Think the same reason you buy any working business. The previous owner has managed to solve a great number of non-obvious operational problems. To name a few that come to mind:
* Established supply chain
- Working agreements with suppliers (no need to find and negotiate suppliers)
- Working logistics. Scheduling of supplies is sorted, you have reliable delivery slots with all supplies
* Employees. No need to find and train labour.
* Working pay roll, accounting, taxes. No need to create that infrastructure from scratch.
* Know good business model, with auditable accounts. You substantially de-risk the investment, because you have meaningful historical data to estimate future performance from.
* Physical infrastructure already setup. No need to find a building, buy equipment (shelves, tills etc) and setup equipment.
* Business generates revenue for new owner immediately after purchase. No time needed to solve all of the above problems, instead time can be used to grow or stabilise business.
Owning the only grocery store in town doesn't sound like a risky business model compared to the existing and apparently de-risked "only grocery store in town" business model you'd be paying for.
I normally think of the existing customer base and "brand" as the main asset, which isn't much of an asset here. But I don't have experience managing retail business, and what you say makes sense, thanks!
* Established supply chain - Working agreements with suppliers (no need to find and negotiate suppliers) - Working logistics. Scheduling of supplies is sorted, you have reliable delivery slots with all supplies
* Employees. No need to find and train labour.
* Working pay roll, accounting, taxes. No need to create that infrastructure from scratch.
* Know good business model, with auditable accounts. You substantially de-risk the investment, because you have meaningful historical data to estimate future performance from.
* Physical infrastructure already setup. No need to find a building, buy equipment (shelves, tills etc) and setup equipment.
* Business generates revenue for new owner immediately after purchase. No time needed to solve all of the above problems, instead time can be used to grow or stabilise business.