Buying a software company in South Florida

• Most revenue comes from subscriptions or maintenance that renew, and few customers cancel.
• A niche where the product is hard to replace because it holds customers' records or runs their daily work.
• More than one developer understands the code, and it's documented, tested and kept in version control (a system that tracks every change).
• Clear ownership of the code: every employee and contractor signed an agreement assigning their work to the company.
• The product runs on current, supported technology at a reasonable hosting cost.
• New customers come through a repeatable process (search, referrals, partners who resell or recommend it), not only the founder's relationships.
• Support requests are tracked and manageable, and the product doesn't need constant hand-holding.

• Have an independent developer review the code for quality, security, documentation and outdated components.
• Have the code scanned for open-source components. Some open-source licenses put conditions on how code can be distributed.
• Confirm the chain of ownership: signed assignments from every founder, employee and contractor who wrote code.
• Read the largest customer contracts for change-of-control clauses (terms triggered by a sale), uptime promises, limits on liability and data duties.
• Look at renewals and cancellations by customer group over several years, not just total revenue.
• Check who controls the domain, hosting accounts, app store listings and code repository.
• Separate truly recurring revenue from custom work that has to be won again each year.
• Review hosting bills and the outside services the product depends on.

• Who besides you could fix a serious bug in the core code tomorrow?
• How many customers canceled last year, and what reasons did they give?
• Did everyone who wrote code sign an agreement assigning it to the company?
• What's the oldest part of the system, and what would it take to modernize it?
• Has the company ever had a security incident or data breach?
• When did you last raise prices, and what happened?
• How do new customers find you?

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.