What are you buying?
Assets or shares?
If assets, how much for goodwill? May be paying too high if management/employees don't stay, clients are not repeats and no name brand.
If shares, what is its liquidation value (what you get if you sold all its assets and paid all its debt)? How many years' earnings is the price per share?
You may be able to arrange a buy-out over 3 yrs with price dependent on earnings but how do you get true earnings in a cash business?
Is biz locked into a lease? If so, they should be paying you to take over lease!
150,000 for 40,000 means about 4 yrs to get all yr money back. Is this too long?
Conclusion: Do yr number crunching. Is yr money better parked elsewhere with guaranteed returns? Is this a hobby or investment? Can you start a new company?