valuing my business to sell - help

Hello. I own an online-based business. There is almost no
overhead...about $2,500/month in expenses. Basically the company sells
access to a web site (no it is not ****) for a very desirable, high
priced product. I only have to put in around 15-20 hours per week
worth of work.  The business has a net income of $125k/year.

I've been considering selling this business because I want to go onto
other things and I need some operating cap for a new venture. I really
don't know how to put a value on the business. So far a good friend of
mine has offered me $200,000 cash.  But that seems too low considering
taxes and the annual income. It's less than 2 years net.

Any suggestions on valuation and what the lowest amount should be?

I hate to sound arrogant but it is a gold mine considering the income
and lack of work involved. I just want to go onto other things.