Buyer's Guide · Gas Stations
What's a fair price for a gas station?
Most gas stations sell for 2.0× to 3.5× SDE, the owner's real take-home earnings, with inventory (usually $20,000 to $60,000) added on top. So a station with $200,000 of SDE is worth roughly $400,000 to $700,000. Where it lands in that range comes down to the brand, the lease, the age of the fuel tanks, and the traffic.
First: what is SDE?
SDE stands for Seller's Discretionary Earnings: the total financial benefit a single owner-operator takes out of the business in a year. You calculate it by starting with net profit, then adding back the owner's salary and any personal or one-time expenses run through the business: health insurance, a personal vehicle, one-off legal fees, and so on.
Why not use revenue? Because revenue is vanity. A station doing $3M in fuel sales can take home less than one doing $1.5M once you account for razor-thin fuel margins. What you actually pocket is SDE.
Why not net income? Because net income is buried under the current owner's salary and add-backs. SDE normalizes all of that, so you can compare two stations, or the asking price to reality, apples to apples.
The formula
Fair price ≈ SDE × multiple (2.0 to 3.5) + inventory
Inventory ($20K to $60K) is counted separately, verified at closing.
What moves the multiple up or down
Pushes toward 3.5×
- A recognized fuel brand (Shell, BP, ExxonMobil)
- A long lease (10+ years remaining)
- Newer underground storage tanks
- A corner lot with a traffic light and high counts
- Recent, verifiable renovations
- A growing fuel-volume trend
Pushes toward 2.0×
- Unbranded / independent
- A short or soon-expiring lease
- Tanks over 20 years old
- Known environmental issues
- A declining fuel-volume trend
- A non-assignable franchise agreement
A worked example
Say a seller's P&L shows $1.8M in revenue. After you add back the owner's $70,000 salary and about $15,000 of one-time and personal expenses, SDE works out to roughly $200,000.
At 2.0 to 3.5×, that's a $400,000 to $700,000 business. Add about $40,000 of inventory at closing, and you're looking at roughly $440,000 to $740,000.
Now suppose the seller is asking $850,000. That implies a multiple north of 4×, above the normal range. It's not automatically a “no.” But the brand, lease, and tank condition had better justify it. If they can't, you've just found your negotiating room.
Sanity-check the P&L against these benchmarks
| COGS (fuel + merchandise) | 75 to 85% of revenue |
|---|---|
| Rent / lease | 3 to 6% of revenue |
| Labor (excluding you) | 4 to 8% of revenue |
| Utilities | 1 to 3% of revenue |
| EBITDA | 5 to 12% of revenue |
| Fuel gross margin | $0.15 to $0.30 per gallon (a flat amount, not a %) |
If a P&L is wildly outside these ranges, it doesn't automatically mean fraud, but it means you ask why. Either the situation is genuinely unusual, or the numbers have been massaged.
Red flags that quietly wreck the valuation
- A multiple that mysteriously jumped: “it sold for 5× three years ago, but it's worth 10× now.”
- Underground tanks over 20 years old. Replacement runs $100,000 to $300,000, and it becomes your problem the day you close.
- A short, expiring, or non-assignable lease.
- Environmental issues. Check the EPA's ECHO database and the state UST registry before you fall in love with the deal.
- Fuel-volume claims that don't match the supplier's delivery records.
- Suspiciously round, identical revenue every single month.
Want this done automatically for your deal?
Everything above is the manual version. Upload the seller's P&L, tax returns, and bank statements, and BizScore computes the real SDE, applies the right multiple, compares it to the asking price, and flags every red flag on this page, each backed by the exact document it came from.
Frequently asked
- What multiple do gas stations sell for?
- Most sell for 2.0× to 3.5× SDE (seller's discretionary earnings), with inventory added separately. A stronger brand, a longer lease, newer tanks, and higher traffic push toward the top of the range.
- Is a gas station priced on revenue or on profit?
- Neither directly. It's priced on SDE: the owner's true take-home, which is net profit plus the owner's salary and add-backs. Revenue can be misleading because fuel margins are thin.
- Does the inventory come on top of the purchase price?
- Usually yes. Merchandise inventory (typically $20,000 to $60,000) and the fuel in the tanks are counted separately and verified at closing, not weeks before.
- What makes one station worth more than another?
- A recognized fuel brand, a long assignable lease, newer underground tanks, a high-traffic corner location, and a growing volume trend all push the multiple up. The opposites push it down.
Keep reading
About this guide
BizScore is built by first-time business buyers — people who watched someone close to them lose their life savings on a deal that looked clean on a spreadsheet and fell apart in the documents the seller never volunteered. That experience is why these guides exist, and why every BizScore report cites the exact document behind each finding.
Where the numbers come from: the benchmark ranges in our guides — SDE multiples, expense ratios, typical timelines — are widely-used industry rules of thumb, cross-checked against the analytical benchmarks BizScore applies inside its reports. Dollar figures such as a ~$15,000 quality-of-earnings review or a $5,000 deal attorney are representative of what buyers typically pay, not quotes; actual costs and multiples vary by deal. We review these figures periodically — last updated June 2026.
BizScore is an information service — think of it as a Carfax for a small business — not a CPA, an attorney, or financial advice. Use it to decide where to spend your professional dollars, and bring in a qualified professional before you sign anything.
This guide is general education, not a formal business appraisal or financial, legal, or tax advice. Every deal is different. Verify against the actual documents and talk to a qualified professional before you sign anything.