Everything starts from zero!
Knowledge: formulas and tips

how to evaluate the business before buying: ROI and payout period

how to evaluate the business before buying: ROI and payout period
AdvertisingECO-FLOOR — ლამინატი 32 კლასი — 1 მ² 24 ₾-დან

the price of a business is not just the sum of the property — it is primarily the value of future profits. here are some basic tools to quickly evaluate any listing.

1. Net monthly profit

profit = Income − (Lease + Salaries + Products + Utilities + Taxes + Other Expenses)

request data from at least the last 12 months — seasonality is often important.

AdvertisingARKA სტუდია — ინტერიერის დიზაინი ახალი ბინისთვის

2. Payout term

remuneration (month) = Business price ÷ Monthly net profit

example: Price 120,000 ₾, earnings 5,000 ₾/month for → 24 months. For small businesses, 18–36 months is often considered reasonable.

3. Annual ROI

ROI = (annual net profit ÷ investment) × 100%

in the above example: 60 000 ÷ 120 000 = 50% annually.

4. Multiplier

small businesses sell frequently1.5-3 times the annual net profit price. A higher multiplier is justified if the business is growing rapidly, has a brand or long-term contracts.

5. Assets and balances

calculate the cost of equipment, merchandise, and furniture separately. Ask: Is it included in the price?

“Red Flags”

  • numbers only verbally, no documents.
  • income that suddenly increased before the sale.
  • short term or unformed lease.
  • owner who does not allow on-site surveillance.

the article is informative and does not constitute financial, tax or legal advice. Consult with a specialist before making an important decision.

NULI.GE — It all starts from scratch! Seeactive listings: Business, business ideas and investment offers for sale.

Advertisingხელოსანი 24 — სანტექნიკა და ელექტროობა
Share: Facebook LinkedIn

Leave a Reply

Your email address will not be published. Required fields are marked *

AdvertisingLUMA LED — ჭაღები, ზოლები და ჭერის განათება
💱 Official rate of the National Bank of Georgia (14.11.2026): 1 $ = 2.5934 ₾ · 1 € = 2.8649 ₾ — updated automatically every day.
Company ID 442265512 · Tbilisi, Georgia · broker@nuli.ge · +995 511 14 55 33
👥 Total 75📅 Today 21Online 1