Growing A Pool Company - Are You Sinking Or Swimming?
How do you grow a successful swimming pool company in 2019? Strangely the problems that many newer and growing pool companies face today are the same problems that growing pool companies faced 30 years ago. While the technology and the job has changed dramatically in recent decades, many of the problems of the past still exist today with newer or growing pool companies. I was fortunate having been born into a family enterprise of pool builders and business owners. I have had access to professional mentorship throughout my life, well before the first thoughts of running my own company had ever come to mind.
Unfortunately most people are not so lucky to have access to experienced industry professionals who are interested in helping you grow your own business. One of the hardest parts of being in business for yourself is learning what not to do. Without mentorship then you would be required to literally learn every lesson "the hard way" which in the world of business means that you are going to put your business and livelihood in jeopardy time and again. This is the reason that I have written this article - I want to share some of the lessons that were taught to me when I started my own swimming pool company. Hardly a comprehensive list, but more a collection of pro tips for people who want the most chance for success with their new or growing pool company.
1) Raise Your Prices
If you want to be a success in business you need to stop giving away the farm. Now I do not mean that every last person reading this should increase their prices tomorrow. This suggestion is aimed at the people who consistently go above and beyond for their customers. If you are constantly amazed with how unprofessional other companies are, or you notice that you are more technical, more thorough, more detail oriented - by all means charge more than the other guys. Throughout my career I have billed my time out at top dollar, most often being the most expensive hourly rate and project total for my bids, and I never had trouble filling my schedule. People are willing to pay more for professional service. Raising your prices when you really are good at what you do is the only way you have to tell customers upfront that you are better than their other options. DO NOT undersell your time and quality.
But if I raise my prices then I will lose out on business - Yes, if you raise your prices and tell your customers that you cost more because you do a better job than the competition, then you might lose some customers. Fortunately the type of customer that you might lose is the exact kind of customer that you are trying to avoid as a business owner...one who does not see value in your services. Some people want to pay the least and really do not care if you do a better job than the next guy or not. So let that customer be the one you lose, and make up the difference with an increased profit margin on the projects you do get. This will allow you to provide even greater levels of service to the clients that you do work with.
2) You Are The Expert
It amazes me when I see pool companies post online about a totally dilapidated pool or pool equipment along with comments about how the pool owner refuses to upgrade or renovate. What this does is that it reveals that you are not really all that good at your job. Your JOB is to be the swimming pool industry expert. That is why this customer is paying you. If you fail to be able to explain why a dilapidated pool or failing equipment needs to be replaced or upgraded then this shows your lack of experience or ability to explain the technical nature of your industry to the customer. Now there are certainly some pool owners who will not listen to reason regardless of how much sense you try to talk into them. Granted. But I contest that in the vast majority of cases you, as the industry professional, need to learn more about how to create a compelling argument for when, and why, an upgrade may be in order for their pool.
I told them to buy a variable speed pump but they couldn't afford it - When I hear a pool company talk about a customer not being able to afford a variable speed pump it makes me cringe. There are lots of reasons why you might not get a VS pump that you could argue...but this is not one of them. The reason you get a variable speed pump is because it saves you money. So a customer told you that sorry, money is so important for me I can't buy a variable speed pump. And you accepted this answer? Selling a variable speed pump is about as hard as selling a real life money tree. If you learn the technical nature of how these pumps save electricity costs your sales ratio should rise quickly to around a 95% or so. Start here with this breakdown of how a variable speed pump saves money and learn about the logarithmic reduction in electrical draw versus a linear drop in electric motor RPM.
3) Be Ready To Walk Away
In the above example I talked about how you, as the industry professional, need to convince the customer how, when and why to take care of their pool. As part of this example I addressed that some customers simply can not be reasoned with and despite all of the sound technical advice in the world they simply will not listen to reason about their pool. This is the point where you walk away. Do not change the way that you conduct yourself professionally to meet the unreasonable expectations of a minority of pool owners. If a pool owner does not see value in the professional advice that you are giving them then you are better off to walk away completely. If you tell a pool owner something, then you are the professional. If a pool owner is the one telling you how to work on the pool then you are not a professional, you are a laborer.
