Buying Customer List or Existing Business

[Paul McCloud]

Hi, Tom:
    This tuner is a very well respected member of the music community.  He would not compete with me, because he's old and ready to retire.  His health is beginning to fail, as well.  He's not going to "restart" his business.  Besides that, he's a personal friend.  And he's going to sell out all of his tools, supplies, etc.  A non-compete clause sounds like a good idea, under normal circumstances, but in this case, I really don't need it.  
    I like your "sweet and simple" idea.  I'll need to have access to his financial records and see exactly how his business is doing.  He's got a real live-wire accountant that I'll have to contend with.  She "rules the roost" when it comes to his business, so I may need some backup on my side.  I'm sure he'll try to get every penny he can.  After all, he's had a successful business for more than 50 years, and is probably counting on this for at least part of his retirement.
    As always, I appreciate your comments.
    Paul


----- Original Message ----- 
From: Tom Servinsky 
To: pmc033 at earthlink.net;Pianotech List
Sent: 10/25/2008 4:04:46 AM 
Subject: Re: Buying Customer List or Existing Business


Paul,
This sounds like I lot of trust would have to be placed on  both of ends. The both of you could end up in a troubled business relationship which might never, ever get resolved.
I purchased a client list 24 yrs ago and at the basis of our agreement was that I would get his card file, and welcoming and introductory letter from him introducing me to his clients, an agreement to non-complete clause, all for 10% of his latest income tax filed amount.
I had to establish my own phone and it was up to be to make the sale to the future customers that I would be their guy.
What I learned was that the agreement to non-compete is only as binding as you are willing to sue if the breach of contract is substantial. You'll have to figure in the time and expense of trying to enforce the agreement. You'll also be the one doing the detective work if you suspect he's trying to go after your current customers. The tech I purchased the list from used to come back to our area for a short vacation and start calling all of his former clients, my new current clients. Luckily I was able to nip it in the bud and called him on it. I reminded him of our agreement and  threatened to sue if he continued. He still did this little game for several years after, but after a while it wasn't a big issue for as my business soon flourished.
My advise would be to keep this as simple and sweet as possible. Figure how much tuning work he actually did, figure out how many of those were absolute regulars that you could potentially count on, and then figure on offering him 10% on those potential clients and call it a day. I would include the non-compete clause as part of being a good businessman, but don't bank on really having that have much teeth to do be effective. Tuners can be sly foxes when they need to be as they don't need a store front to operate out of. 
Just my 2 cents.
Tom Servinsky
Tom Servinsky
----- Original Message ----- 
From: Paul McCloud 
To: Pianotech 
Sent: Friday, October 24, 2008 8:49 AM
Subject: Buying Customer List or Existing Business


List:   
    I have been offered first dibs on a piano business that has been gradually downsized over the past several years.  The owner, retiring at the end of the year, has been a technician for 60 years, most of which were spent here in San Diego.  He used to have a store location with various new and used pianos, but has given up piano sales, and does part time tuning.  What he's offering is his customer list, a few rental pianos (returned), tools and supplies, and a few odd piano benches and other accessories.  I know there has been some discussion in the past about purchasing an existing business or customer list, but I can't seem to find much in the archives.  Maybe I need a better search keyword.  
    I'm leaning towards some kind of arrangement where I would pay for any customer on the list that actually becomes my client.  Paying for  a couple thousand names where most of them are dead, moved, or otherwise useless to me doesn't make sense.  I've got plenty of those anyway.  I'm thinking that I would pay a certain amount for any client I got from his list that actually became a customer.  I could put out a mailer that would introduce me to his clients, asking them to call me for their next service.  Someone suggested to ask if he has a list of his most recent customers, and how much business he has done in the last year with them.  That figure would tell me what I could expect to make if I did purchase his list.  I'm also keen to acqure his telephone number.  He has moved into the shop where I work, and has a corner of the room.  When I'm there, I hear his phone ring and I listen to the p! hone calls that come in as his answering machine takes messages.  
    If any of you could offer advice, I'd be very glad to have it.
    Respectfully,
    Paul McCloud, RPT
    San Diego, CA



Paul McCloud
Service Technician for PianoSD.com
www.pianoservsd.com 
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