When purchasing a gas station, due diligence is essential to ensure that you are making a sound investment and that you are aware of any potential risks or liabilities. Here are some important steps to consider during due diligence:
- Review financial statements: Carefully review the gas station’s financial statements, including income statements, balance sheets, and cash flow statements, to understand the business’s profitability and cash flow.
- Verify revenue streams: Verify the gas station’s revenue streams, such as gas sales, convenience store sales, and car wash revenue, to ensure they are accurate and reliable.
- Check for liens and encumbrances: Conduct a search for any liens, encumbrances, or outstanding debts that may affect the property or business.
- Check environmental compliance: Review the gas station’s compliance with environmental regulations and ensure there are no pending environmental issues or liabilities.
- Review contracts and agreements: Review any contracts or agreements related to the gas station, such as supplier contracts, lease agreements, and service contracts, to ensure that they are favorable and reasonable.
- Conduct site inspection: Conduct a thorough inspection of the gas station’s property and facilities to ensure that they are well-maintained and in compliance with safety regulations.
- Research the market: Conduct market research to understand the competitive landscape, demand for gas, and other trends that may affect the business.
- Seek professional advice: Seek advice from professionals such as lawyers, accountants, and business brokers to ensure that you have a comprehensive understanding of the transaction and any potential risks or liabilities.
By conducting thorough due diligence, you can identify any potential issues or risks associated with the gas station and make an informed decision about the purchase. If you require the assistance of a gas station closing lawyer feel free to contact our team at info@falconlawyers.ca or 1-877-892-7778.