How am I supposed to make money if I am just walking away from jobs? - Walking away from jobs is a critically important aspect of owning a pool company. It is true that every pool owner has a story about a nightmare pool company...well every pool company has about a hundred of these stories about crazy pool owners. If you want your pool company to succeed you need to avoid these problem customers at all costs. If you are not walking away from any jobs then it is a matter of time before you find yourself working for someone that you clearly should have walked away from while you had the chance. Once you take on the job now you need to see it through to completion no matter what.
4) Never Go Out Of Pocket
If your company takes on larger construction, renovation or service contracts then it is simply a matter of time before you encounter a customer that you simply can not please, and ultimately will not pay their bill. If you went out of pocket on a job like this you could find yourself owning a liability that you have no use for and the company you owe will not take the product(s) back. If you are going to be in business in the pool industry you need to learn how to structure your draw payments such that you never are out of pocket for a project. This is 100% possible to do if you know your process and prices well enough. When a purchase, order, or custom product is needed for a pool, then you need to have money from the customer in your possession that covers the full value of this liability. In a worse case scenario you might not be able to recover your labor costs on a bad debt account, but you will never be left holding onto thousands of dollars in products or special orders.
My customer would not give me enough deposit to cover the stuff I had to buy - If you need to buy something for a customer, whether a custom order product like a hot tub cover or pool liner, or maybe a special order part for something, or perhaps a big ticket order as part of a larger project, then you MUST have funds from the client to cover these costs. If the customer wants your company to float this amount of money then simply walk away. Why would you risk any financial liability for something for a strangers pool? Simply impress upon the customer that your pool does not need this...their pool does. Never extend the financial liability of your company on good faith from a customer. If they won't pay now what makes you think they will pay later either?
5) Talk To Your Customers
The pool industry runs at a frantic, nearly unsustainable pace. All pool industry workers work hard, just to get by, and often work far more and longer hours than other industries and trades. When you deal with a customer you need to understand that they do not understand the nature of the schedules we work, or how in demand our time can be especially during the busiest parts of the year. Instead of rushing through your interactions with clients to meet the demands of your work day, accommodate your work schedule to allow more time for your clients. If you alienate your clients then you vastly increase the potential for a soured relationship which can lead to bad blood, bad reviews, poor word of mouth, and of course legal action in the worst case scenarios. In almost all of these cases a more thorough approach to communication could have headed off this problem before it really began.
I don't have enough time to answer ALL of their silly little questions! - If you don't have time to answer all of the questions from your clients then you have failed to structure your business properly. Answering questions and leaving your clients with a satisfied and confident feeling about the job is not an optional extra that you do if you have time at the end of the job. This is possibly the single most important part of the job as a pool industry professional. Charge more for your time so that you can make time in your day to inform your clients, meet with them and address concerns, and be present during all milestone stages of the project development. When you fail to have open communication with your clients then you leave the door wide open for potential problems to develop, or pile up, which could permanently damage your reputation in the eyes of the client. Making more time in your schedule to meet with your clients and address all of their concerns will help to ensure that everything goes smoothly, as well as providing you with ample opportunity to talk to them about possible additional upgrades for their pool.
6) Build A Sustainable Business
If you are in business for yourself then the onus is on you to develop a long term and sustainable business plan. In theory this is easy but it is much easier to lose sight of this once you are actively out working in the field. On a daily basis in the pool and spa industry you will encounter people looking for special deals, one time prices, favors, friends and family prices, discounts for no reason...you need to learn how to stand your ground when it comes to pricing. The best way to do this would be to develop a long term sustainable plan, and then to follow it. You should have three prices for your products and services. Full price, a token discount, and free. If your mother wants a new pump then just give her a new pool pump. But for everyone else they need to pay full price, or a special "sale" price which includes a SUSTAINABLE token discount. Something that your business could absorb time and again if you wanted to.
