How I Built 3 Gas Stations Before 30: The Inside Truth | Kristofer Danielson DSH #1083

Summary

Digital Social Hour: How I Built 3 Gas Stations Before 30: The Inside Truth | Kristofer Danielson DSH #1083

Release Date: January 10, 2025

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Introduction

In episode #1083 of Digital Social Hour, host Sean Kelly sits down with Kristofer Danielson, a remarkable 26-year-old entrepreneur who has successfully built and currently manages three gas stations, generating an impressive annual revenue of $30 million—projected to exceed $40 million this year. Kristofer's journey from a business student to a thriving gas station mogul offers insightful lessons on entrepreneurship, strategic business operations, and navigating the competitive landscape of the gas station industry.

Kristofer's Background and Entry into the Gas Station Industry

Kristofer's entrepreneurial spirit emerged during his final year at Algonquin College, where he was pursuing a degree in Business Administration. While working for the Canadian federal government, he sought an alternative path that diverged from his desk job. His inspiration struck when he observed the success of his great uncle's gas station on the Fort William First Nation Reserve.

Kristofer [03:24]: "There's a lot of gas stations on Fort William, I seen. And there is a prime real estate piece of property. And when I inquired sort of who, who owned it, it was actually my great uncle."

Recognizing the significant advantage of operating on a reserve—namely, the absence of sales tax which typically stands at 13% in Ontario—Kristofer saw an opportunity to offer lower gas prices, attracting a high volume of customers. With an initial investment of $25,000 from savings accrued during his government job, he acquired land and launched his first gas station in 2020.

Business Model and Operations

Operating gas stations in Canada presents unique challenges and opportunities, particularly on reserves where tax advantages play a crucial role. While gas margins are notoriously thin—often around five cents per liter—the true profitability lies in the convenience store aspect of the business.

Kristofer [05:58]: "And specifically on the cigarettes, really that's the highest margin item."

Kristofer emphasizes that high-margin products like cigarettes, vapes, and other convenience items drive the majority of the profit. By maintaining competitive fuel prices, his stations attract a steady stream of customers, thereby increasing in-store sales. This dual-revenue model ensures sustainability even when fuel prices fluctuate.

Growth and Scaling Strategy

Kristofer's strategy for scaling involves meticulous location selection and market consolidation. Owning half of the gas stations on the Fort William reserve—three out of six—has established a dominant market presence, preventing competitors from undercutting prices and ensuring customer loyalty.

Kristofer [25:58]: "There's six gas stations on the reserve, so I have three of them."

His approach focuses on acquiring one new gas station per year, prioritizing locations that offer similar tax benefits and market conditions. By expanding within favorable markets, Kristofer ensures that each new acquisition complements his existing operations, facilitating seamless growth and increased revenue streams.

Challenges and Solutions

Entering the gas station industry is capital-intensive, with high initial investments and ongoing operational costs. Kristofer faced significant challenges, particularly in securing financing due to restrictions imposed by the Indian Act, which limits traditional banking options on reserves.

Kristofer [12:35]: "There's a lot of trucks in Canada."

To overcome these hurdles, Kristofer turned to private lenders who trusted his business acumen and vision. This alternative funding approach enabled him to invest in necessary infrastructure, such as gas pumps and store enhancements, without relying on conventional financial institutions.

Financial Insights and Strategies

Kristofer adopts a straightforward financial strategy when acquiring new gas stations, valuing businesses at two to three times their net income rather than relying on more complex metrics like EBITDA.

Kristofer [28:29]: "I like to purchase a business for like two or three times their earnings."

Focusing on net income allows Kristofer to quickly assess profitability and ensures that each acquisition aligns with his return on investment goals. This pragmatic approach contrasts with the often overinflated valuations seen in stock markets, where returns may take years to materialize.

Personal Entrepreneurial Journey and Influences

Kristofer's entrepreneurial journey began early, selling candy in grade five and later engaging in online affiliate sales during his teenage years. Influenced by his father's entrepreneurial endeavors—such as selling books on Amazon—Kristofer cultivated a strong business mindset from a young age.

Kristofer [17:07]: "I've been doing this a long time."

These early experiences laid the foundation for his later success, providing him with the skills and confidence necessary to navigate the complexities of running a multi-million-dollar business.

Future Plans and Perspectives

While primarily focused on expanding within Canada, Kristofer remains open to opportunities in the United States, though he recognizes the distinct differences between the Canadian and U.S. markets.

Kristofer [14:18]: "I don't think acquired because like I've thought about that before and it's like, you know, I'm 26 and then what am I going to do after?"

Kristofer is not currently considering selling his businesses to major gas companies, preferring instead to maintain control and continue innovating within the industry. His hands-on approach, including occasionally pumping gas himself, keeps him connected to his business operations and allows him to stay attuned to customer needs and market trends.

