A gas station for sale can represent a very dynamic business opportunity for an entrepreneur. In this specific kind of business – more than ever before, location is absolutely everything. Even if you might have discovered what you believe to be a “rough diamond,” next to two major traffic arteries or along side a very busy intersection, it’s still unwise to “take the plunge” until you’ve performed a thorough and detailed process of due diligence.

One of the biggest mistakes that someone can make, especially if they have never operated, owned or purchased a business before, is to let their enthusiasm get the better of them. Even if you cannot believe the amount of vehicular traffic that passes the particular location you have in mind, or are worried that other purchasers could jump in before you, never be tempted to shortcut your discovery process. Ideally, you should invest no less than four weeks of your time into getting an accurate feel for what you’re getting yourself into, before you make any kind of final decision.

However, if you have found one you really like, and you’ve decided to buy gas station business with a convenience store as well, you need to ensure that you’re generally pleased with the documentation which is presented to you by the seller, and of course, you don’t notice anything in particular that’s “sticking out” which might cause red flags to appear, then you should inform the seller that you’d like to have an observational period to give you the opportunity to find out whether or not you’d like to buy.

During your observation period, you will be able to analyze the actual operation of the gas station and convenience store and get a very good idea whether the financials that you have been given represent an actual or a contrived position. If you happen to be inheriting members of staff, you’ll have the opportunity to see how well they do their jobs and how useful they are at maintaining your profits. This is infinitely better than talking with them for about a half hour and asking them random questions. Above all else, this observational period will provide you with the opportunity to figure out a number of ideas which you could ideally put in place following your purchase to maximize future revenues and profits.

Get ready to check all the following items during your due diligence work:

• The financial records, profit and loss statements, balance sheets, tax returns, and registers.

• The inventory records, being on the lookout for discrepancies.

• The employee records – watch to see that they are well-maintained, all legal elements are covered and the liabilities are unearthed.

• All equipment should be inventoried and maintenance records checked. Is a process of regular maintenance scheduled?

• Review all supplier contracts and attempt to contact the major suppliers. Are there any clauses which cause renegotiation following a sale – if so, you will need to be sure that you are covered before you proceed any further.

• A business such as this can be heavily regulated. You do not want to purchase gas station business problems caused by their failure to keep up with inspections or any citations issued due to irregularities.

Important: Get environmental reports and be certain the business is in full compliance. Have your attorney check for any prior infractions. Make sure all tanks meet the latest standards, and proposed ones. If not you may face an enormous expense soon after taking over, not to mention the lost business from closing down to make these adjustments.

If you are generally happy with the paperwork, use your observation period to do just that – observe. Keep your eyes and ears open at all times and see what makes this business “tick.” Make a note of anything, however small, that you think might have grounds for improvement and while you should not live and breathe at the location for the entire period of time, you should nevertheless aim to be there during strategic moments – during opening, during major deliveries, during rush periods, during slow periods, during closing.

It isn’t advisable to cut short your observation period, as time spent now could represent a wise investment in your time.

Richard Parker is the author of the How to Buy a Good Business at a Great Price series. As President and founder of Diomo Corporation – The Business Buyer Resource Center, his materials, seminars and consulting have helped thousands of business buyers realize their dream to buy a business.