Level Up Your Route: Scaling Like a Pro

Episode Transcript
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SPEAKER_00 (01:02):
Hey, welcome to the Pool Guy Podcast Show.
In this episode, I'm gonna goover ways to scale your
business.
And there are different ways toscale, and I'm gonna just give
you a few categories that youmay be able to apply to your
business to scale your route.
And this is working the sameamount of hours but making a lot
more money.
Are you a pool service prolooking to take your business to

(01:25):
the next level?
Join the pool guy coachingprogram.
Get expert advice, businesstips, exclusive content, and get
direct support.
From me, I'm a 35-year veteranin the industry.
Whether you're starting out orscaling up, I've got the tools
to help you succeed.
Learn more at swimmingpoollearning.com.
The first thing is to understandif you're ready to scale your

(01:47):
business or not.
And this is a critical questionbecause if you're not ready to
scale, it can become a disaster.
And there are certain things youneed to get in place to scale
properly.
You also have to know whichdirection you want to scale.
Do you want to scale within thepool industry or do you want to
scale somewhere outside the poolindustry where you can develop

(02:09):
some passive income or income,future income or investment
income?
And it's up to you to decidewhat's best for you.
There are a lot of single polarsthat scale outside the industry
and are very successful in otheravenues.
I I gave this example before,but I know a pool pro that's

(02:30):
really successful withcoin-operated laundry machines.
He has two or three locationsnow, and he has someone that
goes in there that fixes themachines for him when they break
down, and he also has someonethat collects the money.
So it's a very passive incomeoutside of his regular pool
service income.
And I'll touch on more ways toscale aside the industry later

(02:51):
on.
Now, I mentioned you have to beready to scale.
You have to be ready for someheadaches that are involved when
you bring on an employeepart-time or full-time.
And you have to do a really goodcalculation of how much profit
you're gonna actually make bybringing on an employee.

(03:12):
You have to see how much isgonna cost for the payroll
taxes, workers comp, are yougonna pay them per per pool or
hourly?
All those are factors in theoverall cost of the employee.
Now, your route rate should beset up to cover the cost of the
employee, and if it's not, thenyou're not ready to bring on an

(03:32):
employee because then you'regonna lose money.
So you'll have to calculate howmuch is going towards payroll,
payroll taxes, workers' comp,and other expenses with the
employee.
And then you have to also beready with the customers, they
have to be prepped to accept anemployee doing their pool.
This is probably one of thebiggest hurdles if you've been a

(03:53):
single poller and you're doingsomeone's pool for a long time
and you bring in an employee,they may not like that fact,
they they like dealing with youdirectly, and this takes a lot
of work to get them to acceptthe employee.
You have to make sure you pick areally good employee that's
gonna stick with it as well,because if the employee lasts
six months or nine months andyou bring someone else in,

(04:15):
that's even worse in thatsituation.
So you have to really pickcarefully.
A lot of times the customerdoesn't really care who's doing
their pool, but there is thatpercentage that does care, and
that's something they have to beaware of, and also try to
mitigate those problems beforethey even begin.
You know, you can say thatyou've grown really big in your

(04:36):
service business, you would liketo retain all your accounts,
especially their pool.
And would it be okay if you tryout an employee on their pool,
someone that's gonna do thingsexactly like yourself, you've
you're gonna train them to bejust like you and see how they
take it.
Kind of do like a kind of surveykind of thing with those tougher
customers to see how that'sgonna work.

(04:58):
And sometimes you're gonna haveto just keep some customers on
your partial route and give theemployee those pools where you
know the customer doesn't carewho services their pool, who's
in their backyard.
Some other challenges, ofcourse, are if the employee
doesn't do a good job and thenyou have to go out there and fix
things, you know, pools areturning green, they have algae,

(05:18):
or the employee doesn't show upand you have to cover the route.
So, all these are definitelythings to think about when
you're bringing on a full-timeor part-time employee.
These are things on the negativeend.
On the positive end, of course,if you have your monthly service
rate set up correctly to whereyou can absorb an employee and
still make good money, then ofcourse that's a win-win

(05:40):
situation if you look at the onthe income side of things, and
you can do a quick calculation.
Let's just say that let's justsay you're charging 180 a month
for pool service, you bring inan employee and you're paying
him$18 per pool.
That's$77.
It's actually$18 times 4.3.
I use the 4.3 multiplier becauseyou have those extra weeks, and

(06:04):
you probably got to pay theemployee paid vacation as well
as a benefit.
And so they're gonna get paideven if they don't do the pool
during those four weeks thatthey're off.
So that's the multiplier I'musing.
So 77 minus 180, that gives you$100 basically, and then from
that$100, you're going to haveto factor in the payroll tax
you're paying every month, theworkers' comp that you're

(06:26):
paying, and other things thatyou're paying, and that you
know, chemical costs andeverything.
But you should still be able tomake a pretty decent profit at
that point, even if you make alot less than if you were doing
the pool yourself.
And let's just say, for sake ofargument, to keep it simple,
that you're gonna be netting.
I'm gonna keep this really lowjust because this could happen,