Conclusion

Kristofer Danielson's story, as shared on Digital Social Hour, is a compelling example of how strategic thinking, leveraging unique market advantages, and an unwavering entrepreneurial spirit can lead to remarkable success in a competitive industry. By focusing on high-margin store sales, maintaining competitive fuel prices, and carefully selecting prime locations, Kristofer has built a thriving business empire in the gas station sector by the age of 26. His insights provide invaluable lessons for aspiring entrepreneurs aiming to achieve similar heights in their ventures.

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For more insights and updates from Kristofer Danielson, you can follow him on Twitter and Instagram.

Transcript

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[Christopher]

Just acquired my third gas station.

[Host of Digital Social Hour]

Nice.

[Christopher]

On the reserve.

[Host of Digital Social Hour]

So. And you were doing 30 million a year?

[Christopher]

Yeah.

[Host of Digital Social Hour]

In revenue.

[Christopher]

Yeah. That was last year.

[Host of Digital Social Hour]

So you're going to do even more this year?

[Christopher]

Yeah, it'll. It'll be, it'll be probably closer to.

[Host of Digital Social Hour]

40 or more than 40. You're only 26 years old.

[Christopher]

Yeah.

[Host of Digital Social Hour]

That's insane, man. 40 million a year at 26. Well done.

[Christopher]

Yeah. Thank you.

[Host of Digital Social Hour]

All right guys, Digital social hour. Here with Christopher, we're going to talk the gas station industry. Thanks for coming on, man.

[Christopher]

Welcome.

[Host of Digital Social Hour]

Absolutely. So how did you stumble across getting into gas stations?

[Christopher]

So I started in 2020. My ass. My first gas station. It was actually a convenience store to start. So I was basically in Ottawa in Canada, which is the capital at the time. I was in business school for business administration at Algonquin College. And you know, I was in my last year I was thinking about like, what to do next, what my big move is. And I was working for the federal government of, of Canada at the time. And, you know, I was. I moved up pretty quickly in my two years there. And it was good. I enjoyed it. It was just, you know, one day I was just kind of taking my lunch and I was looking out outside from the skyscraper and I was like, you know, maybe this isn't something that I want to do for the rest of my life because, like, I sort of seen the progressions in the government. Like, you know, you become basically a senior, senior team lead, then a manager, director, and then you can become an executive as well in the government. And I sort of seen that pathway and I wanted to at least try and do something else while I was young, because I was. I was 19 at the time. You know, you hear big entrepreneurs all the time say, do it while you're young. So I was like, yeah, why not? And so I first came of the idea, actually. So I'm from Thunder Bay, Ontario. That's where I was born and raised. And I am First Nation as well. And I'm a part of a reserve, Fort William, First Nation in Canada. I know in the US you guys call it like an Indian reservation. Yeah, it's the same thing.

[Host of Digital Social Hour]

Okay.

[Christopher]

We just call it reserves in Canada, but yeah. So, you know, there's a lot of gas stations on Fort William, I seen. And there is a prime real estate piece of property. And when I inquired sort of who, who owned it, it was actually my great uncle.

[Host of Digital Social Hour]

But wow.

[Christopher]

Who had a gas station there in the 90s before. And you know, it. It didn't really work out for him just. Just due to personal reasons. But I acquired that piece of land off of them. And it was basically all my money at the time. I believe it was like 25,000. I saved up in the government and just working various jobs, you know, did other things as well. But then I seen like, there's massive gas stations on my reserve because there's no sales tax. Like, we don't have to pay the sales tax on the fuel. So that's why it's significantly lower fuel cost on the reserve as opposed to in town. So there's 13 tax in Canada in. In Ontario. It varies from province to province, but 13% in Ontario. So on average, you know, we can be lower like 30 to 50 cents a liter sometimes than in town. So if you extend that offer to an entire city, especially for something like a commodity like gas, you know, everyone will take you up on that offer. And the entire city of Thunder Bay comes out. Basically, we turned the entire city around in seven days. So wow. It's quite, quite large the, the market out there. So I seen the market and I was like, you know, I could probably do this too. It doesn't seem, it doesn't seem impossible to start a gas station. So I sort of just went out on my own. This was before the time of chat gbt. So like, you know, you really had to dig deep on Google how to start a gas station and like there's really not, there's. Even today there's not a whole lot on gas stations on the Internet like how you can even start them, how you go about doing it. So I had to learn just brick by brick. I started just contacting big fuel suppliers that, that I could find in the area and started talking with them about it. Basically I was 19 at the time and I was just kind of learning. But you know, in my mind, from my perspective, it just didn't seem all that impossible to sell gas and smoke. So. Yeah, and that's pretty much what gas stations do. They do make most of the profit inside the store.

[Host of Digital Social Hour]

I heard that. So that's true.

[Christopher]

It is true, yes.

[Host of Digital Social Hour]

Okay.

[Christopher]

And specifically on the cigarettes, really that's.

[Host of Digital Social Hour]

The highest margin item?

[Christopher]

Yes, cigarettes, chew, Zinn vapes, all that's the highest margin stuff. And then if you love your phone.

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[Host of Digital Social Hour]

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[Christopher]

Sell, but cigarettes is the main, main profit.

