If the business you're buying is making money, you may be able to obtain a bank loan to finance the deal. However, if the seller is willing to provide financing, this may be an even better option. Seller-side financing (often referred to as an "earn-out") allows the buyer to make a small downpayment--say, 10 percent of the purchase price--then pay out the rest over time.

Often, earn-outs are tied to the company's future financial performance, giving the former owner an incentive to teach you the business and retain loyal customers.