Small-Business Success Story: A Different Kind of Service Station

Kiplinger's spoke with Lonnie McQuirter (pictured at left), 29, of Minneapolis, Minn., about why he decided to open his own gas station 36 Lyn Refuel Station. Read on for an excerpt from our interview:

How did you come to own a gas station? My dad bought the right to operate the station and convenience-store fixtures from the former owner, a BP franchisee, in 2005. Dad already owned a commercial cleaning business, and he tried to run both businesses until his father became ill and he began spending half his time with him. I was working for Häagen-Dazs, going to college and trying to help my dad, too. I began to work in the store full-time. He gave me the business in 2007, but I like to say that I earned it through sweat equity and proving myself.

You had a different vision for the store? We serve blue-collar workers, commuting professionals, after-event crowds, families and students. To better serve our customers, I knew that we needed to offer something better than conventional convenience-store offerings. So we started offering bana­nas and nutrition bars at the checkout. Now we work with local suppliers of yogurt, honey, peanut butter, organic eggs, vegan power bars, chai tea and more. We grind and brew Peace Coffee [a fair-trade brand], so our store smells like fresh coffee, not hot dogs and nacho cheese.

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And you also installed a charging station. I paid $60,000 for a DC fast-charging station. It charges a Nissan Leaf in less than 15 minutes at 12 cents per minute.

You still sell cigarettes? Yes, but our goal is to do without them. Sales of cigarettes—-and candy and chips—-have been shrinking, and the profit margins are terrible. Working with smaller suppliers provides better margins, which allows us to reinvest in the store and pay our employees better.

Did you take on any debt? In 2007, BP decided to sell the real estate and the gas pumps, so we had to get a mortgage. After visiting about a dozen banks, my dad and I got a loan of $875,000 with an interest rate of 10% from a com­munity bank. We're still paying on that. And BP still gets a percentage of gasoline sales and BP credit card transactions.

How's business? In 2005, we did about $3 million to $4 million in gross revenues. From 2008 to 2010, we hit some speed bumps: Traffic fell due to roadwork that changed commuting patterns, and after the [April 2010 Deepwater Horizon] oil spill, people decided they didn’t want to support BP. But in 2015, our gross revenues were about $11 million. Our staff of six, not including me, served an average of 1,500 customers a day.

Are you making a living? Yes, a pretty good one. Last year, I took a monthly salary for the first time.

You're employee-friendly? Retail sets a low bar for employees, especially at gas stations, and employers treat employees as commodities. We spend a lot of time and resources to find and train good employees who will care about the customers. But we also empower them to exercise good judgment and say something like "This may not be the right store for you" when a customer is being verbally abusive.

What's your greatest satisfaction? When a customer says, "I wasn't expecting…," or "This really helped me out," or "I tell all my friends about your place," that helps me keep my energy up and my staff working here.