[Host of Digital Social Hour]

Interesting. Yeah, because the gas prices are regulated, right. So you can't charge whatever you want for the gas.

[Christopher]

They, I don't think they are.

[Host of Digital Social Hour]

Oh, they're not?

[Christopher]

No.

[Host of Digital Social Hour]

Oh, maybe that's a Canadian thing or something.

[Christopher]

Yeah.

[Host of Digital Social Hour]

Because in the US I thought they were.

[Christopher]

Yeah, I've looked into it. In the US you can't price your fuel below cost here, I think.

[Host of Digital Social Hour]

Got it. So in Canada that's not a thing.

[Christopher]

No, that's not really a thing.

[Host of Digital Social Hour]

Oh, okay. But you still got to be competitive because if you're way too expensive and.

[Christopher]

Everyone'S pretty much buying, it's called at the wholesale rack price. So like everyone's buying at the same price. So all it takes is one person to lower the price and then everyone's in a gas war. But that happens quite frequently. So that's why you got to have a good, a good store and not rely on, on gas.

[Host of Digital Social Hour]

So if you had a gas station without a store, would it survive?

[Christopher]

It is possible. Those are usually called truck stops. They, you usually only see them on the, on the highways. But it really, I've only really ever seen it with truck stops.

[Host of Digital Social Hour]

Yeah. Because they're in the middle of nowhere. So finding someone to work there.

[Christopher]

Yeah.

[Host of Digital Social Hour]

Gonna be pretty difficult. Yeah, that makes sense. But. Nah, well done, man. And you've scaled this to three locations now, right?

[Christopher]

Yep. Recently I just acquired my third gas station.

[Host of Digital Social Hour]

Nice.

[Christopher]

On the reserve.

[Host of Digital Social Hour]

So. So. And you were doing 30 million a year.

[Christopher]

Yeah.

[Host of Digital Social Hour]

In revenue.

[Christopher]

Yeah. That was last year.

[Host of Digital Social Hour]

So you're going to do even more this year.

[Christopher]

Yeah, it'll, it'll be, it'll be probably closer to 40 or more than 40.

[Host of Digital Social Hour]

Only 26 years old.

[Christopher]

Yeah.

[Host of Digital Social Hour]

That's insane, man. 40 million a year at 26. Well done. Yeah, thank you saw, you just went on Tai Lopez's show as well?

[Christopher]

Yeah, yeah, Tai Lopez, he wanted to know part of like a, a private client program with him. And you know, I was talking on the phone with them and he was like, hey, why don't you come on my podcast and explain all this? And yeah, he's been, he's been a pretty good mentor of mine. He's pretty smart, sometimes helps, helps me negotiate deals and nice. Like he's very, he's a good negotiator. Ty Lopez.

[Host of Digital Social Hour]

Yes, for sure. Yeah, Shout out to Ty. He's been on the show and it's cool to see him have this impact in Canada too, because I know he's big in the US Obviously, but.

[Christopher]

Yeah.

[Host of Digital Social Hour]

So you were watching his courses growing up?

[Christopher]

Yeah, I think I seen his garage video.

[Host of Digital Social Hour]

Classic. You could not see that. I mean that was every friggin YouTube ad.

[Christopher]

If you're on YouTube in like 2015.

[Host of Digital Social Hour]

Bro, I used to get so pissed because BY like the 20th time you're like, oh my God. Yeah, yeah, 20th time you see that ad, you're like, stop it please. Like, give me some ad block. That was before ad block even existed, I think. So you couldn't even skip it. So what's the goal with this? You trying to scale locations?

[Christopher]

Yeah, pretty much right now. Just trying to acquire more gas stations or even start more gas stations. Yeah, that's basically the goal. Just acquire maybe one a year right now. That's what I'm averaging.

[Host of Digital Social Hour]

Nice.

[Christopher]

I like going after really good sites. I don't like going after really sites that are too, too small. So I like, I like acquiring gas stations on reserves in Canada as well. Just because there is a, there's an income tax advantage as well. Sales tax advantage.

[Host of Digital Social Hour]

Because you don't get taxed on that, right?

[Christopher]

Well, yes and no. There are, there are some taxes. So we still have to pay 10 cents a liter to the federal government and 14.7 cents a liter to, to the province of Ontario.

[Host of Digital Social Hour]

Got it.

[Christopher]

And then there's also a carbon tax as well. Believe that's like it goes up substantially every year. It's like 17.

[Host of Digital Social Hour]

Holy crap.

[Christopher]

17 cents. I mean.

[Host of Digital Social Hour]

Yeah, yeah, I know, that's crazy. So you're paying almost 60 cents just in tax.

[Christopher]

It's, it's about 30, 33 cents.

[Host of Digital Social Hour]

Oh, 33.

[Christopher]

Just pretty much straight to the government.

[Host of Digital Social Hour]

Okay.