I am going to lose sales if I don't drop my prices! - This fallacy is known as the race to the bottom. Instead of dropping your prices to get a sale you could simply include a value added service, something that does not cost you anything except perhaps a little time, which will help you to retain the sale. Do not ever sell a product or service for such a low price that you could not sustain doing that time and again long term. This does a disservice to yourself, your business, and your reputation with the customer. If a customer will not pay your prices then become better at explaining why you are worth your prices. Failing this, walk away and find a better customer who appreciates your value as an industry professional. If you are going to make nothing for your professional services, or next to nothing, then save yourself the liability and trouble and just stay home. If you decide to go to work, then follow a pricing matrix for your products and services that will sustain you and your business long term. If someone wants a little discount, and you can justify it, then by all means provide this to them. But if someone wants something for free, or at your cost, then tell your mom that pool pumps are expensive and don't grow on trees.
7) Look Like A Success
If you want your business to be a success then you need to look the part to the pool owner. If you drive a work truck that is 34 years old and belches smoke and oil out from every orifice, then how can you expect the customer to take you and your business seriously. People put a lot of value on their swimming pools and you will need to look credible if you want clients to trust you. This means having reliable work trucks that look good, start every time, leak no fluids and are of suitable size and description for the task at hand. If you are being hired to take out and replace a concrete pool deck, and you show up to the job with a beat up Honda Civic and a tiny utility trailer then the customer is going to be (rightfully) concerned that they have hired the wrong person for the job.
Trucks are expensive and I can't afford brand new trucks for all of my service vehicles - For sure trucks are expensive and this is why you had damn well better take care of the one(s) you have. Attend to service and maintenance on time, or ahead of time, and do not settle for unreliable vehicles or ones that leak ANY fluids on a customers driveway. Looking like a success means more than the truck you drive. This means the clothes you wear, whether you bothered to shave this week, brushing your teeth, your choice of words and mannerisms, politeness and manners, punctuality, honesty. Be prepared. Have samples. Have something to write down notes with. Have extra business cards. Looking like a success means running a tight ship, taking care of little details for both yourself and your business, and putting your best foot forward with every customer interaction that you have.
8) Answer The Phone
A pool company can put tens of thousands of dollars into marketing and promotional material every season. Years worth of technical training and real world experience being taught to new employees is unbillable time and just a cost that pool companies need to absorb in order to function. You invest more tens of thousands into trucks, tools, equipment and materials...and then you miss the call when all of this stuff works and you actually attract a new customer. Do you suppose that new customers will just leave a message or maybe try to call back later when you are less busy? Not a chance. In the majority of cases if you miss a call from a potential customer then they will not leave a message, and within 60 seconds they are probably calling a different pool company and you missed your chance.
How am I supposed to get any work done if I am answering calls all day long? - Hire and train someone to answer the phone for you. Train them how to triage calls and assign priority to things that are the "bread and butter" of your company. Perhaps you could even use an answering service if nothing else so as to avoid the dreaded voicemail that the client phoning you does not want to hear. Also you could consider simply making more time in your day to actually field these sales calls. What is more important than getting new business for your company? If you want your pool company to be a success and outpace the growth from your competitors then you need to find a way to answer the phone when clients decide to call you. Every missed call is a failure of your customer acquisition process at the worst possible time. You already paid for all the groundwork to be in place to find new customers, and then failed to do the one thing you needed to do when it worked and someone called your company. Not only did you miss a potential new customer, but technically you paid for that missed opportunity out of your own pocket.
