Despite a slumping economy, low sales, high unemployment and a banking crisis, this actually might be a good time to consider buying a business. The reason is quite simple: it’s a buyer’s market, which means the environment is ideal to own a business.

Buy business trends are moving upwards, with sellers relaxing their buy business terms because there are a lesser number of qualified buyers, third-party financing has become almost impossible, and chances to negotiate an excellent deal for a business for sale aplenty.

However, the receptive environment for purchasing a business doesn’t mean you should march ahead without establishing specific buy business fundamentals. It’s quite common for highly motivated, yet inexperienced buyers, to pay out far too much for a business which has no real chance of staying afloat, even in better than average times.

First and foremost, it’s important to know the purchase business climate before even considering whether to own a business. Currently, the buying a business market is being crippled by the economy and there is a lack of small business lending. Consumer confidence that the economy will turn around anytime soon is very low and many businesses are seeing multi-month declines. For these reasons, it’s necessary when considering a business for sale to negotiate a deal that will protect you now and in the future if the economy doesn’t improve in the near-term.

Before deciding whether to own a business during these tumultuous times, there are six basic buy business steps to follow. By following prudent buy business guidelines, you’ll position your new business to succeed irrespective of the economic environment.

Here is a look at the six important steps to buying a business:

1. Request Several Previous 12-Month Profit & Loss Statements. Normally, a seller would provide year-end financial statements, any interim statements and tax returns for buy business inquiries. But considering the present economic environment, you’re going to need to review the business for sale financials from the present date and back to the past 12 months, as well as financials from the previous 12 months and the 12-month term before that too. This will give you a good idea of the overall profitability of the business for sale.

2. Be On The Lookout For Hidden Expense Cuts. With a business for sale, many sellers try to make the company look better by making cuts to enhance profits. When reviewing the financials, look at expenses for marketing, advertising and payroll by doing an item-by-item comparison over several periods and comparing the number to sales or income. Furthermore, a review of the balance sheet will show whether inventory has been cut or if shareholders or owners contributed their own money to improve the company’s bottom line.

3. Review The Customer Base. When purchasing a business, understanding the existing customer base is essential. Although a business may be performing well, sales might show problems. If you chose to own a business where sales are dwindling, be sure to adjust the purchase price accordingly and have a new sales and marketing strategy in place.

4. Negotiate Earnouts. These are purchase business terms based on performance. Linked to the purchase price, earnouts are assurances that the business for sale can survive in the current economic climate and grow in the near future. Once you’ve done an in-depth analysis of the books, establish an asking price that reflects the current performance of the business and its stability for future declines. It’s essential to negotiate a performance-based deal, especially if the buy business evaluation shows a loss or no recent stability or growth. With an earnout structure, the seller receives the balance of the purchase price when certain targets are met in the future. Earnouts can be based on profitability, sales, or retention of customers.

5. Insist on Seller Financing. As far as lenders are concerned, this is not a buy business climate. So chances of you receiving financing for buying a business are slim, especially if you have little collateral or no business ownership experience. As such, it’s important that the seller finance the entire purchase business price or a large portion of it.

6. Don’t Be Intimidated By Business Brokers. They represent the seller, so it’s their job to present a positive buy business environment. As such, you need to take control of the deal.

When buying a business, it is essential to obtain all the key financial and performance data related to the business for sale. This information is your bargaining tool when meeting with the seller. You can own a business and be successful at it if you make well informed purchase business deals with the seller to limit your risk. Despite the current business climate, it’s exciting to own a business and nothing should stand in your way of realizing your dream.

Richard Parker is the President and founder of the Diomo Corporation – The Business Buyer Resource Center. His inspiring materials, seminars and consulting have assisted thousands of business buyers with achieving their life long dream of buying a business.