(06:48):
and it unlikely, but let's justsay you're netting fifty dollars
per account that the employee isservicing.
Let's say he's doing 50 poolsfor you, so fifty dollars times
fifty, that's twenty fivehundred times twelve.
So that's thirty thousanddollars a year, and that's on
the low end, of course, thatyour rate's low, you're paying

(07:09):
the employee probably a prettydecent per pool rate right there
at that one.
It's a pretty high rate in someareas, some areas that may not
may be pretty accurate.
And then if you are doing that,you're deducting everything that
you're all the expenses thatyou're incurring, and you end up
with 30,000 extra a year.
It may just be worth theheadache of dealing with a few

(07:30):
times when the employee doesn'tmake it out there, or those few
times where he may drop the balland the pool has a problem, and
you have to go out there anddeal with it, but that's still
30,000 extra at on the low endthere every year that you're
getting with really really doingminimal effort on your end, you
know, just kind of managing theemployee and managing problems

(07:51):
that come up, and so that'spretty lucrative.
You can actually bring on twoemployees at that point then and
have sixty thousand.
Now you have to have your routelarge enough to where this is

(08:21):
logical, but it's really doableout there if you have the right
people and pick the rightpeople.
Now it's very difficult in someareas to find the right person
for this and to do thiscorrectly.
And this is why you see a lot ofbig companies, you know,
consolidating routes and buyingpool companies and expanding and

(08:43):
having a lot of employeesbecause I mean, if you do the
math here, even on a low end, ifyou had 10 employees, if your
pool route was big enough andyou had 10 employees and you're
netting about 30,000 peremployee, that's$300,000 a year.
That's a lot of money.
You have a manager, maybe, youhave other managers, and you
have repair techs, things likethat.

(09:03):
So there's a lot of money inscaling your business.
Of course, you may just want tostart with one part-time
employee, and there's differentways of doing it.
There's two ways you can bringon an employee, and I think it's
really successful if you bringon an employee that rides along
with you, probably for at leasta good one month to six weeks,

(09:25):
and they're just kind of like aride-along partner with you.
You're paying them, they'relearning the pools, and you're
training them to where oncethey're on their own, they can
do the pools.
And most of the time, you wouldwant to provide a work truck
vehicle for them and a gas card,you know, so that they have a
dedicated work truck under yourcompany.

(09:47):
You can kind of get away withhaving them use their own
vehicle, but there's a lot ofgray areas if they're an
employee driving their ownvehicle, and you may not want to
enter those kind of murky areas,you just would want to get a
truck.
And you can write all theseexpenses off on your taxes, by
the way.
So that's the nice thing abouthaving an employee because it

(10:09):
does create a tax burden on yourend, and you can deduct more off
of your income with thesedeductions, you know, the cost
of the vehicle, the cost offuel, all these things go
towards your business expenses.
So it is kind of a good thing onthe other end of it when you're
filing.
You'd have to have a good CPAthat walks you through, you

(10:30):
know, is an employee somethingthat you can bring on, and is
this something that's logical?
And then even in the smallerdetails of this, if you have a
spouse that you want to bring into do bookkeeping and do
accounting for you and pay them,this also may be a way to offset
a lot of your corporate tax ifyou're incorporated, and this is

(10:52):
something to consider as well.
So these are all differentthings you can, of course, talk
with your professional taxadvisor with, and they can help
you fine-tune all of this.
Let's say that you just don'tlike the idea of bringing on an
employee, but you still want toscale, you don't want to turn
down those accounts, and you canmanage, let's say, 80 pools
pretty comfortably on your poolroute, and you just like getting

(11:14):
new accounts, and you don't wantto turn down business, and
there's a way to scale here aswell, and this is more or less
scaling your income, but alsonot keeping the pools.
So, let me just describe thisway of scaling.
And this is done successfully ina lot of areas where you're
working with a builder, thebuilder's throwing a lot of

(11:34):
pools your way, you're securinga lot of brand new accounts with
all new equipment, new poolsurface, all this is really nice
to have on your pool route, andyou're just building it up and
you're a single polder, and youjust don't want to keep these
accounts.
So you you're doing 80 pools,then you get to 90 pools, and
what you can do is that you cansell off about 15 of the pools

(11:57):
that you've been doing for ayear.
And if you're working with abuilder, this is really easy to
do because you can tell thecustomer, yeah, I'll be
servicing the pools for for thebuilder.
At some point, I'm going totransition to another service
company for you.
But in the meantime, for thenext year, year and a half, I'll
be doing the pool directly forthe builder.
Any problems you have, I canhelp you get some warranty work

(12:19):
through the builder, and afterthat time, I'm going to
transition you to anotherservice company.
You can have that conversationwith them if you'd like to, or
you can have the conversationwhen you do sell those pools.
But let's just say you sell off15 pools, and let's just for the
for sake of argument, let's sayyou're charging 185 a month, and
so that's uh 185, that's 2775times 12 multiplier.

