A retailer I am going to call Pete rang to say he was interested in purchasing a post office. He had been through the interview and was doing the modules. He had found a likely freehold in Derbyshire, on the market for £170K. The goodwill element of that was £80K. His solicitor thought the goodwill was on the high side so Pete was seeking a second opinion from me.

First, I armed myself with all the details I thought a specialist might need. The PO is about 428sq ft and terraced between two houses and has two bedrooms and a bathroom upstairs. Barclays Bank valued the bricks and mortar at £88K.

The business had recently been converted from a £33K salaried branch to a commission-based one. In the process of transformation, the premises had been completely refurbished. It is licensed and has the National Lottery.

The Post Office had confirmed that the turnover would never go below £1,800 a month whereas the owner (selling up to move back home) said it never went below £2.3/2.4K. Pete has seen the books, which show that the net profit for the whole operation, including the shop, was £25-27K per annum.

None of this sounded bad, but Pete says: “I will be taking a big loan and there will be a charge on my existing property. My solicitor says ‘be careful, you are risking everything’.

I went to the best experts in the business, Christie & Co, and got a full response from Jon Booth, who instantly disagreed with the solicitor (refreshing). “The price feels right on the money,” says Jon. He added that, even for an ex-mining town in north Derbyshire, the bricks and mortar value felt low for a shop of this description. “However,” he says, “if there is a valuation there is a valuation!”

Now his reckoning: “From the point of view of our agency team’s work, and without access to the full accounts, the value of the goodwill is calculated on 8-10 times the weekly shop sales, let’s call it £45K (9 x 5,0000 per week) plus 1-2 times the PO income, which if we assume is likely going to be an average t/o of £1,900 per month or circa 23K per annum, which based on the previous PO salary of 33K seems very conservative, then there is an argument for the goodwill element of the PO at c.£45-£48K.”

He concluded: “The price seems fair to me and if a bank has agreed to finance this, then it speaks volumes, as funding is far from easy to acquire currently.”

In a follow-up email Jon added: “If the funding has been made available and assuming the purchaser passes PO Ltd criteria then the lawyer should get down to business asap and leave price advice to a finance expert. Ultimately, 180K doesn’t feel like a lot of money for a two-bed home with a circa £300K turnover business downstairs.

He also asked me if I had been watching Signed, Sealed, Delivered on BBC2, which was on at the time of our exchange of emails. I’ll say - read on.