9) Stay In Your Lane
It is very common to see someone from the pool industry post online saying that they own a pool maintenance company and they are thinking about starting to build pools, and are looking for advice. This is a huge mistake that pool companies make. It can be easy to get distracted by dollar signs when working on or around swimming pools, but there is no way to simply start offering new technical services without first, you know, learning how to do those things. Building a pool is not something to be taken lightly, and simply having a solid understanding about how pools work is NOT enough industry experience to decide to start building pools for yourself under your own company banner.
So how am I supposed to start building pools then if I never try it? - The disconnect here is that you are not appreciating the technical complexity of building swimming pools. This is not a process that you can learn at a professional level tangentially. You NEED first hand experience building swimming pools if you want to start building swimming pools. There is absolutely no other method to accomplish this. Pools really should be a recognized trade like electrical or auto mechanics due to the technical complexity of what we do. Since this is not a recognized trade people mistakenly think they can just jump in and start building and that is most certainly a mistake. If you want to be a mechanic then you need to first work for an experienced mechanic, every day, all day, until you have seen literally everything there is to see and they have nothing more they can teach you. Then you can start up your own company offering those services.
10) Negotiate Better Prices
Most people in the swimming pool industry do not realize that it is up to you to advocate for your company and request better pricing, and rebates, from your wholesalers and equipment suppliers. For example, just say that your price from your supplier is $2400 for a popular pool heater that you typically sell a lot of, or want to sell a lot of. You should call your supplier and ask them for a better price on this specific product. Explain that you are good at selling heaters, and this particular brand, make and model is one that you like to sell, but you need a better price in order to be competitive with this product. In most cases your supplier will lower the price for you. This is called special net pricing, and is something that pool equipment sales people do all day long for their accounts.
Yeah but my price on this product is too high and I can't sell it and still make money - Yes this is exactly the point. This is why you call your supplier, whoever you use, and say that you need to speak to a sales person about your pricing matrix. Most of you probably are not even aware that you have a dedicated sales rep from your supplier because they have never bothered to reach out to you. Get this person on the phone and give them a short list, three to five big ticket items that you really like to push to your customers, and tell them you need better pricing on these items. It might only be a few percentage points, but this will certainly add up by the end of the year. Similarly you can ask your sales person what milestone gross sales volume you need to reach before you will qualify for a sales rebate. You should be getting back 1% for every $100,000 you spend with your suppliers, but you have to ask in order to get it. If you don't like the answers that you are getting, call the direct competition for your current supplier and see what kind of special net discounts and rebate percentages they would be willing to offer to get your business moving forward.
11) Grow Your Business Online
If you want to ensure a stable foundation for your company to grow on then you would be well advised to establish your brand online. Establishing your brand used to be the ONLY part of growing a business. Having a brand means guaranteed exposure, sales opportunities, word of mouth and referrals, but in modern day business having an online brand and business presence means everything. Do you really think that people still grab a 25 pound yellow pages phone book and start thumbing through the "plumbing section"? I sure don't think so. The last time I can remember having a yellow pages physical phone book was probably 2005 or so. Yes the older generations might still use traditional print and advertising mediums, but there can be no doubt that the future is online.
I am a pool guy, not a computer guy, and I don't know how (or have time) to do all that stuff online - That is great news...you have identified an area of your business that you need help with. You can work with that. What you DO NOT want to do is take for granted the importance of developing your business presence and brand online. Before the next generation of pool workers retires the internet will be responsible for nearly all advertising and initial point of contact with customers. It takes a long time to establish a solid online business presence and this is not something that you can force to happen quickly. Schedule regular time to put into (or money for) growing your brand online because you can bet that your competition is doing exactly that. If you want to learn more about this you can read this article that I wrote about growing your online exposure for pool companies.
Tips For Starting A New Pool Company
Customer profiles you will encounter while working in the pool industry
Common personalities that work for every pool company
Online exposure for pool companies
If you want to continue learning about pools and spas from an industry expert follow swimming pool Steve on acebook , twitter and youtube