The Gas Station "Danger Zone"

Message Topic Search Topic Options Post Reply Create New Topic Printable Version

   I was chatting on the phone yesterday with Terry Monroe of American Business Brokers and we were talking about the state of the industry in terms of selling and reselling of the actual gas station and convenience store businesses.  You know, the kind of stuff that business brokers do.

Terry said that during this year of 2009, as in the past, he is focusing on helping business owners in the c-store industry who operate between 5 – 20 stores.  I asked him why he chose such a specific client base and he said, “Because those are the people who need our services the most.”

I asked him to explain what he meant by that and his answer was both something I’ve never thought of before and something that I thought was interesting enough to write about and share with you.

The theory goes something like this: Many people who operate between 5 – 20 stores are put in a tough spot because they’re stuck between two categories.  They’re in a gas station “danger zone” so-to-speak (my term, not his).

This size company is too large to operate using small-business tactics and they are too small to operate using large-company tactics.  As a result, they struggle to take advantage of the opportunities that either category has to offer.

If they would divest some of their assets, these companies could operate more efficiently, by managing a smaller number of stores, and raise profits based on increased margins.  If they would acquire more assets, these companies could take advantage of economy-of-scale, by bulk purchasing and distribution, and increase profits based on sheer volume.

Terry cited specific examples and anecdotal evidence from his time as a business owner and broker that made me believe this theory actually holds some weight.  I asked Terry if he’d develop this concept into a full length article or case study and I really hope he takes me up on it.

Anyway, what do you think?  Do you believe in the theory of the gas station “danger zone”?  I’d really like to hear from you.

Special bonus points go to retailers that actually operate between 5- 20 stores.  Who knows, I may have some GasStations.com ink pens for someone with a really good comment!

And Terry, if I misquoted you in any way, please respond and correct me.

Best to you all,

-Jon D.

Author	Message Topic Search Topic Options Post Reply Create New Topic Printable Version
Jon Davito Members Profile Send Private Message Find Members Posts Visit Members Homepage Add to Buddy List Admin Group Forum Administrator Joined: Dec 31 2008 Location: St. Louis, MO Online Status: Offline Posts: 19	Quote Reply Topic: The Gas Station "Danger Zone" Posted: Jan 14 2009 at 12:30pm
	I was chatting on the phone yesterday with Terry Monroe of American Business Brokers and we were talking about the state of the industry in terms of selling and reselling of the actual gas station and convenience store businesses. You know, the kind of stuff that business brokers do. Terry said that during this year of 2009, as in the past, he is focusing on helping business owners in the c-store industry who operate between 5 – 20 stores. I asked him why he chose such a specific client base and he said, “Because those are the people who need our services the most.” I asked him to explain what he meant by that and his answer was both something I’ve never thought of before and something that I thought was interesting enough to write about and share with you. The theory goes something like this: Many people who operate between 5 – 20 stores are put in a tough spot because they’re stuck between two categories. They’re in a gas station “danger zone” so-to-speak (my term, not his). This size company is too large to operate using small-business tactics and they are too small to operate using large-company tactics. As a result, they struggle to take advantage of the opportunities that either category has to offer. If they would divest some of their assets, these companies could operate more efficiently, by managing a smaller number of stores, and raise profits based on increased margins. If they would acquire more assets, these companies could take advantage of economy-of-scale, by bulk purchasing and distribution, and increase profits based on sheer volume. Terry cited specific examples and anecdotal evidence from his time as a business owner and broker that made me believe this theory actually holds some weight. I asked Terry if he’d develop this concept into a full length article or case study and I really hope he takes me up on it. Anyway, what do you think? Do you believe in the theory of the gas station “danger zone”? I’d really like to hear from you. Special bonus points go to retailers that actually operate between 5- 20 stores. Who knows, I may have some GasStations.com ink pens for someone with a really good comment! And Terry, if I misquoted you in any way, please respond and correct me. Best to you all, -Jon D.