1. Buying an existing Tucson business will significantly reduce the uncertainty that is inherent in trying to start a business from the ground up

2. When you buy an existing business in Tucson you will also gain access to a business with ongoing operations and cash flow and a network of valuable relationships

3. Finally, you might consider buying a business in Tucson if you could get it at a bargain price—a price below what it would cost to start a new business

Let's look at each of these reasons for buying a Tucson business in greater detail

Reduction of Uncertainties

A successful Tucson business has already proven that it can attract customers, control its costs, and earn a profit.  While the past is not necessarily an indicator of future performance,  the businesses current and past performance is a reflection of its ability to succeed under actual market conditions. When considering starting a new business, selecting the right location is always a concern.  When you acquire an existing business you can eliminate that uncertainty because you will know how the business has performed at its present location. No matter how hard you study the strength of a potential location for a new business, traffic counts are only so useful in assessing the potential success of a new location. The real test, of course, comes when a new business opens its doors in Tucson at that location.  With an existing firm, this test has already been passed and the results are known.  You may not be satisfied with the past results of the business you're considering buying, but at least you will know and be able to formulate plans for exceeding past performance should you acquire the business.  You can see the results of an existing business in its sales and profit data. Noncompetition agreements are needed, however; to discourage the seller from starting a new company that will compete directly with the one being sold.

Acquisition of Ongoing Operations and Relationships

The buyer of an existing Tucson business typically acquires its management and staff, equipment and inventories, physical plant and possibly real estate, established banking and supplier relationships, and ongoing other valuable ongoing relationships. To build these relationships from scratch when starting a new business would take an enormous amount of time and effort.  The benefit of acquiring the operations and relationships of a going concern are only valuable under certain conditions, however.  For example, the management and skilled workers of a firm  are only a valuable asset if they will continue to work for the new owner.  Buildings, plant and equipment are only valuable to the extent that they are well maintained and not obsolete.  Relationships with suppliers,  customers, financial institutions and service providers are only valuable if they are healthy, and not impaired by past breaches of trust.  It is also possible that new leases and supplier contracts will need to be negotiated with current leaseholders and vendors, but it is generally easier to get the attention of a vendor or partners of an established business where they also have something to lose, than with a startup business that only represents a risk for them until proven otherwise.

A Bargain Price

For buyers considering acquiring an existing Tucson business for sale, it's important to keep in mind that a business is worth what the top bidding buyer is willing to pay.  A seller who is more eager to sell a business than a buyer is to buy it, may be willing to make concessions in the sales process.  Additionally, most existing businesses are sold with some form of seller financing, which is far easier to come by than bank lending or SBA loans.  However, whether it is actually a good buy must be determined by the prospective new owner as part of the due diligence process. The price may appear low, but several factors could make a “bargain price” anything but a bargain. For example, the business may be losing money, the location may be deteriorating, or the seller may intend to reopen another business as a competitor.

On the other hand, an existing business for sale in Tucson may indeed be a bargain and turn out to be a wise investment. What kind of Tucson business are you searching for?   Contact Us or give us a call at 520-909-8242 to discuss the many benefits of buying an existing business