WHAT TO LOOK FOR WHEN BUYING A POOL BUSINESS
What to look for when buying a pool business
- Where to buy a Route?
- For Sale by owner– You can find pool routes being sold online by the owners, but you want to make sure that you are protected when doing this. You want to make sure the accounts you purchase are guaranteed for at least 90 days. This means that if you take over the pool and the homeowner decides to not keep you servicing the pool then the person that sold you the pool needs to replace that account or give you your money back for that account. You are also going to want to make sure that they ride with you and train you for 30 days. This allows the new customers to meet you while they are riding with you.
- Pool Route Brokers– There are many pool route brokers out there. Using a pool route broker provides a protection when purchasing a route. They will ensure that accounts are guaranteed for 90 days, that the selling party trains you and provides a non-compete clause. They will keep in escrow a certain percentage of the sale of the route. If a homeowner of a pool you are servicing decides not to keep your service then the person selling you the business will need to replace the account or give you a credit/refund for that pool.
- What are the things to look for when buying a route?
- Monthly Rates– What is the owner of the business is charging for monthly service?
- Average Rate– Find out what the average rate of the monthly service is. What is an average rate? It is the total monthly service revenue divided by the total number of pools. This is important because you have some pools where you charge higher rates. If you have 1 pool at $100.00 and 1 at $50.00 your average rate is $75.00. $150 divided by 2 = $75.00 Your profits are based on how much money is left at the end of the month after expenses are taken out. If you have 2 pools at $100.00 each your average rate is $100.00. $200 divided by 2 = $100.00. If your expenses were to be the same for those 2 scenarios then you will make an extra $25.00 a month on the ones with an average rate of $100.00.
- Extra Charges– In the pool business you will find that some business owners charge for what are called “Extras”. Some charge for Yearly Condition (Cyanuric Acid) and they will charge any were from $25 to $40 per year for conditioner. Others charge for Yearly Algacide treatments and those will range from $40.00 to $95.00 per pool. Its important for to know what extra charges on top of the Monthly Service Charge the business charges. That is extra revenue and can add up to the thousands of dollars in revenue. FIiter service is also charged separately from the monthly service and will provide extra revenue. So make sure to know the extra revenue that is coming in.
- Tight Route– When looking at the route look and see how far pools are from one another. If you have pools that are in different cities then your travel time from pool to pool will be long and you will spend a lot of time driving. You don’t want pools to be too spread out. Make sure that pools are clustered together to allow you to spend more time cleaning pools and less time driving. The tighter the route the more pools you are able to service. The more pools you service the more money you will make.
- Interview the Owner– Make sure that you meet and spend time with the owner. Interview him. It’s going to be your business. Pool guys that are passionate about the business take care of their customers and it will show when you are talking to them about their business. Let them know that you are new to the pool industry and will need good training. Aks how long they have been servicing pools, what repairs are they able to do, what advice they have for you etc.