The Framers Forum

Abacus wrote:Contrary to the previous replies, I bought my picture framing business 6 years ago and paid quite a lot of money for it.

I'd suggest that that is probably in line with the previous replies... in so far as you bought a business with staff - rather than a one-man business. It's what IFGL wants to do - and he has a chain of shops.

I wouldn't expect you to say, but I wonder what was the ratio of annual profit to what you paid for goodwill.

There are comments here that make it seem you'd be doing a business - busy high street or otherwise - a big favour by taking their machinery and stock for a pittance and having the lease and everything else thrown in! It surprises me that some with this attitude actually run a high st business!

Just a few Things that would cost you - a lot - in either money, time or both - if you had to start from scratch.

Customer database
Supplier/service accounts with good discounts set up
The phone number
Website
Any specific computer software

Most of all though, the main thing that comes under 'goodwill' and that is the reputation - earned over whatever length of time - not of any individual but of the business/service.

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Roboframer wrote:'goodwill' is the reputation not of any individual but of the business/service.

Prospero and Graysalchemy run one-man bands with no staff (the latter may have some help sometimes?) and NYAF doesn't have much staff assistance. They all produce exceptionally high-quality craftsman work. If you buy their business, but don't keep them on, what do you think the goodwill of the business is worth? I'm valuing it at almost nothing.

I just imagine somebody walking into The Dartmoor Gallery after somebody has bought it from NYAF and having installed Kwik's former factory manager as the new 'manager'.

"Hi, you produced a mega-stacked water-gilded frame, I'd like another one exactly the same." "Errrr...."

After all, "goodwill is the reputation not of any individual but of the business..."

You buy a business to continue with it - why would you buy a business and change it in to something different?

It could be a new business owner could blow the previous one away - then add something that makes the business even more appealing to the existing customers ... who are worth paying for.

That's exactly the point! If you're buying a one-man-band business that is focussed on a craftsman who will no longer be involved then you would inevitably alter it. Hence the goodwill is associated with the one man, and the business - of itself - has little or no goodwill.

So, once the customers realise the owner has changed, they all do a runner?

Customer database - Unless they're high volume corporates or artists, it's not worth a carrot. Framing is a once-in-a-blue-moon purchase for most people.
Supplier/service accounts with good discounts set up - might save a bit of legwork, but I'd want to go back to the drawing board and choose suppliers based on my needs.
The phone number - I doubt many people keep their picture framer's number in their phone book!
Website - As mentioned before, unless the business has a worthwhile online presence and revenue stream, not worth a carrot.
Any specific computer software - Easily bought, it would only have second-hand value as a business asset (assuming the license could be passed)

I know I'm wasting my manicure so I'll just pick one out.

It took me years to get a 35% discount from one top supplier - plus discounts of over 50% on certain items - you start with a new account and list price and earn your reputation with them if you like but I know what I'd prefer.

when you start a business from scratch it will take a few years to get going, the vast majority fail in the first year.

May I be so bold as to suggest that if you're the type of person that can make a business fail in 12 months, you'll do it regardless of whether it's a new start-up or a going concern.

I can see both sides of this discussion - when we set up our business it didn't occur to us to look to buy an existing business, we didn't even look to see if one was for sale, we just started from scratch. At the same time 2 other framing businesses opened within 5 miles of us, all of us opened in the same month and all new start ups. One closed after less than a year, the other one is still going and is now on its third owner, so clearly there is a market for purchasing an existing framing business and keeping it going and I can think of quite a few examples locally of framing businesses that have been bought as going concerns.

There are 3 picture framers for sale within about 15 miles of us now, one of them was advertised on this forum fairly recently. All are asking very different prices and all are very different set ups from each other, it will be interesting to see if any of them are successfully sold.

Unless you start up at home or have some other means of income starting any new business from scratch is tough, and consumes serious money, it does all depends on what level you want to go in at, also the data about how often customers have something framed is very flawed, it is based on an average of everyone, most people will never have anything framed, the one's that do I have found to be very good regular customers, their loyalty tends to be with the establishment not with the framer, occasionally we get a cucumber (don't you love predictive text) who asks for a particular framer most don't mind which does it.

In reply to jamesnkr (I'm unable to quote a post ) the good will was approx 2x profit (the total cost was 3x profit)

There is a lot to be said for the public knowing "there is a framing place on the corner of that street" I would be happy to buy a existing business and change the name. Id be more concerned about the equipment being cared for if the business was going bad or the owner has lost interest.

Abacus, very interesting thank you for sharing.

So that means every penny of profit you make in your first two years is given back to the previous owner of the business. It makes an interesting comparison with the effort of opening your own shop from scratch.

There is a lot to be said for the public knowing "there is a framing place on the corner of that street"

The flip side of that would be the amount of business a new shop on the high street can generate. I often have customers tell me they've had stuff to frame for years but didn't know where to take it until my shop opened... That is in spite of there being an existing framer (albeit badly advertised) in the same town!

I even had a customer from a shop 15 yards away from my competitor say the same thing...

"Occasional purchase shops" like framers can become "high street wallpaper". People pass them every day without noticing them. It has to be said that this is partly down to the owners not keeping their displays and signage fresh, but it definitely happens.

As with all things, there are swings and there are roundabouts...

Hi Nolan

give us 24 hr notice so we can meet up in Gloucester or Cheltenham.
It'll give me a good excuse to escape the in laws for a couple of hours.
cheers
mark

With regard to the "returning customers/only get something framed once in 18 years" question I've analysed my customer database and here are the results:

Number of (as best I can tell) unique customers in the last 4 years: 3709
Number of customers who only visited once: 2205 (this may include a few misspelt customer names)

So approx 40% of our customers are repeat business.

(64 came more than 10 times, but 33 of these were "trade")

Not only that, many of your other customers will come from recommendations, they won't know the owner has changed.

Abacus wrote
"So approx 40% of our customers are repeat business"

or looking at it another way 60% of your customers have never returned just joking

You can do a lot statistics