In any business acquisition, excitement runs high once an offer is accepted, but this is when the real work begins. Before you sign on the dotted line, you need to confirm that the business you’re buying is financially sound, operationally stable and legally clear.

In Step 1 of Buying a Business, we covered what happens during the search and evaluation stage of an acquisition. This includes clarifying your goals, assembling the right team and screening opportunities to see which might be a good fit. In Step 2, we outlined how to move into offers and negotiations with an NDA, LOI and deal terms. Now comes the most critical step of all: due diligence and financing.

This is the stage where you verify that the business you’re buying is everything the seller claims it to be. It’s also where you finalize your financing, so the deal is ready to close. Here’s what to focus on during this step of buying a business in Florida.

Financial Due Diligence

The numbers tell the story of a business, but only if you know what you’re looking for. Financial due diligence goes beyond glancing at a profit and loss statement; it’s about confirming accuracy, identifying risks and projecting future performance. Here are key areas to review:

  • Revenue, margins and cash flow (SDE or EBITDA) – Look for consistency over time. A sudden spike or dip could signal a one-off event rather than a sustainable trend.
  • Customer concentration – If 40% of revenue comes from one client, the business could be at risk if that customer leaves. Aim for diversified income streams.
  • Trends and seasonality – Does the business generate steady revenue year-round, or is it heavily seasonal (e.g., tourism, retail or construction)?
  • Accuracy of financial statements and tax returns – Have a CPA reconcile reported earnings with filed tax returns. Discrepancies can indicate sloppy bookkeeping… or worse.
  • Expense verification – Look closely at payroll, rent, insurance and other recurring expenses. Are there hidden costs or personal expenses running through the business?

Clean and verifiable financials are the foundation of a sound acquisition. If the books are messy, you’re buying uncertainty.

Operational Review

Even the most profitable business can falter if operations aren’t sustainable without the seller. Here, you’re looking at how the business functions day-to-day and whether it can thrive under new ownership. Focus on:

  • Systems and processes – Are there documented procedures, or is the business run “out of the owner’s head”? Standardized processes make transitions smoother and reduce risks.
  • Key employees – Identify the staff who keep operations running. Are they likely to stay on after the sale? Do they have employment agreements in place?
  • Customer and vendor contracts – Long-term contracts provide stability but make sure they’re assignable to the buyer. Some may require renegotiation or landlord consent.
  • Supplier relationships – Check for single-source suppliers. A disruption here could shut down operations.
  • Owner dependency – Will the business struggle without its current owner? Consider how you’ll step into that role or delegate it. A strong business should operate smoothly without the seller’s daily presence. If not, you’ll need a clear plan to fill that gap.
Legal Review

The legal side of due diligence protects you from buying headaches you didn’t sign up for. Your attorney will help you uncover hidden liabilities and confirm the business’s legal standing. Key considerations include:

  • Corporate structure and governance documents – Make sure the entity is properly formed, in good standing and authorized to do business.
  • Pending litigation – Lawsuits or disputes can carry financial and reputational risks that transfer with ownership.
  • Debts, liens and obligations – A UCC search will reveal whether creditors have claims on the business’s assets.
Secure Financing

While due diligence is underway, you should also be locking in your financing. Having funding secured early keeps the deal moving and gives sellers confidence in your ability to close. Funding options for a Florida business acquisition include:

  • SBA loans – Ideal for many small business buyers. They offer lower down payments and longer terms, though they require extensive documentation.
  • Conventional bank loans – Typically suited for larger, more established businesses with strong collateral and financials.
  • Seller financing – Often used to bridge the gap when banks won’t finance the entire purchase. It also keeps the seller invested in your success.
  • Private investors or equity partners – Best for buyers with ambitious growth plans or acquisitions that don’t fit traditional lending criteria.

Remember, lenders will require finalized deal terms, financial records and often a business plan before issuing a commitment. Keep your documentation organized to avoid delays.

Protect Your Investment with Expert Guidance

The due diligence period is your chance to validate the deal—and renegotiate or walk away if red flags appear. Skipping steps or rushing through this stage can lead to costly surprises after closing. 

At the Law Offices of Alex D. Sirulnik, P.A., our attorneys work closely with buyers, CPAs, lenders and brokers to ensure every financial, operational and legal detail is thoroughly reviewed before closing.

Contact us today to schedule a consultation and move forward in your business purchase with clarity and confidence.