Buyer Tool
Buying a business is a capital allocation decision. This calculator projects the payback period, IRR (internal rate of return), and equity multiple for an Australian business acquisition — and compares those returns against what the same capital would achieve in the S&P 500 or Australian property over the same hold period. Know your numbers before you sign.
Conservative: 3%, average: 5%, optimistic: 8–10%
Conservative: 2.5–3×, market: 3–4×, optimistic: 4–5×
Private equity firms typically target 20–30% IRR for SMB acquisitions. Individual acquirers are often satisfied with 15–25% IRR given the operating involvement required. The key benchmark is whether the deal outperforms passive alternatives (index funds at ~10% pa, Australian property at ~7% pa) enough to justify the work and risk of running a business.
For a business purchased at 3×–4× SDE or EBITDA, the payback period (time to recoup purchase price from cashflow alone) is typically 3–5 years before exit. This assumes no growth and full cashflow distributed to the owner. Growth and exit multiple expansion significantly improve total returns beyond the payback metric.
Conservative analysis assumes a flat or slightly compressed multiple at exit (2.5×–3.5×). Optimistic scenarios model multiple expansion — buying a distressed business at 2× and selling a grown, systematised business at 4×. The safest approach is to model your base case at entry multiple minus 0.5× and see if the deal still works.
This calculator shows unlevered returns (all-equity purchase). If you're using acquisition debt, your equity IRR will be higher (leverage amplifies returns) but your risk profile also increases. Use the Acquisition Loan Calculator to check debt serviceability first.
ThatDeal's intelligence reports include a structured deal summary with key financial metrics, comparable sales data, and red/yellow/green flags on the deal thesis. We call the broker on your behalf to get the normalised financials and growth story before you commit time to due diligence. See a sample report →