In 2018, the number of businesses bought and sold hit a record level. A lot of things have changed since 2018, but for business owners, the push to succeed never stops. And as the economy picks back up, there's no better time to buy an existing business.

But before you get started with owning a business, never mind running a business, you have to understand the purchasing process.

Here's a quick and easy guide for entrepreneurs looking to purchase an existing business.

Before You Consider Buying a Business

Before you enter into any negotiations, you need to consider three factors:

1. The quantity you can invest

2. Your talents and lifestyle

3. The full business landscape

Figuring out what you can invest sets the budget. Understanding your talents and lifestyle will help you recognize your strengths, which will help you figure out what type of business is a good match for what you have to offer. From there, you're in good shape to turn a critical eye to the business landscape—i.e. the details that shape your purchase, and whether that purchase is the right fit.

Take a Look at Current Business Ownership

Once you've figured out yourself, you're ready to figure out the existing business. Or rather, the existing business ownership.

You'll start with one mission: figuring out why the business is for sale. Sure, people get sick and retire, but they may also be looking to cut their losses before a major chain puts them out of business. They won't tell you that during negotiation, though, so you have to sniff around on your own.

To do this, look at everyone around the business. We're talking realtors, suppliers, the local chamber of commerce, even other businesses in the area. This will help you suss out information that the business owner may not tell you upfront.

Before Business Acquisition, Figure Out What It's Worth

If you know the real reason for selling and the business is still worth it, take a look under the hood and figure out what you get with the asking price. In other words, it's time to do your due diligence.

For example, take a look at the assets you're actually getting in the purchase price. What are they worth? The business owner's spec sheet will give you a breakdown, but pay careful attention to intangible assets, like customer base or business reputation—business owners tend to inflate this, especially when negotiating a sale.

You should also work with a financial expert to comb through the business's financial statements of the last three years. You should also figure out who prepared the documents, and if it was done by an outside CPA, the financial statements should come with documents like an auditor's report or a review engagement report that explain the depth of the review.

Your Expert Partner in Buying an Existing Business

In short? When you're looking to acquire an existing business, it helps to have experts in your corner.

That's where we come in. At BizNexus, we make it easy to close a deal in three simple steps, and we work with you to ensure it all goes off without a hitch. Plus, we provide the data and analytics you need to make an informed decision. In other words, we make it easy to buy a great business.

Ready to get started? Sign up today to buy a business the smart way.