(12:45):
So for about 30 to 33,000, youcan sell these 15 pools to
someone.
Let's just say 30,000, you sellthese 15 pools, and you just put
30,000 in the bank, and you'reback down to 75 pools, and then
you start building back up to 90again, and then you sell another
15 the following year, that'sanother 30,000.

(13:06):
So after three years of doingthis, you have$90,000 from doing
this.
So very similar to the incomeyou would have with an employee,
the$30,000 example that I gaveyou earlier.
But this way, you really have noheadaches, you just have a
little extra work because you'redoing 10 extra pools, you know,
10 pools more than you normallywould do.

(13:26):
But then you'll break that andsell those and get down to 75
again and start working your wayup again.
So it's definitely a way toscale as well.
You're not actually buildingyour pool route up, but you are
scaling economically orfinancially or with your income,
I should say, make it clearhere.
And you're also getting atighter and better route because
you're keeping some of thesereally sweet pools, and your

(13:49):
route is going to be just one ofthose where you're in and out,
and you're actually looking forthings to do at the service
account because the pool is sucha sweet pool.
So that's another way to scale.
If you're working with abuilder, you're getting a lot of
new builds, and you don't wantto bring on somebody, you can
scale this way verysuccessfully.
And there are several peoplethat I know that are doing this,
and it's really lucrativebecause you're selling some

(14:11):
really nice pools too, and theperson buying them is getting a
really nice partial route.
They're not all junky pools,they're all new builds
basically, and it's really easyto transition because you can
just tell the customer that youdid the pool for a year for the
builder, and now you'retransitioning their pool over to
the person you always give itto, you know, crystal clear pool

(14:32):
pools or whatever, and you know,figure out a way to explain it
logically to the customer, andyou wouldn't have any problem
doing this because this modelagain is very successful and is
being utilized by a lot of poolpros out there currently.
And the third way that I'lldescribe scaling here is scaling
outside the industry.
Even if you're a single polar,you could put a lot of money

(14:54):
into your savings and you canuse that money to again buy a
business, like I mentioned, thecoin laundry, you can buy rental
real estate, which I think poolpros are really set up to do
because you have good customerservice skills already.
You can talk to people, sotalking to a tenant is no
different than talking to aservice customer, and you kind

(15:14):
of know the area of your city orknow the surrounding areas
really well because you drivethrough all the neighborhoods
and you know the good areas, youknow, class A areas, class B,
class C.
And so you're not going to makea mistake of buying something
that's in a really bad area thatyou can't get anyone to rent.
So those are some advantages youhave built in, and you don't
really need a lot to getstarted.

(15:37):
You just need about 25% for adown payment.
So if you're looking atsomething that's half a million
dollars, you would need about125 down.
Realistically, you would want tohave about 150,000 because
they're going to want somereserves, and then you can buy a
multifamily property and thenrent it out with the DSCR loans
available now, which is loansthat are based on the rental

(15:59):
income of the property and noton your income.
It's really easy for someoneself-employed to get one of
these loans, and it's somethingthat you can do, and you can
scale by buying something everytwo or three years, let's say,
you know, putting that money towork to do that, and it's
something that if you have threeor four of these things, and
eventually they're gonna, if youdon't do anything for 30 years,

(16:21):
you're gonna be paid off, you'regonna have some really good
income later, and possibly somepretty good income currently as
you're renting them and you'reable to draw some income.
Plus, on the flip side of that,that gives you a really great
tax advantage with the IRS withreal estate or a small business
on the side.

(16:41):
So if you are looking for waysto maximize your tax advantages,
i.e., paying a lot less incometaxes, this is a great way to do
it.
Again, your CPA would be able toguide you and let you know what
the best way to scale outsidethe industry, but of course, I
think the real estate is idealfor most pool pros to jump into.

(17:05):
The bottom line is that thisindustry or this profession
gives you the ability to scalein one avenue or another, and it
would be really foolish not touse this aspect of the pool
service business to scale.
You know, there's a parable inthe Bible about talents, you
know, someone gets 10 talents,someone gets five, someone gets

(17:27):
one, and the person that getsten doubles them and gets
twenty.
The one that had five doubles itand gets ten.
And the one that had one talentkind of buried it in the dirt
and didn't invest it or doanything with it.
And if you read that particularverse, you'll see what happens
to that servant that got thatone talent.
It didn't turn out well for him.

(17:48):
And the point is that you'regiven these resources and you
should utilize them by scalingand multiplying your business,
especially in pool service,where it's really a golden
opportunity to do this, workingthe same amount of hours
roughly, but making a lot moreincome by scaling your business.
Looking for other podcasts, youcan find those on my website,

(18:09):
swingpoollearning.com.
There's I have a podcast icon atthe top, and you have over 1800
podcasts that you can listen tothere.
And if you're interested in thecoaching program, you can learn
more at poolgatecoaching.com.
Thanks for listening to thispodcast.
Have a great rest of your weekand God bless.

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