Owned and Operated #74 - Business Breakdown: Are Pool Service and Repair Good Businesses?

Do They Tread Water?
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In this episode, John and Jack immerse themselves into the world of pool service businesses. They discuss the appeal of hyper-focused route-based services, the potential for upselling in the industry, and the challenges of scaling in different regions. Tune in for a detailed exploration of customer acquisition strategies, seasonal considerations, and the overall dynamics of acquiring, or starting, and growing a pool service company.

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John Wilson: @WilsonCompanies on Twitter
Jack Carr: @TheHVACJack on Twitter

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John Wilson, CEO of Wilson Companies

Jack Carr, CEO of Rapid HVAC

Owned and Operated Episode #74 Transcript

John Wilson: I'm John Wilson. Welcome to Owned and Operated. Twice a week, we talk about home service businesses, and if you're a home service entrepreneur, then this is going to be the show for you. We talk about our own business in residential plumbing, HVAC, and electric, and we also talk about business models that we just find interesting.

Let's get into it.

If you like what we talk about on our social media, on Twitter, on this podcast, then you should be signed up for our newsletter. Go to ownedandoperated. com where every Friday we break down our business, we break down insights, things we're learning, things we're working on, and it's good stuff. Check it out, ownedandoperated. com.

Today on Owned and Operated, Jack and I talk about Pool Roots. Pool Roots are fun. Hyper focused, route based service business that has plenty of opportunities to upsell into new services, costs very little to start, and is an easy solopreneur gig that could turn into a medium sized business. It's a great episode.

We do a deep dive into the model. We're hoping that somebody out there can tell us exactly all the things that we got wrong. Give it a listen.

Welcome back to owned and operated.

Jack Carr: Owned and operated big week, John, big week. Really excited about the numbers we put up.

John Wilson: Yeah, dude, let's go. Let's hear about it.

Jack Carr: If you would have put on my bingo, 2023 bingo board number 33 podcasts on Apple.

John Wilson: Yeah, we're riding a high right now.

So we hit number one in business, number one in entrepreneurship and number 33 or 34 in overall podcasts. Absolutely wild. Thank you everyone for listening. We're going to try to keep the quality good. But yeah big week. I actually thought, I thought you met in your HVAC company.

I was like, dude, what happened?

Jack Carr: Oh no, big week there too. I mean, We're on the, installing side of big week. So like I said, we already hit our monthly goal in the first week. I think I talked about that last week, which was awesome. But now we're doing all those installs and installs come with a bunch of headaches when you're smaller company I wear a few more hats and I have to run around a little bit more than I'd like, but hey, man, I'm not going to complain at all. Really excited to hit those numbers early on. And then that's all in conjunction with we just got done renting 2, 500 square foot warehouse space. So we're moving out of the storage units in the offices and we're conglomerating all into one location, which is going to be our fourth GMB.

So we're starting to drive traffic there as well, get LSA up. It's just, it's a lot. You just went through your move. You know how it is. We're one hundredth the size, but still man. It's

John Wilson: no it's a lot.

Jack Carr: Yeah, but excited. Very excited. We love it. It's good to be under one roof.

John Wilson: Yeah, that's awesome. Cause guys were under two roofs prior.

Jack Carr: Yeah.

So we had all of our office space, the dispatcher, everything. We had them all under one office that we rented and then we had all of our warehousing out of multiple different storage units.

John Wilson: Yeah, I know somebody else was doing that. I've said this to myself a lot this year I've said this on this podcast, I was really listening to an episode yesterday. And I was like I remember I said it again, but the bigger we've gotten, the more I've realized like how accidentally complicated I made so many things.

And one of those things is the multi location. And I don't know why I felt so compelled and I know other people feel compelled. I think they don't know what else to do. Probably. That's probably why I did it was I was like, I don't know what else to do. I didn't verbalize it in that way, but looking back, I didn't know what else to do.

So I was like, let's launch a new location. And it complicates so much, but I know a few people that did the storage unit thing, like what you're thinking, like what you did and did you guys have parts there too? Cause I know people that use them as like mini depots.

Jack Carr: Yeah. So that's exactly what we did.

And honestly, it's not a bad like zero to 1. 5 million. You could probably do it. Actually, one of the biggest problems that comes into place is if you don't have actual office, warehouse or a building the hardest part of something that we've also talked about it's hiring. These guys are running a storage.

I'm a 1 million dollar salesman I'm not gonna go work for them. We're doing good. We're growing crazy but they don't see that because they only see the intro and so I mean if for a start, it's not bad you can get by you can find good people. It's just a harder sell in the long run.

Totally. Yeah. I remember just a few months ago now, we put everyone in the same building and people had no idea how big the company actually was, and that was a real shock and a ton of people were like, oh my gosh, we've grown so much.

John Wilson: This is so crazy. And like, sort of rode that high for a couple months and like in the front and back of my mind, maybe the middle too, I was like, this is the literal same amount of people.

It's just that you haven't seen 'em. So yeah what you see every day definitely plays a big effect. One of the companies actually, I believe, thought that I was lying. They thought that like, yeah, they were like, ah, that doesn't exist. And I'm like, what? Yeah, but there's a whole other story.

Jack Carr: It was a septic guys wasn't it?

John Wilson: No, the septic guys. Yeah they're good guys. They're cool guys. Cool. What are we diving into today? What do we got up on the docket?

Jack Carr: We got a listener requests for pools. You want to dive into some pools today?

John Wilson: Dude, I would love to dive into some pools.

Jack Carr: Pun intended.

John Wilson: Yeah so last year, 2022, my family and I, we started like staying somewhere else in the country for a couple weeks at a time. And the first time we did it was Florida, which was fun. And we went down to Tampa and we had a pool, which was really great for like my two year old and four year old at the time and we were consistently on this guy's pool route and I remember like asking him about the business a little bit because I was just fascinated, Everybody talks about it And it was really interesting. I know you have an actual deal to share. I just want to pass off my thoughts .

