Right, so I think that's the reason why the standard Income line is replaced with Seller Discretionary Income. Since it's assumed that there is very little actual work on the new owners side, all of the income of the business becomes profit. You'd be investing 1.6-2.8x an earnings of 65k, with the assumption that 1) the business would continue growing and 2) you wouldn't have to put any work into it. If the business continues to run as is, you'd get your money back in 1.6-2.8 years and the rest would be your return.
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Right, so I think that's the reason why the standard Income line is replaced with Seller Discretionary Income. Since it's assumed that there is very little actual work on the new owners side, all of the income of the business becomes profit. You'd be investing 1.6-2.8x an earnings of 65k, with the assumption that 1) the business would continue growing and 2) you wouldn't have to put any work into it. If the business continues to run as is, you'd get your money back in 1.6-2.8 years and the rest would be your return.