A Rough Cut on Feasibility

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 jbv.com and muddledconcept.com, and maintains business and political blogs.

In The News:

strategic planning | American Veterinary Medical Association  American Veterinary Medical Association
SLE to start strategic planning process  Seeley Swan Pathfinder
What's your game plan?  Today's Veterinary Business Magazine
NID seeks public input on strategic plan  The Union of Grass Valley
Ridgemont FFA members participate in strategic doing workshop  Ohio's Country Journal and Ohio Ag Net

During the election we heard about Ohio?s Economy

Much of what we heard in the mass media about... Read More

Creating a Vision That Achieves Results

How important is a vision statement to your company or... Read More

Business Plan: The Simplest Business Plan Ever

If you're a solo professional like I am, you know... Read More

Clearing the Path: 4 Ways Fear Wreaks Havoc on Your Dream and What to Do About It

Please take a moment before you read any further and... Read More

Under Construction During the Storm ? A Hurricane Guide for Businesses that are Under Construction

As a business owner, you've likely created a hurricane plan... Read More

Business Results - Four Critical Success Factors

Scenario OneDuring a recent presentation, a business owner was given... Read More

How To Prepare A Business Plan That Guarantees Big Profits

It is always said "If you Fail to Plan, you... Read More

Ten Steps To A Great Strategic Plan

Ask a small business owner about their strategic plan and... Read More

Are You Aware of Planning in Business?

Human beings are rational agents. Rationality endorses one to take... Read More

Buying Used Detailing Equipment and Rainy Day Services

Mobile auto detailing equipment becomes very inexpensive around March each... Read More

Who is Responsible?

While writing an article recently on effective ways to bridge... Read More

Making a Decision to Outsource: Strategic Constraints

Many companies are reluctant to dive into outsourcing ocean because... Read More

The 7 Critical Steps to Formulating Your Annual Strategic Business Plan

Businesses tend to avoid doing their annual business plan thinking... Read More

Corporate Venturing For Emerging Growth Companies

The boom of the dot-com era in 1999 brought the... Read More

Akron OH; A great place to do business

When looking at Akron carefully one cannot help but notice... Read More

How to Write a Business Plan in Five Steps

People often ask "What makes a good business plan? Or,... Read More

Top Reasons To Form A Strategic Business Alliance

A strategic alliance is when two or more businesses join... Read More

5 Strategies That Will Boost Your Business Productivity Today! - Part 1

Building a dynamic small business is a constantly evolving, increasingly... Read More

Microsoft Great Plains in Aerospace & Defense industries ? implementation & customization highlights

Microsoft Great Plains fits horizontal markets clientele and in case... Read More

Why Create an Annual Plan?

Can you imagine going on a road trip without knowing... Read More

5 Strategies That Will Boost Your Business Productivity Today! - Part 2

Growing your own small business can be one of the... Read More

Fail to plan... or Plan to FAIL??

Running a business, whether it be an offline multi-billion dollar... Read More

Communication Strategy During A Time Of Strategic Planning

"Rubbish!" shouted the large, aggressive man in the red-striped shirt... Read More

Breaking the Growth Barriers in the Information Technology and Software Sector

There's nothing automatic about corporate growth, particularly in the information... Read More

Business Ideas: 3 Smart Ways To Generate Profitable Business Ideas Anytime

Creativity is one of the greatest tools for success in... Read More