Gas Station Business Valuation Benchmarks

Gas station business owners, prospective buyers, and industry investors rely on a diverse set of financial benchmarks to assess the value of a business. We have compiled data from current BizBuySell listings and sold businesses to provide insight into the business for sale market and important benchmarks for pricing and evaluating gas station businesses relative to industry standards.

See also: Car Wash Valuation Multiples

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Highlights of Gas Stations Sold on BizBuySell

Gas station businesses listed and sold on BizBuySell are comprised primarily of locally owned small businesses engaging in gasoline sales. Most of these businesses include complementary components such as convenience stores, service bays, and/or car washes, which tend to be the profit centers.

Gas Station Business Transaction Trends

The median sale price of gas station businesses doubled in 2022 compared to the previous years, driven by increased financial performance, increased demand, and a reduction in supply. In addition, there has been a trend amongst private equity firms to buy up gas stations and the associated real estate and then "lease back" the property or "roll up" many businesses to sell later at a higher valuation multiple. Prices came down 20% in 2023, likely due to higher interest rates, and remained at the same level through 2024.

Gas Station Business Valuation Multiples

Valuation, or pricing, multiples are financial tools that allow for comparisons between businesses that have different levels of revenue and earnings. They represent the sales price of a business relative to its financial performance, and given enough individual business sales data, they represent what the market is willing to pay for a business given its revenue and earnings.

Valuation Trends

Business values and associated multiples fluctuate over time, influenced by a variety of macroeconomic factors such as interest rates, inflation, consumer spending, and overall economic growth. For gas station businesses reported sold on BizBuySell, the average earnings multiple has increased from around 3 closer to 4 over the past five years.

Earnings Multiples

Earnings multiples represent the value of a business relative to its owner’s discretionary earnings or "cash flow". Arguably the most important valuation metric - as seller's discretionary earnings will often dictate how much a buyer is able to borrow to finance the business acquisition - most valuations will hinge on a reasonable earnings multiple.

Revenue Multiples

Revenue multiples represent the value of a business relative to its overall sales or revenue. In conjunction with an earnings analysis, revenue multiples are commonly used to value a business based on its top line sales potential.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of gas station businesses for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are almost always higher due to owners setting asking prices above what their businesses might typically sell for. This occurs either intentionally as a negotiation strategy, or incidentally due to business owners’ common tendency to overvalue their own businesses.

In the case of gas stations, current listings are asking less than previous years comps. This is likely a consequence of values being inflated in 2022 and 2023 by high volumes of private equity purchases, and now coming back down to the mean thanks to higher interest rates.

Multiples based on comparable businesses - "comps" in business broker parlance - are much more useful as they represent the prices at which businesses ultimately get sold. Business brokers and valuation professionals will always turn to local comps when pricing businesses for sale or evaluating businesses for acquisition. We provide both sets of data at the national level to offer general context.

Quartiles, Median, and Average

No two businesses are identical, and as such, valuation multiples exist in a range. We have carved out four common values within this range: Lower quartile represents the value under which the lowest 25% of valuation multiples fell. Upper quartile represents the value above which the highest 25% of multiples fell. Median is the middle of the range, and average is the mean of the set. Mean is almost always higher than the median, driven by a minority of high volume, high value businesses sold at multiples above the upper quartile.

Businesses with consistent financial performance, above average revenue and earnings, demonstrable growth potential, low owner involvement, unique competitive advantages, and a seller willing to finance will command a multiple at or above the upper quartile. Smaller businesses with thin profit margins, full-time owner involvement, and many direct competitors will trade at or below the lower quartile. Most businesses will fall somewhere in the middle.

Based on this data, half of gas stations are sold for an amount between 1.66 and 5.32 times their annual seller discretionary earnings, with 25% of exceptional, large businesses trading above this range, and 25% of the smaller, less desirable gas stations trading below.

Financial Benchmarks

To determine how a business compares in terms of revenue and earnings relative to industry peers, it’s necessary to have some insight into industry standards. "Benchmarking" describes the practice of comparing a business’s financial performance to typical industry standards to determine where a business falls relative to other businesses in the same industry. These benchmarks can help guide owners and investors towards appropriate valuation multiples from the range above.

To that end, we have aggregated gas station industry financial ranges useful for comparing an individual business to the broader industry.

Gas Station Revenue and Earnings Trends

The median revenue for gas stations has been stagnant with some volatility over the last five years, while owner earnings has grown fairly consistently. Between 2020 and 2024, median revenue of gas station businesses sold on BizBuySell declined 14% while median earnings increased 24%.

Earnings Ranges

Discretionary earnings (used interchangeably with the terms "cash flow" and seller's discretionary earnings or SDE) is often the crux of business valuations, so it is important to benchmark it relative to other gas stations traded on the business for sale market. Below you will find discretionary earnings ranges for businesses sold over the past five years, as well as recent gas station for sale listings.

Revenue Ranges

Revenue volume plays a large role in business valuation, as it measures the size of the potential income opportunity for new ownership. It's not uncommon for buyers to select an earnings multiple range based on overall revenue volume. The table below includes revenue ranges of gas stations sold over the past five years and recent gas station businesses listed for sale.

How Revenue and Earnings Level Affects Business Values

Clearly higher levels of earnings lead to higher valuations, even given the same multiple. However, valuation multiples also tend to rise with business sales volume. High traffic gas stations that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a gas station generating over $3.5MM will generally sell for an earnings multiple between 3.5 and 4, where a lower volume station with sales below $1MM may trade around 1.6-2 times earnings. Gas station businesses that also own the real estate will trade at a higher rate than those that lease.

This tendency for higher sales volumes to fetch higher valuation multiples is largely driven by the economics of business acquisition financing. Businesses with greater revenues and earnings give buyers more cushion to cover debt service obligations and still have enough left over to pay the new owner a reasonable income.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader automotive sector when benchmarking gas stations. The chart and table below includes key metrics from sales of automotive businesses on BizBuySell between 2020 and 2024.

Compared to others in the automotive sector, gas stations tend to get slightly higher valuations relative to revenue volume. The two primary factors driving up values are the higher-than-average sales volumes – which presents opportunities to upsell and cross-sell - and the low level of labor and associated wages/people management expense. Gas stations require very little labor and operational management as they are mostly self-service business models, which makes them appealing to business buyers looking for passive income with minimal employment requirements.

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