they can't find someone then they end up helping out or we end up going and helping out okay so there's still potentially some involvement exactly of course one thing i noticed and i know because we've been personally or professionally involved in terms of some of these deals so your gas stations have another aspect to them that i don't see at every gas station that is a food aspect and we'll show a ton of b-rolls on that you've got subway you've got domino's walk us through the advantage of that or disadvantage of that because it doesn't go to your revenue per se or what does that do so basically it does bring a lot of more customers in the store so having a food is is a major thing so having it because people come to a gas station they want to have something something quick quick bite to eat to fill up their tank and on the way they go so if there's a food involved then it just makes a one quick stop shop so that way they get their food they get their gas they get their snacks and their their drinks and off they go is it is it an expense to you to have that component in a way not at all not at all not at all okay it's actually you're giving up your square footage it's actually more beneficial for us because it does bring in a lot more customers [Music] what software you use to know that the top items are always stocked right is it a system is it a tool is it your own analysis and research how does that happen uh it's basically paul everything so the our grocery distributor will give us the catalogs which will have the top 10 items that you must carry so for example in the salty snack items or in the candy aisle it'll have the top 10 items so you always want to make sure that you cut carry those top 10 on top of carrying what your customers would like got it so that's pretty easy for you you already know the top sellers and that's from your distributor and plus you know you know your customers so if your stores by the by a lot of kids or if it's in a residential area of course candy is your your go-to aisle okay [Music] i would think that there may be a lot of turnover in gas stations but i think that would come down to the management right it is i haven't seen that with your stations so i want to know what's your secret to hiring great employees and keeping them here for a long time so paul there isn't really a secret but what you want to look for is someone who's already had some sort of customer service experience and also who hasn't shift from job to job so pretty much anybody who's shifted job to job kind of gives you red flags hey why is this person working only for a month and then moving into a different different job um so that's what i look for basically a long-term employment is what i look for and just providing a good training in the store just creating a good atmosphere to work in the store is what it basically takes to retain that employment here okay and i'm just curious it's more of a blitz question but i think it's important entice to what we're talking about here when you meet somebody that you're going to interview for the first time like yes what gives you good positive vibes in what is the opposite you just kind of know it from their first impression how they are talking to you how they're answering their question you kind of know it if this is gonna work or this is not gonna work and uh so far um i have not had issues at all where i've hired someone and didn't work out well anybody that i've hired so far has been always it's been it's been staying and working here that's awesome [Music] so were these stations brand new or existing in operation when you acquire them and what are the pros and cons of buying some that's already an operation or building a brand new one so the stations that we bought were already existing gas stations they were already operating um compared to buying in or setting up a new one could be challenging sometimes because you don't know how well they're going to go um i've seen a draft experience where one gas station will do great and then the other one whatever you thought it would be but it doesn't turn out to be that way right so being an existing gas station there are benefits because the market is already out there and people already know about it and uh you already have your customers that make sense you already see the numbers that it's doing exactly and you pay value based on what it's generating exactly and then the the benefit that you have is that to to grow and more in sale since we've taken over we've doubled the the sales that is all doing by knowing your customers bringing in the right products that's insane that's all that helps that's it's possible [Music] what kind of special licenses do you need to operate a gas station that differs from say a retail store down the street uh you really don't need any special license uh the only thing you really need is um it's a trading depending on if you're doing arco if you're doing shell so there are trainees that require from from those companies i see so but for license wise you don't need any special license so give us a quick list of what lancaster you have currently now to just operate so currently just the basic licenses we have our liquor license or lottery license and we have our insurances in place for the business and for the tanks outside and then of course for selling food we do need a food permits this seems like a business where you have to have the most amount of licenses honestly sure very true is that true that is true wow okay so beware but be prepared um lots of income to be made exactly but it's a process to get in yes okay [Music] what did you think would be the most difficult part of operating and running a gas station before you bought one and did that turn out to be the case so when i bought first one i lived at everett um so first we thought staffing would be a little bit difficult okay when we bought the gas station everybody stayed when we took over and so far staffing has not been the issue so we have not had any any problems staffing was the big thing that i thought it would be the problem but we have not had that did you just get lucky or did you put the right people in place it's a small town um everyone kind of knows each other here and the employees who've been working here have been here for a very long time nice and um and they love it here they love working