Yeah, more like .7-1.2x annual revenue. And the only time a buyer would be willing to base the price on revenue is if he thinks you're a crappy manager and he can do much better.
The reliability of the earnings stream is the key. With many small businesses, the owner is so intertwined on both the sales and expense sides that it's hard to get an accurate arm's length view. When the owner leaves, will the customers still be customers? VERY important to show that.