Something I learned many years ago was the a business is worth two to three times of the yearly profit it makes. People buy a business to make money. Make enough money to own a home and some toys, and most important enough money to live well during retirement. Most people will own a business for twenty years. This is why when a business is bought it needs to be paid for in two years. You will need those eighteen years to build up a retirement fund and pay off the mortgage on one's home. So one buys a business he can retire at 60. Joe buy's a business at the age of 40. He needs ten years to pay off his business then he will still have to work for eighteen more years. Because Joe paid too much for his business he will have to work till he is 68before he can retire. What happens if Joe has a Heart condition at 62 and is forced to sell? His retirement plan will be under funded by 6 years. So if a business is bought it must make enough profit to pay Joe a salary and pay off the business in two years. The three years comes in for an exceptional business. Gas station location. On the corner of the two busiest roads in town. Or right next to the on off ramp of the Interstate. Another exceptional business is profit margin. Say most restaurants in town operate on a 12% profit margin. The restaurant that you want to buy has a consistent profit margin of 24% for the last ten years. You are actually buying the land the business sits on as well as the business. Most Landscape company's are one truck, one trailer, two mowers, some hand helds. All of that is usually used and no yard with a shop is included in the sale. And even if there are contracts many LCO's here always advocate contracts with a 30 day cancelation clause for both the LCO and the customer. Having customers being able to leave after 30 days is only buying 1 month of income and that is not going to pay off any business. Even if the customers are locked into a 1 year contract is not much better because one year of income will not pay off the business. So whether one month or one year you can be left holding the bag. I suspect many a business that is for sale. If a business is such a gold mine why is the owner selling it? People do not get rid of gold mines that easily. Why is the owner not passing his gold mine onto his son/daughter? Owner has no kids, why not a nephew or niece? No relatives, why not a long term trusted employee?