What Details Should I Consider Before Purchasing an Existing Florida Business?
Our MLG Business Litigation Group attorneys in Florida know how exciting it can be to start a new business that gives you the freedom to be your own boss. We also know that purchasing an existing Florida business that has solidified both the physical and financial legwork to be legitimately up and running seems like you are already ahead.
Before you throw everything you physically, emotionally, and financially have into becoming the owner, here are a few things you should consider to get it right the first time.
A Comprehensive Outline of What Is (And Is Not) Included in the Business
When buying an existing Florida business, it is important that you have a comprehensive list of everything included in the sale.
For some places, that may include a building or its inventory.
For others, it could simply be the name of the business, its brand, and any intellectual property.
It is imperative that each of these details is outlined in a purchase agreement and reviewed by a skilled Florida business litigation attorney before signing.
The Real Reason the Current Owner is Selling the Florida Business
There are multiple reasons why someone may want to sell their Florida business.
He or she could just want to retire. They may want to move on to a different business venture. Or, there may be a different reality the new buyer must uncover before agreeing to purchase the business.
They may include:
- Is it difficult to operate?
- Are large expenses — like equipment purchases or structural damage — looming?
- Has the demand for the service(s) or product(s) significantly decreased?
- Is the market saturated with competitors?
One significant detail may be that the business is just not as profitable as it looks.
Talk to community leaders, locals, and other people who are aware of its operations — even if they just have an opinion — so you know which additional questions to ask before you take the plunge.
A quick way to determine how successful the business is is to request all financial records upfront and in good faith. If the current business owner is unwilling to share a full picture of the business’s past success and income potential, it is a red flag.
Will the Changing Seasons Affect Your Florida Business?
Most Florida businesses have certain times of the year that are busier than others. For some, those times can be extreme.
If the business is significantly impacted by the seasons, can you make up for the loss of off-season revenue during the tourist season?
Is the Business or Industry Demanding Growth?
Once you fully understand who buys your products or services, you must determine whether those demographics are shifting.
- Are changing trends affecting demand for the product or service?
- Are there similar businesses in your area that are struggling? Or, worse, closing?
Before you agree to open a Florida start-up, or purchase an existing business, you must know exactly who your target audience is, how you plan to pivot with important trends, and sustain their changing preferences.
Find Out Everything There is to Know About the Business and Its Liabilities
Since one of the first things you will want to know about the business is, “What comes with it?” the second thing you will want to know is, “What else comes with it?”
Some Florida business owners will spend hours touting the traffic they receive, and how their sales are through the roof to excite new investors or buyers.
What they typically do not lead with are the liabilities.
- Are they under existing contracts with vendors or partners?
- Are there any pending lawsuits?
- Do they have any outstanding loans, debts, unpaid taxes, judgments, or liens tied directly to the business?
Talk to Our MLG Business Litigation Group Attorneys in Florida Before You Get Started
At MLG Business Litigation Group, our Florida Business Litigation attorneys can help you understand everything about purchasing an existing business, so no detail is left to chance or simply overlooked by the excitement of the purchase.
Whether the business requires some form of registration, licensing, or permits, or if you want to ensure the purchasing agreement protects you from the beginning of your negotiations, we can help ensure all your questions are answered by the existing owner, so you can take over with confidence.