Reduction Of Uncertainties.
A successful business has already demonstrated its ability to attract customers, control costs, and make a profit. Although future operations may be different, the firm's past record shows what it can do under actual market conditions. For example, just the fact that the location must be satisfactory eliminates one major uncertainty. Although traffic counts are useful in assessing the value of a potential location, the acid test comes when a business opens its doors at that location. This test has already been met in the case of an existing firm. The results are available in the form of 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.