here [Music] and as far as the fuel industry gas stations is there a seasonality to the business like summers are super busy winners are completely dead can you walk us through the evolution of the the january through december uh with this type of business you're basically it's at 12 months you do see you're up and up and down so basically and during the summer time we have a lot of farmer workers here in this area a lot of people are traveling especially when the border is open so we do see a lot of traffic during the summer some winter can slow down a bit but i wouldn't say a lot so this is the business where you can pretty much make money throughout the year that's nice you don't get that in everything you don't get that exactly okay how long did it take you to recoup your initial investment with the first gas station so the first one when we bought it was 2019 and uh second one we bought was in 2019 end of the year so in december we made enough so that way we were able to come up with a down payment to buy our second one so from that from that generating income from the second one we went into buying a third one so pretty much in three years now we own eight gas stations yes but let's say you put in what a million dollars on your first one your own cash how long did it take you to get that million dollars back on that one station on that one station i would say in profit it can take you up to a good couple of years a couple years okay yeah that sounds good it's pretty reasonable and then you're all in profit after that's all we do exactly and then it's big party time it then it is yes definitely where do most of your customers come from like passer buyers local travelers how would you break that down so a lot of the customers are local customers and uh i would say maybe 20 of them passing by okay would be would be but majority of the 80 are the customers who live in the local basically you're dealing with 80 of repeat customers yes who we see on daily basis sometimes twice a day you know we've interviewed a ton of companies and the numbers are flip-flopped sometimes with them but this is awesome that for you 80 is people they're always going to come back exactly given a good customer experience so on that note how do you maintain that consistent customer experience with your employees across eight locations are you training them a specific way are they having to do something weekly share that with us a little bit uh we we have a daily checklist that everybody follows to make sure that they're doing what they need to be doing to maintain the store right so customers do want to come back by stocking by filling providing great customer service and basically just knowing what your customers are in for and making sure you have it so that brings them back over and over quick question for you for somebody watching right now who's operating only 12 hours and wants to maybe switch to 24 hours what would you as an experienced operator do changes you'd make yeah so first thing what you want to do is you want to see if it is beneficial to open 24 hour what kind of traffic flow you're getting if it's going to be beneficial for the neighborhood to open the store for 24 hours second you need to have a reliable staff so staffing sometimes can be a little challenging in this type of business so if you have a reliable staff if you've got a good management team who can manage it to have it open 24 hour then 24 hour is the way to go but that's it right there's no changes physically that you have to make to the gas station none of that stuff none of that okay yeah it's really the the demographics around it okay exactly you you want to make it worth it you want to make it right make your time worthwhile and be profitable be profitable exactly that's what our channel is all about making profits real true profits [Music] how did the pandemic affect your ratio of outside to inside sales did that change uh for this location yes it did because this location does depend on a lot on the canadian border so we did see a lot of decrease in our gas sales um pretty much close to about 50 percent so 50 of it was coming from canada so um but inside the store we have gotten a lot of community support local so we've been we've been busy inside but outside definitely about fifty percent decrease okay and as far as across all the gas stations what product would you say you sell the most of i know we talked about the the top sellers what are they some of them just out of curiosity a lot of it i would would say salty snacks so salty snacks beer it would be one of the one of the big ones the place of salty snacks and beer and beer is is the top is the main main thing pretty much in this industry i'm i'm betting 100 you like certain things and dislikes others so what is it for you what do you favor and kind of what things do you dislike mostly about doing what you do i really enjoy working on the floor i really enjoy working with customers um talking to customers doing things out on the floor i would say the one thing that i don't enjoy doing would be there's a lot of paperwork involved a lot of tracking a lot of bookkeeping um that is that is just the one thing that i would say if i was to at least like it okay i bet there's a ton of paperwork yeah there's a lot of people one thing that we enjoy you guys is when you support us by hitting that like button only takes a nanosecond so please do it thank you [Music] this has been a great interview what would be your one piece of advice to our viewers for creating the best customer experience in a gas station situation i would say know your customers know what your customers are in for ask your customers what they're looking for don't be shy to approach them and just just bring it in the store and have it ready for them awesome and if you live in the area of linden or walton county come by and say hi to this wonderful team so this has been great farm thank you so much to you and everybody else involved thank you well that's a wrap you guys a family-owned business of eight gas stations and they're not done they're going to continue acquiring more hope you took some golden nuggets and we'll execute on them thank you for watching take and then a second like this video subscribe to our channel and hit that bell so that you don't miss anything we appreciate you a ton

2022-01-16 22:03

Other news