SERVICE STATIONS

There is always strong buyer demand for good service stations. They are one of the few SME’s that are regularly successfully run by staff with absent or semi-absent owners overseeing them remotely. This allows owners to accumulate more than one site and it isn’t uncommon for ‘clusters’ of service stations to share the same owners. This is very difficult to achieve with most other small and medium sized businesses. Modern technology allows owners to closely monitor key indicators and quickly pick up any irregular activity in the business from any location with internet access. With no technical qualifications required and relatively superficial customer relationship requirements service stations can be successfully owned by any buyers who have good general management and business administration skills. The products being sold are simple commodities so features such as location, security of tenure, fuel supply and age and condition of plant and equipment drive value. The price paid for service stations is relatively high compared with other SME’s due to the low levels of personal goodwill and the, relatively, semi-passive nature of the investment, especially for high volume sites. Multiples of owner’s discretionary cash surplus can range from 3 to 6 times, or viewed another way, ROI (EBIT) can be as low as 10 – 20%.