Financial records
You should have industry averages and an idea as to what to look for in the way of future problems. If things still look reasonable it's time to dig into the specific business you are looking at.
Review ALL of the financial records of the business -- including their bank deposits, business check book and tax returns.
If you are not competent to do so hire a CPA to do it for you. It may be expensive, but you could lose more, if a wrong decision is taken.