Despite an economic downturn, poor sales, sky-rocketing unemployment and a banking emergency, this actually may be a great time to think about purchasing 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 on the upswing, with sellers relaxing their purchase business terms because there are fewer qualified buyers, third-party financing becoming near impossible, and opportunities to negotiate a really good 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 very easy for enthusiastic, yet inexperienced buyers, to pay too much for a business for sale that has no chance for survival, even in good times.

Most importantly, it’s essential to understand the buy business environment before even thinking about whether to own a business. At the moment, the buying a business market is being significantly damaged by the present economy and there is very little small business lending happening. Consumer confidence that the economy will turn around sometime in the near future is at rock bottom, and many businesses are experiencing multi-month declines. For these reasons, it’s crucial when pursuing a business for sale to negotiate a good deal that will assure your protection both now and in the future if the economy doesn’t improve relatively soon.

Before deciding whether to own a business during these tumultuous times, there are six basic buy business steps to follow. By following smart purchase business philosophies, you will position your new business to succeed regardless of the economic climate.

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 current economic conditions, you need to see the business for sale financials from the current date and back to the past 12 months, as well as financials from the prior 12 months and the 12-month period before that. This will give you a better picture of the overall health 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 looking over the financials, review the expenses for marketing, advertising and payroll by performing an item-by-item comparison over quite a few 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. Even if a business is performing well, sales may show issues. 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 is critical to negotiate a performance-based deal, especially if the purchase business evaluation indicates 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 purchasing a business, it’s crucial that you acquire all the key financial and performance data which has anything to do with 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 author of the How to Buy a Good Business at a Great Price series. As President and founder of Diomo Corporation – The Business Buyer Resource Center, his materials, seminars and consulting have helped thousands of business buyers realize their dream of buying a business.