What's It Worth?

[Alan Barnard]

I once analyzed and considered this question for several days. The results of my pondering?

I would NEVER under any circumstances pay anyone, ever, for any client list. I believe it has almost no value, whatsoever.

Wow!

In any business, a customer or client list has only limited loyalty to the company. If the company changes---especially if the company is one person---ALL of that loyalty instantly disappears. The new owner (or in this case, any new tuner) must build his own lists and loyalties and referrals one customer at a time.

There was a piano store, Baldwin dealer, in my little town for four generations. They offered to sell to me. No, thanks, says I: Your piano business is supporting your small, dying retail business and I don't want to sit in a building trying to sell guitars and such against much larger stores not too far away and against the growing Internet.

But, says them, you'd get our piano customer list! Whoop-di-doo. No thanks.

They sold to a non-piano person who really wanted to sit there and sell guitars---no real interest in learning the piano tech line. He went under chop-chop.

Meanwhile I, who really do not advertise in any way other than business cards and word of mouth, have gradually built up a base of customers as loyal as can be expected, i.e., some very loyal, some casually loyal, some fickle, and a few whom I'll probably never see again. And my list includes many from the old piano shop.

Moral: If you leave town, the other piano guys will QUICKLY gobble up your list. And someone who paid you for a sneak peak---even with aggressive telemarketing to announce "Ta Daa" that you are in business---will have very little advantage.

Sorry, that's how I see it. In another business life, I used to share an office building with a business brokerage firm and they flat told me: A purely service or consulting business has no real value beyond it's tangible, physical assets---and even they must be discounted severely to attract a buyer.

Now I know that some have sold and others have purchased tuning businesses, and I think it would be great if they'd share their thoughts and experiences. But from what I learned, and from my own experience, I wouldn't pay dime.

Alan Barnard
Salem, Missouri


----- Original Message ----- 
From: Terence Miller 
To: pianotech list
Sent: 05/25/2006 9:39:02 AM 
Subject: What's It Worth?


Dear List:

Suppose you're an experienced Technician and you came into a new area. It wasn't easy but over 5 years you built up a practice from the ground up, in this rural/suburban setting, of 500 or so of the usual mix of clients: great, good, and maybe not-so-good. Something has come up, and you've got to leave town.

There are a couple of Technicians in the area, and a couple of tooners. Your 'book' isn't huge, but it would be a boost to any of them.

You want your clients to be well taken care of.

You could use some cash.




What's running through your mind?
What's it worth?
What should you sell it for?
What kind of deal makes sense?

OR

If you were one of the Technicians or tooners:
What should you pay?
How and when should you pay it?




Terry Miller

(think succession planning)





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