Buying a tax or financial services firm in South Florida

• A high share of last year's clients coming back, and records that show it.
• A mix of individual and business clients. Business returns and monthly bookkeeping are usually worth more and last longer.
• Preparers besides the owner whom clients trust and who plan to stay.
• Credentials that fit the work, such as enrolled agents or CPAs for clients who need representation before the IRS.
• A clean record with the IRS: no preparer penalties and few rejected e-filed returns.
• Secure, modern systems: a client portal, multi-factor logins and a written security plan.
• Prices that have kept up with the work.

• Retention. Returns filed each year, and how many clients came back after any past change of preparer.
• Cash flow. Revenue by month, and whether the business covers its costs from May to December.
• Transition terms. Many deals tie part of the price to how many clients come back, with the seller working through a filing season. Ask your attorney and lender how that fits your financing.
• Compliance. Preparers face extra due diligence rules and penalties on returns that claim the earned income credit and some other credits. Ask about IRS visits, letters or penalties.
• Data security. Any breaches or stolen client data, cyber insurance, and whether the security plan is real.
• Software. Whether the tax software licenses and client data can move to you, and what any bank products tied to refunds depend on.
• Seasonal staff. Whether trained preparers will return next January.

• How many returns did you do in each of the last few years, and how many clients came back?
• Which clients deal with you personally, and how would you introduce them to me?
• Would you stay on through one or two filing seasons?
• What software do you use, and can the licenses and client data come over to me?
• Have you ever had an IRS penalty, compliance visit or data breach?
• How much of your revenue comes from bookkeeping and payroll outside tax season?
• When did you last raise prices, and how did clients react?

South Florida covers Miami-Dade, Broward, Palm Beach and Monroe counties: Miami, Hialeah, Doral, Fort Lauderdale, Hollywood, Pompano Beach, West Palm Beach, Boca Raton, Jupiter, and the Florida Keys down to Key West. It's the state's largest metro area and its most international. PortMiami, Port Everglades and Miami International Airport tie the region to Latin America and the Caribbean, which supports a deep base of wholesalers, freight forwarders and logistics firms, many of them near the airport. Tourism and cruises, finance and wealth management, health care, real estate and construction carry much of the rest. Palm Beach County adds wealthy seasonal residents and, out west near Lake Okeechobee, sugarcane and vegetable farms. In the Keys, nearly everything turns on visitors, fishing and boating.

Companies that serve homes, condo buildings and other businesses do well here: the building trades, property services, insurance agencies, medical and dental practices, and professional firms.

Costs run high: commercial rent, wages and, above all, property and windstorm insurance. Price the insurance before you make an offer, not after. Miami-Dade and Broward make up the Florida Building Code's High-Velocity Hurricane Zone, with stricter rules for roofs, windows and structures. That raises building costs, and it also gives steady work to the contractors who know those rules well.

Much of the workforce and many customers speak Spanish as well as English, and a company that works well in both languages has an edge. The winter season matters more in Palm Beach County and the Keys than in Miami. In the Keys, the cost of housing makes hiring and keeping staff one of the hardest parts of running a company. Ask any seller there how they find workers and where those workers live.