[Christopher]

And that's still on the reserve as well. But the income tax advantage is like the main, the main advantage. If. So if your business is situated on a reserve under the Indian Act, I believe it's section 80. 87. Used to be 86, I think. Yeah. There's a. If you produce income on reserve, it's basically tax free.

[Host of Digital Social Hour]

Nice. Yeah, they have that in the U.S. too.

[Christopher]

Yeah.

[Host of Digital Social Hour]

That gives you a huge advantage, I feel like, you know.

[Christopher]

Yeah, it does. Yeah. There's some advantages and disadvantages especially, you know, with especially financing things. So. Like the way the Indian act is constructed, basically that's why you see all reserves pretty much on American and Canadian soil. They're all like, you know, super ghetto. They're, they're like, you know, there's like.

[Host of Digital Social Hour]

Shacks everywhere because they can't finance.

[Christopher]

There's. You can't finance.

[Host of Digital Social Hour]

No. Oh, so you can't use a bank?

[Christopher]

No. And. And it's written that way because it's like you can't use a bank, basically. So what I had to do, in short, is basically find private lenders that just trusted me pretty much.

[Host of Digital Social Hour]

Wow, that is difficult because I could just go to a bank, get a $50,000 credit card right now, 0% interest for the first year.

[Christopher]

And that's what I seen. I seen the opportunity and I knew that there were challenges to actually start a gas station especially they're super capital expenditure heavy. So. So it could cost like millions of dollars for one gas station.

[Host of Digital Social Hour]

Damn.

[Christopher]

To build, you know, just one and I have three. So I had to go out and find financing.

[Host of Digital Social Hour]

Basically. I could see why people don't get into it. Because it's a high risk, high reward, right?

[Christopher]

Yeah, yeah.

[Host of Digital Social Hour]

Or high risk. And the margins are thin. So I don't even know if that's high reward. Yeah.

[Christopher]

You know, you say 40 million, but you know, we're making like low single percentage profit margins on that.

[Host of Digital Social Hour]

So it's a volume game then.

[Christopher]

It definitely is, yeah. Volume, yeah.

[Host of Digital Social Hour]

Because if you have 10 of those, you know, 400 million, make like 10 million a year, 20 million, whatever.

[Christopher]

Yeah, yeah.

[Host of Digital Social Hour]

That's pretty good.

[Christopher]

Yeah.

[Host of Digital Social Hour]

Now the biggest brands, like, they must have hundreds of locations because I see them everywhere in the us Is that like that in Canada?

[Christopher]

Yeah, there's lots of Circle K's in Canada. Big cities, you'll see Ultramars. Other than that, you know, big, big gas stations are like Esso in Canada. Like I know in here in the US it's bp, it's Chevron.

[Host of Digital Social Hour]

See Chevron every corner.

[Christopher]

Yeah, yeah. It's sort of the same thing though. It's all just owned by one or two major gas companies.

[Host of Digital Social Hour]

So is your long term goal to get acquired by one of them.

[Christopher]

I don't, I don't think acquired because like I've thought about that before and it's like, you know, I'm 26 and then what am I going to do after? Like sitting, sitting around on a beach, you know, sounds cool, but I don't think it actually translates well into anyone's life doing that long term.

[Host of Digital Social Hour]

You would have a. You would need another plan after. Yeah. You would go crazy if you just got all that money at 28 or whatever and then.

[Christopher]

Yeah.

[Host of Digital Social Hour]

Sat around for 40 years.

[Christopher]

Yeah. And I like doing what I'm doing as well. It's like every day is fun.

[Host of Digital Social Hour]

That's cool.

[Christopher]

Every day when I wake up, you know, I have my coffee 15 minutes and then once I look at my phone, it's like pretty much blown up. Every day.

[Host of Digital Social Hour]

Yeah.

[Christopher]

There's always a really, there's always a new situation.

[Host of Digital Social Hour]

Running a gas station, who would have thought there'd be a situation there?

[Christopher]

There's always an employee issue.

[Host of Digital Social Hour]

There's always like, yeah, do you have to pump your own in Canada? Pump your own gas?

[Christopher]

Well, you don't have to. I have both self serve and full serve. Got it on my reserve. Most all of them actually are full serve and then the ones in town are self serve.

[Host of Digital Social Hour]

Okay. Yes. Where I grew up in the US is the only state left that does full service.

[Christopher]

New Jersey.

[Host of Digital Social Hour]

New Jersey, yeah.

[Christopher]

I've looked into that. It's kind of sort of weird how it has to be like that, but I'm not even sure why. Maybe environmentally, but no idea why they.

[Host of Digital Social Hour]

Do it, but I wasn't complaining. Those winters are cold, man. So not having to get out of the car was clutch.

[Christopher]

Yeah.

[Host of Digital Social Hour]

I'd be sure to tip them, but yeah, you're not even like supposed to or whatever. But yeah, I want to be nice.

[Christopher]

Yeah. Yeah. I definitely put in a lot of time pumping gas myself.

[Host of Digital Social Hour]

Oh yeah?

[Christopher]

Yeah.

[Host of Digital Social Hour]

Damn. Were you pumping it at first when you first bought the place?

