A piano tuner recently moved to Buffalo, NY, and would like to assess the business possibilities for him in his new home. He plans to estimate how many piano tuners the greater Buffalo area can support, and compare that to the number listed in the phone book. How do we advise him as to how to estimate the "right" number of tuners for the area?
One approach is simply to guess. Would it be 1, 10, 50, or 100? Are you comfortable with this approach? I am not. An approach I would be comfortable with would be to search for data on estimates of how many piano tuners per capita there are in the U.S., and apply that ratio to the Buffalo area population (let's use 1.3 million). Is data on this likely to be available? Test your resourcefulness by trying to find it.
Assuming that data is not available, we must go to the "some assembly required" approach to estimating, that is, deriving the estimate from data which is available modified by related local and national data, norms, and "rules of thumb." While this seems so indirect as to be little better than just guessing, it can be a very useful exercise. If nothing else, it causes us to identify some important variables and how they relate to our business of interest. The inaccuracies of compounding estimates can be minimized by working in ranges to give us a "ballpark" figure.
How can I derive a meaningful estimate from generally available information? It would be interesting to know what percentage of American households own a piano, and how often they get it tuned. If the data is national, we may need to apply some local adjustment factor. Given the annual number of piano tunings, we can divide by the annual capacity of a tuner to determine how many are needed.
I will do an "off-the-top-of-my-head" calculation to illustrate the method, then leave it to you to provide real values:
Buffalo has about 400,000 households population divided by 3 members average); 8% of American households own pianos. I can think of no reason to apply any local adjustment to this figure, so we are talking about roughly 32,000 pianos. My guess is that two-thirds of all pianos are merely furniture, so that the remainder of about 11,000 are played regularly and in need of tuning. Tuners recommend that a piano be serviced twice a year, but my guess is that the average is probably once a year for active pianos, or 11,000 tunings per year.
A tuner can service 2 to 4 pianos a day; let us say 3 per day, 5 days a week, 50 weeks a year, or 750 tunings per year per tuner. To provide Buffalo's 11,000 annual tunings would require almost 15 tuners. The phone book lists 9. Sounds promising!
How do you like this? How many would you have guessed without this analysis? Does the result seem reasonable? Enough on which to base the opening of a business?
Could it have been done more scientifically? How? Would discussions with piano tuners and music stores have been useful? Are there any journals worth consulting? Would a survey have helped?
Are pianos in places other than homes? Are there tuners not listed in the yellow pages?
The Census of Retail Trade provides the average number of stores per capita for a variety of retail outlets. Based on their data, we can determine how well our proposed market area is served on a relative basis for the type of business we plan to start. For example, there is, on average, a stationery store for every 33,000 people; for every 26,000 people there is one bookstore and one nursery and garden supply store. The population can presumably support a barber shop for every 2,200 residents, and a furniture store for every 3,000.
john b. vinturella, ph.d. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites john b. vinturella, ph.d. and john b. vinturella, ph.d., and maintains business and political blogs.
executive chauffeured services Bradford .. Madison to Airport carIf you've ever listened to Warren Buffett talk about investing,... Read More
ACTION PLANNING: Action Planning is a process to develop strategies... Read More
Experts estimate that 90 percent of Australian businesses are overspending... Read More
As a business owner, you've likely created a hurricane plan... Read More
Diversify - to make diverse, give variety, to balance, to... Read More
What gets measured gets done.How do you keep your business... Read More
Although North Americans were the dominant population on the Internet,... Read More
No matter what product or service you provide you will... Read More
You know you need a business plan. You probably realize... Read More
We all know that nothing runs without a plan, and... Read More
How you finance the expansion of your business is important.... Read More
If you are looking for a partner, funding, angle investor... Read More
Some analysts credit [Larry] Ellison with anticipating the consolidation in... Read More
Scenario OneDuring a recent presentation, a business owner was given... Read More
Business plan financial projections seem daunting because they are so... Read More
Business owners and entrepreneurs are, by nature, risk takers and... Read More
When someone mentions business planning we have been conditioned to... Read More
There is a story, about a business owner who wasn't... Read More
If you own a pressure washing business one of the... Read More
More than $117 billion passed hands from Internet shoppers to... Read More
When looking at Akron carefully one cannot help but notice... Read More
Ask Yourself three simple questions that affect your strategy planning...... Read More
There are no "rules of thumb" in the pursuit of... Read More
Does your overall business strategy include the recruitment of college... Read More
When in doubt, cut that out! Yeah, yea, doubting Thomas... Read More
O'Hare Chicago prom limo ..Every new business owner knows that a business plan is... Read More
As a business owner, you've likely created a hurricane plan... Read More
These may sound like no brainers, but you'd be surprised.... Read More
Business planning is widely acknowledged as one of the keys... Read More
"I don't need a business plan."Neither did Alice in Wonderland."Would... Read More
Is there a 'magical' way to exponentially grow your business?It's... Read More
The University of Exeter in the United Kingdom recently published... Read More
Note to Northwest Airlines ? It's not about fuel costsFor... Read More
Have you ever done a SWOT analysis? No, it's not... Read More
The first step in starting a restaurant is proper planning.... Read More
ACTION PLANNING: Action Planning is a process to develop strategies... Read More
I recently took an organizational behavior class where my professor... Read More
Do you work in or own a business that's affected... Read More
Every decade we seem to come up with a buzz-word... Read More
Writing a business plan can be tricky when all the... Read More
With the help of balanced scorecard strategy map, it is... Read More
Fun From The StartFor those with the will to start... Read More
A significant advantage of some business ideas is that the... Read More
The boom of the dot-com era in 1999 brought the... Read More
When you start your program to purchase your "ideal" company,... Read More
I am not a big fisherman, but I do enjoy... Read More
"Did you hear what your competitor is doing?" This question... Read More
I am surprised how few sales professionals, independent consultants, and... Read More
To Grow (Catapult) Your Business That's Why.When it's in your... Read More
Private equity firms have raised so much capital over the... Read More
Strategic Planning |