Valuing, Buying & Selling Gas Station Operations

Project Description

Whether you are a business person, CFO, banker, investor, attorney or newcomer to the gas station business, this book will increase your valuation and transactional skills. It is like having a gas station and convenience store consulting group on call 24 hours a day at a fraction of the cost.

This edition will be a resource of tremendous value. The book penetrates the gas station industry’s mystique and empowers you by revealing, in layman’s terms, the techniques for valuing these businesses and their assets. No other book on the market covers all of these issues in one source. It is packed with spreadsheets, examples, forms and checklists which really work. The knowledge you will gain from this book is powerful and explains important terms and concepts clearly.

Here you will easily understand not only how to value, sell or purchase any gas station operation but also discover:

  • Sample Franchise and Comparative Initial Costs
  • Industry Leaders
  • Ranking of Top Stations in America by Number of Locations
  • Checklists for Important Items for Acquisitions
  • The Nuances of a Gas Station Operator’s Revenue Streams and Expenses
  • How to Analyze an Operator’s Financial Statements
  • Compare a Gas Station Operator’s Ratios to the Industry
  • Gas Station Business Valuation Rules of Thumb
  • Analyzing Cash Flows for Operators
  • How to Crank Out Discounted Cash Flows
  • Valuing the Real Estate of Gas Stations and the Nuances Which can Drastically Affect Value
  • What Changes are Likely to Happen in the Next Five to Eight Years
  • Business Acquisition Rates of Return
  • Real Estate Cap Rates for Various Gas Station Operations
  • Typical Equipment for Various Gas Stations and C-Store Operations
  • How the Equipment can Make or Break an Operation
  • Equipment Value in Use versus Orderly Liquidation Values
  • Calculating a fair market rental rate in 5 minutes
  • Gas Station and Convenience Store Resources

This book is the only one of its kind with an in depth overview of the valuation of gas station operations.

Chapter 1 (This chapter provides a comprehensive overview of the gas station industry and the rapid changes which are taking place in this industry. This chapter focuses on the History, Trends, Industry Makeup, Gas Station Demand, Industry Trends, Industry Trade Organizations, Revenue Streams, Supply and Demand, Industry Competition, Risks in the Industry, and the Regulatory Environment of the Industry.

Chapter 2 (Analyzing a Gas Station’s Financial Statements and Operations) provides a primer on basic financial statement ratio analysis and an overview of adjustments for extraordinary and nonrecurring items. Although these adjustments are not as critical for larger businesses, they are crucial for understanding and valuing closely held businesses.

Chapter 3 (Summary of Business Valuation Approaches) presents a summary of the various approaches to valuing a business. More importantly, it presents an overview of which valuation technique is most useful, when comparing the values during a reconciliation.

Chapter 4 (Business Valuation) looks at different methods of valuing a gas station business.

Chapter 5 (Asset Valuation for Gas Stations: Real Estate): Real estate may sometimes constitute the largest component within the fixed asset category on a balance sheet. This chapter gives a critical primer in what to look for when accounting for the real estate asset or lease, as part of a gas station business acquisition or valuation. It also addresses the different types of gas stations, leases, and typical methods of valuing the assets.

Chapter 6 (Equipment) Every business is sold with equipment. However, knowing how much the machinery and equipment are worth will assist the purchaser in determining the amount of goodwill that a buyer would pay for as part of the overall purchase price. After understanding this chapter, you will be able to notice how a balance sheet can change radically, based upon the definition of value, as well as to be able to calculate the differences in equipment values.

Chapter 7 (Selling and Buying a Business: Intro) This chapter deals with purchase offers for a business, brokers, and the motivations of both buyers and sellers. Most sellers have no knowledge of the relationship between cash flow and value. On the other hand buyers pay for the history of the company and not the potential or proforma income.

Chapter 8 (Buyer/Seller Due Diligence) Here you will learn the deceptions which sellers use to increase the earnings of a business. Due diligence by a buyer is time well spent. The chapter also provides a great overview of a seller s due diligence on a buyer.

Chapter 9 (Selling a Business: Terms and Financing) Terms of an agreement and financing resources can make or break a deal for most closely held businesses. Since most small businesses sell with seller financing, the terms and financing are intricately related. This chapter focuses on the basics of negotiating and structuring seller financing. In addition, it shows the nuts and bolts of the feasibility of the purchase price as it relates to the new debt burden which will be incurred after the transaction. Most importantly, the chapter provides sanity checks against rules of thumb.

Chapter 10 (Selling a Business: Asset vs. Stock Sale) This chapter describes the impact of a stock versus an asset sale on the purchase price. While contingent liabilities are a factor, the preference of both the buyer and seller is almost always based upon tax ramifications. It also describes the mechanics of a purchase price allocation for tax purposes.

Chapter 11 (Selling a Business: Finishing Steps) is critical for Asset and Stock Sales.

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Project Details

April 24th, 2015
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Frazier Capital Valuation provides appraisal services in the disciplines of business valuation, commercial real estate, and equipment.

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