[Christopher]

Oh yeah. So we started and it was actually an out of construction trailer. Like it was literally like just a shack and we had pumps and we went on Craigslist, which is basically Kijiji we call it in Canada.

[Host of Digital Social Hour]

Yeah.

[Christopher]

And I bought two used gas pumps for a thousand dollars. We didn't even know if they would work or not because like we were working with limited resources to start. And so we went, we went like drove all the way to, I believe it was Niagara Falls, which is about a 16 hour drive from Thunder Bay with a U Haul and My business partner, Ziad, went down there and picked them up and came. Came back and turned out they did work and that was sort of the start of our gas station.

[Host of Digital Social Hour]

Wow. Humble beginnings, man.

[Christopher]

Yeah, just kind of just.

[Host of Digital Social Hour]

You've come a long way from your government desk job.

[Christopher]

Yeah, yeah.

[Host of Digital Social Hour]

That is crazy. Yeah. I think you're living a more fun and fulfilling life with that route you've chosen.

[Christopher]

Yeah, definitely. I've always wanted to be, you know, doing something in the entrepreneurial space. I've always been interested in that even since I was a kid. I sort of, you know, heard even you, like, sold Pokemon cards.

[Host of Digital Social Hour]

I did, yeah.

[Christopher]

And like candy and whatnot. That's pretty much what I did.

[Host of Digital Social Hour]

Oh, yeah?

[Christopher]

Yeah.

[Host of Digital Social Hour]

I love.

[Christopher]

I was in grade five selling candy.

[Host of Digital Social Hour]

Let's go.

[Christopher]

So, like, I've. I've been doing this a long time.

[Host of Digital Social Hour]

Yeah, I think it's definitely genetic and like, environment.

[Christopher]

Yeah, Influence. Yeah, exactly. Environment and a bit of genetics as well.

[Host of Digital Social Hour]

Yeah. Were your parents entrepreneurial?

[Christopher]

Yeah, my dad has had a few. A few businesses as well. Pretty entrepreneurial.

[Host of Digital Social Hour]

Same. Yeah, he definitely inspired me. He sold books on Amazon.

[Christopher]

Oh, nice.

[Host of Digital Social Hour]

Yeah, he had a 9 to 5 job, but he definitely had an entrepreneur side to him.

[Christopher]

Yeah.

[Host of Digital Social Hour]

So I saw how excited he was going to book sales and things like that.

[Christopher]

And then even when I was a teenager, I was doing, like, online affiliate sales. You know, I was making a couple of grand a month doing that. It was pretty. I was pretty blown away when I first was like 16, 15 years old, making, like, even a couple grand off the Internet.

[Host of Digital Social Hour]

Like, that's a lot at that age.

[Christopher]

Yeah. It didn't seem like. It didn't seem very, very real when it first started, but, you know, I got good at that. And then it sort of like ended the algorithm, I guess, and I had to find something new, so I just went to college and. And then had my gas station idea, basically.

[Host of Digital Social Hour]

Yeah. Did you graduate college?

[Christopher]

So I went to Algonquin College for Business Administration. Three years. I was in the finance program and actually in my last semester, I had this opportunity to start my gas station. So I was like, you know, maybe let's just put this on pause. I only have one semester left and, you know, I'll give it maybe a year, see what I can do, and I'll give it my all for one year. And so I did that and it ended up working out. So I had to leave college to start my gas station. But, you know, I think it. It paid off pretty well these days.

[Host of Digital Social Hour]

I don't think you need a. In business.

[Christopher]

Yeah.

[Host of Digital Social Hour]

College degree.

[Christopher]

Yeah, it's not, it's not needed. Although I would say you do need to have an understanding of accounting if you're going to start a business.

[Host of Digital Social Hour]

Yeah.

[Christopher]

It's like, you know, your accountant can show you a financial statement and if you don't know the like, if you don't know what net income or gross profit is, you're gonna have like a really difficult time scaling and growing.

[Host of Digital Social Hour]

Agreed. Yeah. You need to know the basics. Plus you're probably doing the accounting at first because you can't even afford accountants. Yeah, I was doing mine at first too. So you got to know the basics for sure.

[Christopher]

Yeah.

[Host of Digital Social Hour]

And taxes. You got to know taxes. Yeah, they don't teach that in school.

[Christopher]

Yeah.

[Host of Digital Social Hour]

Oh man. My first year. That one hurt.

[Christopher]

Yeah, I've heard that from a lot of first time small business owners. Like they don't know the. How to structure the tax.

[Host of Digital Social Hour]

Absolutely. Were you prepared that first year?

[Christopher]

I think I was, yeah. Like I was pretty, pretty organized the first year. But I would say the most challenging was actually doing the work itself is like we couldn't really afford too many employees at the time.

[Host of Digital Social Hour]

Yeah.

[Christopher]

And me and my business partners, he had basically just had to work 16 hours a day every day for about a year and a half straight.

[Host of Digital Social Hour]

Damn.

