Buying a business in Florida is an exciting opportunity, but it's also one of the most complex transactions you'll ever undertake. Many buyers — especially first-time business purchasers — make avoidable mistakes that can cost them thousands of dollars, expose them to unexpected liability, or derail a deal entirely.
Here are five of the most common and costly mistakes to avoid when buying a business in Florida.
1. Skipping or Rushing Due Diligence
Due diligence is the process of thoroughly investigating a business before you buy it. This includes reviewing financial statements, tax returns, contracts, leases, employment arrangements, intellectual property, licenses, and any pending litigation. Buyers who skip or rush this process often inherit problems they didn't know existed.
Common areas where problems surface during due diligence:
- –Undisclosed liabilities or pending lawsuits
- –Contracts with unfavorable terms or upcoming expirations
- –Unpaid taxes or outstanding liens
- –Employees misclassified as independent contractors
- –Intellectual property that hasn't been formally registered or protected
Give yourself adequate time for due diligence — typically 30 to 60 days for most small business transactions — and engage an attorney and accountant to assist.
2. Choosing the Wrong Deal Structure
Business acquisitions can be structured as either asset purchases or stock/membership interest purchases. Each has very different legal and tax implications.
In an asset purchase, you buy specific assets of the business — equipment, contracts, goodwill, inventory — and generally do not assume the seller's liabilities. This is the most common structure for small business transactions and is typically preferred by buyers.
In a stock or membership interest purchase, you buy ownership in the entity itself — which means you also inherit all of its liabilities, including unknown or contingent ones. Sellers often prefer this structure for tax reasons. The right structure depends on your specific situation, and choosing incorrectly can result in unexpected tax liability or inherited debt.
3. Assuming Licenses and Permits Automatically Transfer
Many buyers assume that when they buy a business, the existing licenses and permits come with it. In Florida, that is often not the case.
Many professional licenses issued by the Florida Department of Business and Professional Regulation (DBPR) are issued to the individual, not the business — meaning they cannot be transferred at all. Local business licenses, zoning approvals, and liquor licenses may require new applications and approval processes that can take months.
Before closing, confirm exactly which licenses and permits are required to operate the business and whether they are transferable or will need to be obtained fresh. Failure to do so could mean you are unable to legally operate after the sale closes.
4. Overlooking Employment and HR Liability
The employees of the business you're buying can be one of your biggest sources of post-closing liability if you don't conduct proper employment due diligence.
Look for:
- –Workers misclassified as independent contractors
- –Unpaid wages, overtime, or benefits
- –Non-compliant employee handbooks or policies
- –Active or threatened employment claims
- –Non-compete or non-solicitation agreements that could restrict key employees
In Florida, employment law is complex and evolving — most recently with the CHOICE Act expanding non-compete rights for high-earning employees. An attorney with employment law experience can help you identify and address these issues before they become your problem.
5. Not Using a Florida Business Attorney
Many buyers try to save money by using generic online templates or out-of-state counsel who isn't familiar with Florida law. This is a false economy.
Florida has specific laws that govern business sales, non-compete enforceability, successor liability, and closing requirements. An attorney who doesn't practice in Florida may miss these issues entirely — leaving you exposed after the deal closes.
Wheeler Legal works exclusively with Florida businesses and entrepreneurs. Before you sign a Letter of Intent, contact us to discuss your transaction.