Buying a specialty retail shop in Florida

Specialty retail means independent shops built around one kind of goods: clothing and shoe boutiques, jewelers, gift shops, bookstores, sporting goods, bike and surf shops, tackle shops, toy stores, pet supply stores, furniture and home decor, florists. Customers pay at the counter or online. There are few contracts, so repeat business comes from regulars, a mailing list, special orders and services such as alterations, bike tune-ups, jewelry repair and engraving.

Profit is the gap between what you pay vendors and what you sell for, minus rent and payroll. So three things decide how a shop does: what it buys, where it is and how it brings people through the door. The owner usually does the buying, at trade shows and with vendor reps, months ahead of each season. In much of Florida the calendar follows tourists and seasonal residents, with a strong winter and slower summers in many coastal towns, plus the holidays everywhere. A typical team is the owner and a few full-time and part-time sales staff.

• A clear reason to come in that a big online seller can't copy: expert advice, fitting, a carefully chosen selection, repairs or events.
• Brands the shop is authorized to carry in its area, under vendor agreements that can pass to a buyer.
• Inventory that sells at full price, with few markdowns and little old stock.
• A good location at a rent sales can support, with enough time and renewal options left on the lease.
• A customer list and loyalty program the shop is allowed to keep using after a sale.
• An online store or social following that adds sales without depending on the owner's personal profile.
• Staff who know the products and the regulars by name.

Most specialty shops need no state license. You do need your own sales tax registration from the Florida Department of Revenue before you start selling, since the seller's can't be assigned (section 212.18). You'll also need a local business tax receipt, which can be transferred to a buyer for a small fee (sections 205.033 and 205.043).

A few product lines bring more:

• Used goods bought from the public or taken on consignment, such as household furniture, fine jewelry, electronics or golf clubs, need secondhand dealer registration with the Department of Revenue, with fingerprints and each location listed (chapter 538). Used clothing, books and costume jewelry are excluded.
• Pawn loans need a license from FDACS (the Florida Department of Agriculture and Consumer Services), and a change in ownership needs a new or temporary license (section 539.001).
• Firearms need a federal license from ATF that can't be transferred, so get your own before taking over (27 CFR 478.51).
• Tobacco and vapes need DBPR tobacco and nicotine dealer permits for each location, and neither can be assigned (sections 569.003 and 569.32).
• Food or drinks beyond a small display of packaged, shelf-stable snacks need an FDACS food permit, which can't be transferred (section 500.12).

If you're unsure about a product line, ask the agency before closing.

• Inventory value. Count it at closing and value it at cost, discounting or leaving out anything more than a season or two old. Find out what's on consignment and belongs to someone else.
• Gift cards and store credit. Customers will expect you to honor what's outstanding, so agree with the seller on who bears that cost.
• The lease. Rent as a share of sales, years left, renewal options, any planned redevelopment, and whether the landlord will agree to transfer the lease to you.
• Vendor terms. Confirm key brands will keep selling to a new owner, and ask about open orders already placed for next season.
• The seasons. Look at sales month by month for several years, including a slow summer and any hurricane closures.
• The seller's unpaid taxes. Buying more than half of a business, its assets or its inventory can make you liable for the seller's unpaid state taxes, up to the price or the value, whichever is greater (section 213.758). Get a certificate of compliance from the Department of Revenue before closing, and ask your attorney about holding back part of the price.

• Which brands or categories bring in the most profit, and which are fading?
• How do you decide what to buy each season, and who helps you?
• What share of sales comes from regulars, tourists and online?
• How did the shop do last summer compared with the winter?
• Which vendors would need to approve a new owner, and have you asked them?
• Why do customers tell you they shop here instead of online?
• How many hours a week do you spend on the floor, and who runs things when you're away?