September 16th, 2004
Fountain drinks are a goldmine!
As I was heading home from work in THE
CITY, I was not able to find a seat all to myself. I had to share
an end seat which have two benches faces each other. I shared the
seat with two prospectors who were researching for a future business. Evidently
the individuals were looking at purchasing a gas station/convenient store.
I tried to ignore them, but the conversation was loud and it was
fairly crowded as well. I decided to stay point and just my best
to ignore. The conversation just ended up being somewhat strange
so I will share it with this blog.
The individuals were viewing all the information was a computer laptop
where there were gas stations marked for sale. Information included
the annual sales for the business, the price, the square footage, and other
information. It appears the two prospects were not wanting to be
partners, but were reviewing what is the best deal. The individuals
did not want to have a gas station in THE CITY because of the amount of
competition with other vendors. The preferred location was going
to be a small town in a mid western state.
Now coming from a small town myself, I can understand the logic here. There
is less competition and if on a business highway/interstate it could be
lucrative. So the individuals talked about how car washes for a gas
station is not profitable. It only a plow to attract customers via
the convenience of getting gas and then washing your car. I did not
really see the importance at all as I pick a gas station based on the brand
and the price. Then the businessmen were looking at the books of
the business. There was not much information and one guy (who was
short in stature) asked why is there not enough historical info. The
other guy (who was tall in stature) explained that the current gas station
owners have only started to keep records since the decision of selling
the business. Now realize these people are working in the business
field right now and want to buy something from a small town where (most
likely) these people are not as formerly trainer as these buyers. I
asked myself do they not realize this?
Anyway the conversation then went to comparing all the businesses for sale
with its offerings. The short guy then exclaimed, "Oh my gosh
this one has fountain drinks and alcohol. Fountain drinks are a goldmine!
You can make a bundle from these alone. Plus you don't have
to spend much on maintenance." While it is true that a soft
drink fountain does not have much in expenses -- working in fast food there
is very little labor involved and most of the cost is for the drink, lid,
and straw -- I would have not spoke that loud about it.
Then the conversation went to the cost. There much had been which
was a deal: it was in an ideal location and was for sale for $1 million
dollars and had a nice amount of square footage for a convenient-type store.
The shorter guy exclaimed all you need is $250,000 to get a loan
approved. I thought OK if you have that much money laying around,
then what get a gas station. I tend to be conversation on things,
but I know from my business knowledge that is not that simple. I
would have find something more profitable or build a business outside of
retail. I only go to a gas station to get gas. Yes I may get
a bottle soft drink, but I don't go to a gas station to buy milk, alcohol,
chips, nor other goods.
Of all things to do on a ride home from work, I would not be crazied for
a convenient mart.
