Should I Sell The Business?

Over the last 7 years, I've built a successful small business. In a good year, it earns me about $250 - $325K, but it's in an industry that's highly susceptible to economic swings. I was just offered $1.2MM for it. Given where we are in the economic cycle (lots of downside risk in the economy, or it feels like that anyway), I want to try to take it if I can, especially since I am totally burnt out on my business after years of working way too hard.

Outside of the business, I have some real estate that cashflows around $80,000 per year. The cashflow will decrease substantially in 4-5 years when I need to refi the commercial loans, if interest rates haven't decreased again by then (most of my commercial interest rates are in the 4%-5% range).

I'm calculating that if I take the $1.2MM, I'm going to lose about $240K off the bat to taxes. I also have about $60K in back-taxes that I need to pay off. And I have $500K in debt that needs to be paid off. So that would leave me with $400,000 to invest after taxes. I have another $~600K cash laying around already, so that leaves me $1M to save and invest. My home is mortgage-free (though I'm in a high property tax area so the taxes are essentially a small mortgage).

Here's the scenario. If I can earn $150K pre-tax, then I can live a modestly comfortable life and save $25K per year. The amount I earn needs to increase each year with inflation.

My real estate gets me $80K of that $150.
I believe I can prudently invest the $1MM at 7% and it will get me the rest of the way to the $150K. Some higher, some lower. A friend borrows money from me at 12%. Some would go in a money market fund at 3.75% Some would go into stocks that don't earn anything, but which will hopefully grow in value each year.

Am I dumb to trade a business that cashflows $250K+ for cash that ultimately dwindles down to $70K per year in (mostly effortless) income, essentially? Or is the option value of having free time again + cash that could be invested into something new worth it? And keeping in mind, I could go out and get a job again if I had to, though I'd prefer not to.