Questions to Ask When Buying a Business: A Florida Buyer's Guide

Buying a business in Florida is one of the most significant financial decisions you will ever make. Florida’s economy — fueled by tourism, a surging technology sector, retiree spending, and no state income tax — makes it one of the most active M&A markets in the country. But a deal that looks excellent on paper can turn into a costly mistake if you walk in without asking the right questions.

At CBH Business Group, we have advised on hundreds of buy-side and sell-side transactions across Central Florida and statewide. The buyers who close the best deals all share one habit: they ask hard questions early, before they are emotionally committed to a deal. Here is what you need to ask — and why it matters.

1. Why Is the Owner Selling?

This is the first question every buyer should ask, and the answer matters more than most realize. Legitimate reasons include retirement, health issues, relocation, partnership dissolution, or a desire to pursue other ventures. Red flags include answers that are vague, inconsistent, or that do not align with what the financial statements show.

If revenues are growing and the business is profitable, press harder. A seller cashing out at peak performance is not unusual — but you need to understand what they see coming around the corner. Ask whether they have already received other offers and why those deals did not close. The pattern of failed or declined deals tells you something important.

Also ask: is the owner willing to stay on for a transition period? The most confident sellers agree to 3–12 months of post-close transition support. Reluctance here can signal that the business is more owner-dependent than represented — a meaningful valuation risk.

2. What Do the Financials Actually Show — and What Has Been Added Back?

The stated net income on a tax return is rarely the number that drives deal pricing. Business brokers and M&A advisors focus on Seller Discretionary Earnings (SDE) for smaller businesses and EBITDA (earnings before interest, taxes, depreciation, and amortization) for larger ones — each adjusted to normalize owner compensation, one-time expenses, and non-recurring items.

Ask the seller for a re-cast profit and loss statement and go through every addback line by line. Legitimate addbacks include owner salary above market rate, personal vehicle expenses run through the business, and one-time legal or relocation costs. Illegitimate addbacks — revenue that cannot be verified, phantom expense eliminations, or speculative synergy projections — are red flags that should give any buyer pause.

Insist on three years of tax returns, P&Ls, and bank statements. If the stated profit does not match what is depositing into the bank account, stop. No amount of seller optimism bridges that gap in due diligence or at the closing table.

3. How Concentrated Is the Customer Base?

Customer concentration is one of the most commonly underestimated risks in small business acquisitions. Ask for a revenue breakdown by customer, ranked by size. If a single customer accounts for more than 20–25% of revenue, that is a risk factor that directly affects your purchase price — and your lender’s willingness to finance the transaction.

Follow up by asking: are those customers under contract? When do those contracts renew? Have any major customers been lost or added in the past 12 months? Do any key customers have a personal relationship with the current owner that may not transfer to a new buyer?

Florida businesses in service industries — HVAC, landscaping, healthcare services, pest control — are especially susceptible to customer walk-off risk following a change of ownership. Factor this concentration risk into your offer price and deal structure, and consider requesting an earnout or seller note tied to revenue retention post-close.

4. Are the Contracts, Licenses, and Key Relationships Transferable?

This is where many acquisitions hit unexpected walls. Ask for a complete inventory of:

• Customer contracts — do they contain change-of-control clauses requiring customer consent to assign?
• Vendor and supplier agreements — will pricing and terms survive the ownership transition, or will suppliers reprice?
• Licenses and permits — does Florida or the local municipality require re-application upon a change of ownership?
• Lease agreements — does the landlord retain the right to terminate or renegotiate on sale of the business?
• Key employee agreements — are top performers under non-solicitation, non-compete, or retention arrangements?

A business that relies on a state-issued professional license — dental, medical, engineering, general contracting — may require a licensed individual as the operating principal. This affects deal structure, timeline, and in some cases makes a traditional ownership transfer impossible without a licensed buyer or hired operator.

5. What Are Industry EBITDA Multiples and Is the Asking Price Justified?

Valuation is the most argued point in any acquisition — and the most important. Before making or accepting an offer, understand where the asking price sits relative to industry-standard transaction multiples. The table below reflects 2025–2026 Florida market ranges based on closed transactions in the lower middle market:

If the asking price is at the high end of the range, understand exactly why the seller believes the premium is justified. If they cannot articulate it clearly, the market — and your lender — will not agree either. You can also use CBH’s free business valuation calculator to benchmark any target against current Florida market data.

6. Has a Quality of Earnings Report Been Completed — and Can You Commission One?

A quality of earnings (QoE) report is an independent financial analysis performed by a third-party CPA firm during due diligence. It verifies that the seller’s stated EBITDA is real, sustainable, and supported by the underlying financials — including bank records, accounts receivable aging, deferred revenue schedules, and the validity of claimed addbacks.

For any deal above $500,000 in purchase price, a QoE report is standard practice among sophisticated buyers. For deals above $1 million, it is expected by SBA lenders and institutional buyers alike. The cost typically runs $5,000–$20,000 — a rounding error against the price of discovering post-close that earnings were overstated by 30%.

Ask the seller if they have had one conducted. If not, negotiate the right to commission one as a condition of your Letter of Intent. A seller who categorically refuses access for a QoE should be treated as a serious red flag, not a negotiating position.

7. What Is the Working Capital Baseline, and How Is It Being Defined?

Working capital — typically current assets minus current liabilities — is one of the most negotiated and most misunderstood elements of any acquisition. The seller’s broker will define it one way; your attorney and accountant will define it another. The gap between those definitions can represent hundreds of thousands of dollars at closing.

Ask early: what is the normalized monthly working capital requirement to run this business? What does the seller consider “sufficient” working capital to leave in the business at close? How are accounts receivable, inventory, and prepaid expenses being treated? Are there seasonal fluctuations that should be factored into the target?

Working capital disputes are among the most common post-closing disagreements in M&A transactions. Getting alignment on definitions and targets before the LOI is signed saves significant legal cost and friction later in the process. Review our M&A resources for a working capital primer specific to Florida business acquisitions.

How CBH Business Group Supports Florida Buyers

Whether you are a first-time buyer or an experienced acquirer adding to a portfolio, the questions above are just the beginning of a thorough due diligence process. At CBH Business Group, our advisors work with sellers exclusively — but we understand what buyers need, because we have navigated both sides of hundreds of Florida transactions. Understanding how a sell-side advisor thinks is one of the most valuable edges a buyer can have.

We can help you benchmark deal structure, assess whether seller representations are market-standard, and identify risks that are often hidden inside financial statements and disclosure schedules. Our team is based in St. Cloud, Florida and serves clients across Central Florida and statewide.

Ready to discuss a business you are evaluating? Call our team at (407) 908-3845 or visit our contact page to schedule a confidential consultation. You can also explore our business valuation resources or connect with a Florida M&A advisor to get an independent perspective on any deal you are considering.