[Christopher]

Almost two years.

[Host of Digital Social Hour]

And that's physical work. That's you on site. Not even just like sitting on a desk type work.

[Christopher]

So. Yeah. And that's like negative 40 below in the wintertime. Holy crap.

[Host of Digital Social Hour]

That is nuts when you put it that way. It gets that cold up there. Negative 40.

[Christopher]

Yeah. Actually our first winter was like, our first winter in business was like the coldest winter in a long time.

[Host of Digital Social Hour]

Oh my gosh. Talk about timing.

[Christopher]

Yeah.

[Host of Digital Social Hour]

Does gas even freeze? How does that work?

[Christopher]

No, gas doesn't. I mean it technically could, but the, the fuel in Canada is like made so it doesn't freeze like that. If you have super high ethanol like in South America, I believe it's like 50% ethanol inside of the fuel. It could freeze. Technically, I guess, but the fuel that they sell in Canada, like it, it doesn't freeze.

[Host of Digital Social Hour]

Interesting. What's your top seller? Gas. Is it the regular? Premium diesel, Is it like.

[Christopher]

Yeah, it's definitely regular.

[Host of Digital Social Hour]

Regular.

[Christopher]

Regular is about 80% of fuel sales.

[Host of Digital Social Hour]

Wow.

[Christopher]

Premium is about 10% and mid grade diesel and mark diesel is about the rest of the 10. The last 10% dangles like 2% marked. Diesel's like 2% as well.

[Host of Digital Social Hour]

That's crazy. Regular is 80. So 80, 20 rule.

[Christopher]

Yep.

[Host of Digital Social Hour]

Interesting. It makes sense though, because most cars run on regular.

[Christopher]

Yeah, most do. Yeah.

[Host of Digital Social Hour]

Yeah, that makes a lot of sense. Do you think prices are going to keep going up for gas?

[Christopher]

You know, I'm not really sure about the macro economics of. Of gas, you know, because. And also it doesn't really matter for me because my margin stays the same. So whether gas is like $5 a liter or it's a dollar a liter.

[Host of Digital Social Hour]

Like, I'm still making you make the same amount.

[Christopher]

Yeah.

[Host of Digital Social Hour]

Wow.

[Christopher]

Basically like five cents a. Literally.

[Host of Digital Social Hour]

Oh, that's all you're making?

[Christopher]

Yeah.

[Host of Digital Social Hour]

Holy cow.

[Christopher]

It's so competitive. Like any. Any one gas station could just collapse the margins to zero.

[Host of Digital Social Hour]

Yeah. Five cents is nothing.

[Christopher]

Yeah.

[Host of Digital Social Hour]

I mean, on one customer you're making 20, what, like 2 bucks?

[Christopher]

There's a lot of trucks in Canada.

[Host of Digital Social Hour]

Oh, okay. So trucks. Yeah.

[Christopher]

But yeah, there's like, you know, on a small car.

[Host of Digital Social Hour]

Yeah, like, that's nice. People don't think about that when they're buying gas because you see a lot of pissed off people on social media talking about gas prices. Yeah, but you're only making two to three bucks off them.

[Christopher]

Yeah. And that's why in the gas station world, you need volume. You could have a highway location. I've seen where they charge like 40, 50 cents a liter, but, you know, that's like pretty rare to find.

[Host of Digital Social Hour]

Yeah.

[Christopher]

Because you would need basically a monopoly in that whole area to charge that.

[Host of Digital Social Hour]

40 cents a liter. Holy.

[Christopher]

Usually you only see that on highways and the middle of nowhere, though.

[Host of Digital Social Hour]

Dude, I've never seen that. I haven't seen gas under $2 a liter and.

[Christopher]

Oh, sorry. But I went. What I meant by that was like, they make 40 cents.

[Host of Digital Social Hour]

Oh, they.

[Christopher]

Okay, they just raised the price.

[Host of Digital Social Hour]

Got it, got it.

[Christopher]

Making 40 cents.

[Host of Digital Social Hour]

But they'd have to be in the middle of nowhere.

[Christopher]

Yeah. Most gas stations are only doing like 5 cents.

[Host of Digital Social Hour]

Okay, so the location matters a lot then.

[Christopher]

It does. Yeah.

[Host of Digital Social Hour]

So you don't want to cheap out on that.

[Christopher]

Yeah, you definitely need a good offer. If you don't have a good location. That's another thing. I look for location first it's got to be a decent location. And then after that, we kind of analyze how much fuel we think we're going to go through. And then once you have basically an estimate on your fuel, then you can estimate your store sales, which are going to drive most of your profit for gas stations.

[Host of Digital Social Hour]

Got it.

[Christopher]

That's sort of how I look at it.

[Host of Digital Social Hour]

So what percentage of your sales are from the store versus the Gasoline.

[Christopher]

You know, I've talked with a lot of gas station owners about this. Some say it's like 25%. Some say it's like 33% store sales, 25 store sales, and then the rest fuel sales. But it really depends, like on the location and how you do your. How you, how you do an offer. Like. But yeah, I would say it's generally like 25, maybe 30%.

