Florida’s Premier Business Brokerage

Buy A Business Checklist

Important Factors and References
for Consideration When Buying A Business

Here is a link to our website where you may search a database of over 2,500 +/- Florida businesses for sale. www.acquisitionexperts.net. On the top left side of the home page click on the Businesses For Sale heading. There are several saved searches that you may want to view right there. The second one down is entitled Search Florida Businesses for Sale. When you click on it, make sure to click the red “Advanced Search Options” tab. Under “How to Display” to the right change it from Standard to “One Line Plus Comments” to see a description of each business your search results find. Also this expanded search version allows you to search by such fields as Lender Pre Qualified, Home Based, Relocatable, Franchised, etc. Another useful box to check for weekly searches show listings modified in the last x days. If you run this weekly and use 7 days for example it will show you all the new listings or existing listings that have been modified within the time period, you chose. (Price reductions, verbiage changes, numbers updated, etc.) This is the easiest way to know which listings are new week to week. Also, you can define the County(s) and business category types using the Control button to choose as many as you want in each search. You may also search by Income Sources such as Tax Return or P&L. If you searched all of the Manufacturers or Distributors in the State for example, then you run a second search to see which ones used Tax Return or P&L as the Income Source. (These are generally the listings with cleaner books and records) When you find businesses you want more information on e-mail me the 7-digit BBF Listing Number and we’ll review the opportunity together.

Also, it’s preferable to have a short bio on yourself put together that we can forward as needed to other Brokers and a Personal Financial Statement for use only when needed with your permission. Usually when working with another Broker we would include your bio with the NDA and allude to having your PSF on file and tell them only that you are financially qualified and capable of acquiring the Listing of interest. Some Brokers may require having it on file in which case we seek your permission first. The biggest reason for having these in hand is when a new listing comes on that is RED HOT it goes quick. The Listing Broker may get 20 to literally 50 inquiries the first weekend from their own ads and other Brokers inquiring representing Buyers. In those cases, it’s very important to prove that YOU are a serious and qualified Buyer in order to get moved up the pecking order for information and a showing. Some companies have a policy that if the listing is over $250k they automatically require your Financial Statement, etc. Lastly, it’s fair play. We expect the Seller to provide us with Financials, Tax Returns, Asset Lists, Leases, etc. and it helps tremendously if they know you are operationally and financially capable of buying their business

Some of the items on a checklist that may need completed prior to buying an existing business may include:

  • Consult an Attorney to set up the appropriate legal structure to own the business and reduce personal liability. The most common legal structures for owning a Florida business are a Subchapter-S Corporation or Limited Liability Company (LLC).
  • Select a business trade name and determine if you need to register the business name with a fictitious name filing. Owners conducting business under a name other than their own may need to file, even if the name seems very similar.
  • Speak with an Accountant regarding the tax implications of the legal structure and the allocation of the businesses purchase price. The accountant can apply for an Employer ID Number (EIN).
  • Open a commercial bank account for your operating and/or payroll account(s)
  • Decide if you will do in-house payroll or use a payroll service or employee leasing service. Many of these services offer complete human resources departments and all of the payroll tax and unemployment tax required filings quarterly and annually
  • Set up a credit card vendor/machine
  • Apply for Department of Revenue Sales Tax License
  • Determine which licenses the business presently has and make sure they are current and valid at the time of sale.
    • Local business registration: Obtain City, County and/or Florida Business Tax Receipt applications and research the process of how and when licenses can be obtained and whether or not the licenses are transferable. Call city and county government offices to see if they require a local business tax certificate (formerly an occupational license) and/or zoning permit. For local business tax certificates, check with the city clerk or county tax collector. Fees vary by type of business and location. Many municipalities now make the forms available online.
    • State business registration and licensing: Pay special attention to State Department of Business and Professional Regulation (DBPR) Licenses, State Qualifier Licenses, County Specialty Licenses, Liquor Licenses, etc. These licenses may have special requirements that have to be met in when a business changes ownership. Businesses found not operating with the proper licenses may receive “cease and desist” orders and be fined, reprimanded or lose the right to do the type of business the license allows.
  • Check into business liability and content insurance. Start with the carrier being used by the Seller. Insurance is not transferable in an asset sale. Make sure you have a binder prior to closing. Research this well before closing. Insurance in Florida can be difficult to obtain in flood zones or coastal zones considered to be endangered by the threat of hurricanes. This also applies if you are buying real property.
  • Work closely with the Seller to set up the transfer of all utilities, the phone, yellow pages, other advertising; etc.
  • Find out what contractual and/or business obligations and relationships the company has with customers, outside suppliers, vendors or services. This could be anything from leased equipment, floor planning or other product financing, redeemable gift cards, coupons or vouchers, vendor or supplier credit applications for key vendors of the business, distribution agreements, territory agreements, vendor purchasing requirements or agreements, customer contracts or service agreements, product or service warranty obligations, industry or local business group memberships, etc.
  • Florida Tangible Personal Property Tax. Florida businesses that own tangible personal property (equipment, furniture, computers, etc.) that is not included in the assessed value of the real property must pay an annual tax. The tax is paid on form DR-405 to the county property appraiser. The estimated tax for the current year should be pro-rated at closing, with the Seller covering their pro-rata share up to the date of closing.
  • The list can go on and on depending on the nature of the business you are buying.

Links To Important Resources