The Fair Price Evaluator
Check the price before you buy the business. Enter three years of the seller's financials. Get an indicative fair value range, a health check across seven dimensions, and the specific questions to put to the seller before you make an offer.
Brokers act for the seller. Nobody in the South African market gives the buyer this analysis for free.
A note on the numbers. This tool is only as good as the figures you give it. Sellers' management accounts are frequently flattering. Ask for annual financial statements, SARS filings and bank statements, and verify what you are told before you rely on it. The report tells you where to look.
Tell us about the deal
These settings shape the whole evaluation: which benchmarks apply, which earnings basis fits, and whether the price you are being asked can carry the debt you would take on.
Sets margin bands, working capital norms and the indicative multiple range.
The SA convention is often "plus stock at value". We add stock to the price for comparison.
A shares purchase inherits the company's liabilities. This affects your due diligence list.
Owner-operated businesses are priced on Seller's Discretionary Earnings (SDE).
Retail businesses in SA typically change hands at 1.5× to 3.0×. Adjust if you disagree.
Lets us test whether the business's own cash flow can service your loan.
Three years of numbers, straight from the seller's statements
All three years are required, oldest first. The trends between the years matter more than any single figure, and a tool that let you skip a year would be lying to you about what it can see. Rand amounts, no cents.
| Line item | Trend | |||
|---|---|---|---|---|
| Income statement | ||||
| Revenue | ||||
| Cost of sales | ||||
| Operating expenses (total) | ||||
| of which: owner salary and benefits | ||||
| of which: rent | ||||
| Depreciation and amortisation | ||||
| Interest paid | ||||
| Net profit before tax | ||||
| Gross profit (computed) | ||||
| Balance sheet | ||||
| Cash and equivalents | ||||
| Trade debtors | ||||
| Stock | ||||
| Other current assets | ||||
| Fixed assets (net) | ||||
| Trade creditors | ||||
| Other current liabilities | ||||
| Interest-bearing debt | ||||
| Owner loans (owed by the business) | ||||
| Equity | ||||
| Owner flows | ||||
| Drawings and dividends taken | ||||
| Capex spent | ||||
Add detail (optional) · sharpens specific checks when provided
Revenue from your single largest customer
Enables the concentration check.
Stated operating cash flow
If the seller can produce it. We cross-check it against the figure the statements imply.
Used instead of book value when comparing a "plus stock" price.
What the business really earns
Reported profit is not what you are buying. Owner-run businesses carry the owner's salary, perks and once-offs through the books. This step strips them out. It is where the real price is made or lost, which is why it gets its own screen.
+ Owner salary add-back
The owner’s full package: salary, benefits, medical aid, retirement contributions. Added back because you are buying what the business produces for a working owner.
+ Family salaries above market rate
Only the excess above what you would pay an outsider for the same work.
+ Personal expenses through the business
Vehicles, travel, insurance, subscriptions. Common and legitimate to add back, but each item needs verifying.
− Once-off income
Asset disposals, insurance payouts, relief grants. Deducted because they will not repeat.
+ Once-off expenses
Legal disputes, relocation, genuinely once-off write-offs.
± Rent adjustment to market
If the premises are owner-owned and rent is above or below market, enter the adjustment to bring it to market. Positive raises earnings.
Generate the report
A free account is required to view the report. Your inputs are saved and restored after signup, and the report is stored on your dashboard so you can evaluate several businesses and compare them.
Frequently asked questions
How accurate is this valuation?
It's an indicative range from the figures you enter, not a formal valuation, and it is only as good as those figures. Sellers' management accounts are frequently flattering. Verify what you are told against annual financial statements, SARS filings and bank statements before you rely on the output.
What earnings multiple does the tool use, and where does it come from?
It depends on the business type: roughly 1.5 to 3.0 times SDE for retail, 1.5 to 2.5 times SDE for food service and hospitality, 1.0 to 2.5 times SDE for services and consulting, 2.0 to 3.0 times SDE for e-commerce, 2.5 to 4.0 times EBITDA for manufacturing, and 2.0 to 3.5 times SDE for franchises. These are indicative South African ranges, calibrated for small owner-run businesses, not a guarantee of what any specific buyer will pay.
What is SDE, and how is it different from EBITDA?
Seller's discretionary earnings (SDE) adds the owner's salary and other owner-specific costs back to EBITDA, because a small owner-run business's real profitability includes what the owner draws out. Larger businesses with a management team already in place are valued on EBITDA instead, since a buyer would still need to pay someone to run it. The tool applies the basis appropriate to the business type you select.
Is the Fair Price Evaluator free to use?
Yes. The tool and the analysis are free to use. Generating the downloadable report and seller question list requires a free account, but there is no payment for using the evaluator itself.
Why does the tool need three years of financials, not just the latest year?
A single year can be a groomed year: the seller's best year, timed to coincide with a sale. Three years lets the tool detect that pattern, and where it fires, it shows the equal-weighted figure alongside the recency-weighted one so you can see what believing the final year alone would cost you.
Does this replace hiring an accountant to review the business?
No. This is an indicative analysis that works entirely from the figures you enter and cannot verify them. Engage a professional accountant to review the target’s records before making any offer.