[Host of Digital Social Hour]

Wow.

[Christopher]

Our in store sales. And then the rest of your revenue comes from fuel.

[Host of Digital Social Hour]

Interesting. And that's revenue. But you said a majority of the profit is from the store, so.

[Christopher]

Yeah, it is true. Yes.

[Host of Digital Social Hour]

That is an interesting business model, man. Yeah, I never thought about it like this, but I don't think it's a business I want to get into. Because you're spending six, seven figures to make five, 10%.

[Christopher]

Yeah, yeah. It's a pretty heavy capital expenditure business. But like, if you have a competitive advantage, basically, like I do, it's definitely worth doing.

[Host of Digital Social Hour]

Right.

[Christopher]

Because I've even heard Warren Buffett say, like, he doesn't like gas stations because of the reason that you said, because it's like, it's very capital intensive and you make super low margins. And I've also heard Buffett say, like, BO gas stations, you know, they, your competitor can just lower the price and then take all your customers because the.

[Host of Digital Social Hour]

Prices change every day, right?

[Christopher]

They do, yeah.

[Host of Digital Social Hour]

Yeah. That's like the one industry I've seen where like, every day it's a new price, so you got to be on top of it.

[Christopher]

Yeah. So I have a nice moat and competitive advantage with my gas stations. Basically, they're always going to be lower. So. And it's a commodity. Like, nobody cares that you're paying less for gas. Like, they would rather pay less because it's like, it's the same gas that you would get in town. It's just cheaper.

[Host of Digital Social Hour]

Yeah, yeah. No one cares. It's the same quality. Right.

[Christopher]

So, yeah, and it's very close to the reserve, too, to Thunder Bay. It's like just across the bridge.

[Host of Digital Social Hour]

Nice. So you're getting hundreds of cars a day.

[Christopher]

Thousands. Yeah.

[Host of Digital Social Hour]

Thousands, yeah. Wow.

[Christopher]

Yeah.

[Host of Digital Social Hour]

Okay, I can see why you're doing 30 million a year now.

[Christopher]

Yeah. The whole, the whole reserve is basically, I don't know, like, 15,000. I think I seen the city of Thunder Bay, the traffic report, like 14, 15,000 cars a day.

[Host of Digital Social Hour]

Damn. So you're getting about like 7% of those to stopping for gas every day.

[Christopher]

Yeah, well, more. More now that we have the three gas stations.

[Host of Digital Social Hour]

Oh, okay.

[Christopher]

There's six gas stations on the reserve, so I have three of them.

[Host of Digital Social Hour]

Wow. You own half of them.

[Christopher]

Yep. Yeah.

[Host of Digital Social Hour]

So is your goal to get the other half?

[Christopher]

I think I'm going to take a break from, from that for now. It's just too. I think I'm going to focus on other markets because you know, when you sometimes like, you know, it's like you already have basically like 90% but you know, is that last 10 really worth the. Really worth all the work and everything, so. I don't think so.

[Host of Digital Social Hour]

Got it.

[Christopher]

Yeah, I think I'm pretty happy where I am in my current market. So that's why I'm kind of looking at new markets now.

[Host of Digital Social Hour]

That's cool though. You sound like you built yourself to a point where some of this stuff's like passive almost.

[Christopher]

Yeah.

[Host of Digital Social Hour]

Like have you exited, like have you separated yourself from the business now, the.

[Christopher]

Day to day operations? Yeah, like not really pumping gas anymore, like out of a necessity.

[Host of Digital Social Hour]

Yeah.

[Christopher]

You like pumping gas from time to time.

[Host of Digital Social Hour]

It's relaxing, right?

[Christopher]

Yeah, it is. It actually is relaxing. Yeah. Sometimes I just like shut my phone off, go outside, pump some gas.

[Host of Digital Social Hour]

Just for fun.

[Christopher]

Yeah, sometimes.

[Host of Digital Social Hour]

That's funny, dude. It is like when you're driving for hours and you stop for like a gas pump, it's like definitely refreshing though.

[Christopher]

Yeah. And I like to sharpen my skills out at the pump.

[Host of Digital Social Hour]

Yeah.

[Christopher]

My business partner, the ad, we always kind of joke or you know, you, you gotta really become one with the pump.

[Host of Digital Social Hour]

You could do it from a distance.

[Christopher]

No, like, I sort of mean that metaphorically. Like you gotta like, you know, become one with the pump.

[Host of Digital Social Hour]

Like that's funny, man. How many partners you got in this thing?

[Christopher]

Just one.

[Host of Digital Social Hour]

Okay. 50, 50 partnership?

[Christopher]

No, I, I have the majority of it.

[Host of Digital Social Hour]

Smart.

[Christopher]

You know, I met the, at my business partner in Ottawa when I was going to school. And you know, we're both entrepreneurial. We both wanted to start a business. He actually had a business at the time doing intel comm deliveries.

[Host of Digital Social Hour]

Sounds fun.

