[pianotech] The value of a customer list?

[Farrell]

Hi Dianne,

I have an experience to share, maybe it will be of value. During about my second year in business, an olderly local long-time tech passed away suddenly. His widow wished to sell his business. I bought it as I was new in the business and was eager to expand my customer base.

The tech's son added up the service sales for the past year. I paid 50 cents on the dollar of the past year's sales for his box of 3x5 cards (client name, phone, address and piano service history) and a letter of introduction sent by his widow to each customer in his database ("I wish to introduce you to Terry who will do a fine job taking over services for my husbands piano clients.....").

I found that the arrangement worked well for me because I had the need to expand my customer base AND I could easily absorb the additional work - he was semi-retired and only did $10K of service work the previous year. Looking back on the arrangement, if anything, IMHO, the price I paid was a little on the high side as about 2/3 his client base scheduled appointments with me.

If I was more established or his business was larger, his business may have been of less value to me. IMHO, a business of this nature is worth less than some may think - maybe somewhere in the 25 to 50 cents on the dollar would be closer to actual value.

Hope this helps.

Terry Farrell
  ----- Original Message ----- 
  From: Diane Hofstetter 
  To: pianotech at ptg.org 
  Sent: Sunday, March 01, 2009 3:51 AM
  Subject: [pianotech] The value of a customer list?


  John Cook, RPT, Portland, OR Chapter, passed away recently after a sudden illness.  John was a gentleman and a fine technician.  I liked him a lot, but am leaving it to others who knew him more than I did, (since I have only known him a short while), to write more about his life.  
   
  Why I'm writing here is to ask your collective (and individual) advice for his wife, Fran, who needs to sell his business.  What Fran needs help on most is his customer list.  She wants to sell it to one (or more) responsible technicians who do the same high quality service that John did, at a price that is fair to both her and the buyer.
   
  I have researched the archives and printed out the answers to a tech who wanted to know the value of his business because he planned to retire.  Our chapter president has contacted home office, but, according to Fran, they could not give her much help.  So, we hope you all have some actual experiences, or creative ideas, to help Fran out.
   
  Thank you,
  Diane (who will show Fran how to subscribe to pianotech)

   
  Diane Hofstetter


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