[Christopher]

Contracts with them. And then, you know, I was sort of like, you know, how about let's just do, do my gas station instead. And you know, he moved to Thunder Bay and we basically got going.

[Host of Digital Social Hour]

You said you were looking into the US Markets earlier.

[Christopher]

Yeah, I've, I've looked into it. It's very different though. It's kind of like the NFL and the cfl. It's the same sport, it's just like all different rules.

[Host of Digital Social Hour]

Right.

[Christopher]

So I think I'm gonna stick to Canada for now. But you know, that's not, not out of the picture.

[Host of Digital Social Hour]

Okay.

[Christopher]

If a good opportunity came up in the States.

[Host of Digital Social Hour]

So when you're buying these or when you're seeing them for sale, what kind of multiple are these selling for?

[Christopher]

Yeah, like basically I like to purchase a business for like two or three times their earnings. So their ebitda, well, their net income, usually not really ebitda because just for, you know, other purposes, like I really just care about how much money actually am I going to profit from this business? Not sort of all the other high end, fancy accounting terms. Basically at the end of the day, all you got to care about is how much money can I get out of this business.

[Host of Digital Social Hour]

Fair enough. They try to over complicate that thing.

[Christopher]

Yeah, yeah, they really do try.

[Host of Digital Social Hour]

I was never a fan of ebitda.

[Christopher]

Yeah, yeah.

[Host of Digital Social Hour]

Like even just explaining it to someone is a process.

[Christopher]

Yep, yep.

[Host of Digital Social Hour]

Like, yeah, they should just be profit, right?

[Christopher]

Yeah. I like looking at the net income. So like basically if I buy one, I want to make it back like in a few years.

[Host of Digital Social Hour]

Okay.

[Christopher]

Two or three years, ideally. Maybe, maybe a bit longer if it's like a larger gas station.

[Host of Digital Social Hour]

Yeah, you got good patience, man. Because a lot of people these days want their money back right away.

[Christopher]

Yeah.

[Host of Digital Social Hour]

You know.

[Christopher]

Yeah.

[Host of Digital Social Hour]

But you could wait a couple of years.

[Christopher]

Yeah. And that's still a pretty good return. Like, you know, like if you buy a stock on the stock market, on average, I think most of them on the Dow are trading for like 15 times earnings. So if you bought the whole business, you would have to wait like 15 years just to break even. Whereas if you buy a small business like a gas station, you can make your money back in two to three years.

[Host of Digital Social Hour]

Wow. When you put it that way, that's, that's interesting perspective because people don't think that way with stocks.

[Christopher]

Yeah.

[Host of Digital Social Hour]

They think they're making money back quick.

[Christopher]

Yeah.

[Host of Digital Social Hour]

No, you're saying 15 years. Yeah. Because they are overinflated, right?

[Christopher]

Yeah.

[Host of Digital Social Hour]

By the time they're on the stock market. Yeah, yeah, that's a good, good little technique. What about crypto? You get any of that?

[Christopher]

I think I got like a few hundred dollars in bitcoin, But I don't really focus too much on crypto.

[Host of Digital Social Hour]

So you go all in in business?

[Christopher]

Yeah, I think I got on my Coinbase account like a few hundred dollars, but I haven't logged into it in years.

[Host of Digital Social Hour]

I think I watch it be like.

[Christopher]

100K when you bought it, when it was like 2000.

[Host of Digital Social Hour]

Oh my God. So, dude, you're up. It's at 70k now. 75k.

[Christopher]

So I'm probably like 7, 800 from.

[Host of Digital Social Hour]

100 bucks, you would be up 37x.

[Christopher]

Yeah.

[Host of Digital Social Hour]

So you'd have $4,000.

[Christopher]

Yeah, basically. Yeah.

[Host of Digital Social Hour]

Yeah. Imagine if you put in. Wow. So you bought it early, man.

[Christopher]

Yeah, I made my mom buy 50 worth as well. Pretty much.

[Host of Digital Social Hour]

Oh well, she's got 2,000 bucks. You should tell her about it. It might hit 100k in the next few years. But Trump in office now. It's going up a lot this week.

[Christopher]

Yeah.

[Host of Digital Social Hour]

So we'll see what happens. But man, it's been fun. Where can people find you and do you teach any of this stuff?

[Christopher]

I do a little bit on Twitter. Yeah. I have a little bit of a base that people are interested in gas stations. There's also another guy I follow and interact with on Twitter as well. Gas biz guy.

[Host of Digital Social Hour]

Nice.

[Christopher]

He's like a gas station owner as well. And he really goes into the nitty gritty how to to start gas stations and manage them and everything. I'm on mainly on Twitter, although you can find me on Instagram as well.

[Host of Digital Social Hour]

Cool. We'll link both below. Some people call it X these days.

[Christopher]

Right.

[Host of Digital Social Hour]

So we'll link that. Thanks for coming on, man. That was fun. Yeah, thanks for watching guys. Check out the links below. See ya.

[Christopher]

Ya.

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