Jack Carr: Go for it.

John Wilson: So these guys this was like a one man show.

It was just him I think he was late 20s and he built up this route of like 30 to 50 pools and they were mainly focused in one neighborhood and basically he would just park. And go run these like eight houses on a block and then go to another neighborhood and do the same thing. I'm super into that tightly packed route type business.

So I think pest control is another one.

Jack Carr: HVAC can be that sometimes. We were doing a job today and then we did the one across the street right after. We just happened to hit it, but you can do that too with plumbing and HVAC sometimes, especially in the maintenance area. But yeah, pools are obviously only that.

John Wilson: Yeah. Pools and pest. But yeah I think the reason I'm into it and I mentioned this before we got on the show, I like the idea. I think anything that's all about efficiency is an interesting business to me. So I remember I was young and I was doing the plumbing for a new factory.

And factories are so fascinating to me because it's like, it is efficiency. Everything is about like total output. I just thought that was so cool. And pest control and pools remind me a lot of that. So that's my pool anecdote.

Jack Carr: Yeah. And realistically, I think that every new entrepreneur or searcher sees that.

Cause I think at one point in your career of looking at businesses on BizBuySell, two, freight routes. Everyone always sees those. Nobody well, Kelsey's knows what they are, but I'm not sure how many people other than him do.

John Wilson: Yeah. It's like FedEx routes based off of the list. So you can buy these FedEx routes.

I don't even know if they're trading the way they used to, but there was a couple of years there where they were like a hot commodity. Yeah.

Jack Carr: So you see a lot of those, but the other one you see a lot of, especially like in Texas, Florida and Southern California is you see pool roots. You can buy them.

They're one X there, you know, 100, 000 in revenue. They're very interesting and there's a lot of them and I've talked to people quite a bit about rolling them up and all this kind of stuff. So I always found it to be a fascinating business because it's one of those ones where it's very available and you're not going out there and you're not paying 10x or 15x or even 6x. It's a 1x sale and you can get a few of them.

John Wilson: I think the interesting thing about pools, so again before we got on, there is a company locally to me here that runs a 5 to 6 million dollar a year pool service business. No installations at all.

Fully route based. And that's like we talked about on the last episode a 5 million chimney sweeps, 5 million business is a good sized business. That's enough to, you know, you could just let that thing run forever. You'd be making a good net. You'd be able to support enough staff and managers to be able to do what you, you know, do whatever you want.

Yeah. So that's a good sized business. So all that to say, it's a fun business because you can make money tiny and it can still go big or like medium.

Jack Carr: There's ways. Yeah. I think that the key there, the first key is that it's a hustler business, right? It's all mostly word of mouth from what I could tell.

And in the beginning you're the one cleaning pools, you're the one selling pool chemicals. If you roll it into a repair or replacement, then that's something different. But in the beginning, like it's you in the truck and to hire out at least from the people I talked to was a very difficult thing to find people who are willing to run these pool routes while keeping the costs low because.

Hiring those people, labor cost was a big portion of kind of the net there or taking away from the net.

John Wilson: Yeah. what do you got,

Jack Carr: Yeah, so I brought a kind of the next step up. So you have the first step is those ports, it's 100, 000 company. It's one or two guys and they own, operate.

The company, work nine months out of the year, maybe 10 months. This is the next step up. It's a pool service and repair company. So on one hand they do that kind of stuff to have enough pool routes that they can sustain themselves, but then also they do the repair on all the pump equipment, the electronic equipment.

They sell chemicals. And so there's a few sides to it, but the key that these guys did, which is different and that I really like them and why I'm focusing on them is they weren't a B to C mostly there. They did B to C, obviously you have to in pools, but most of their customers, they had the gambit like they owned in this city.

All of the pool customers. That were HOAs. Gyms YMCAs. They owned all of the commercial pools Yeah. In that entire city. And it was,

John Wilson: so the one that we size city, the one that we had here, same thing. They had all the big university pools, they had all that stuff. My guess is that becomes more important the more north you go.

Because there's just like, in Ohio, you only have pools four or five months out of the year.

Jack Carr: This wasn't a realist's note, so definitely probably in that same category.

John Wilson: Yeah, so I think in order to get any size, you have to run a bunch of commercial. Whereas like, I was in Phoenix for three weeks earlier this year.

Literally every house has a pool. Every single one. You could probably build a pretty big residential in like Sunbelt.

Jack Carr: I can see that. Yeah, if you're down in Florida, and you have you know that 365 Pool cleaning you don't really winterize pools or anything then you're on you're working year round.

This was an area that snowed generally pretty hot. Quite a few pools. Yeah I'm not going to say the area just out of uh,

John Wilson: nice. Yeah. But Akron Ohio.

Jack Carr: Obviously the, one of the greatest parts to the pool business is the reoccurring revenue, right?

Yeah. So it's reoccurring revenue. They're making between 80 and 120 on average per service

John Wilson: per week. Cause service seems to be weekly.

Jack Carr: Yes. It's one to two times a week too.

John Wilson: Yeah.

Jack Carr: Yeah. So one to two times a week, depending on how, I would guess it's client based versus actual need based. They only worked in the 30 mile radius and the text did on average between six and 10 pools a day, cause right at the end of the day, what it came down to and what he said, the kind of the key is what we've talked about in the beginning was how far away is your next job?

Because that time behind the windshield time was the better you could logistically cut windshield time, the more profits you can make, right? Cause you had one more pool times one day, times, five a week times that little additional ability to do it. It was the key to being able to pick up more work and to make more money.

So they would do those 1 2 times a week, 30 mile radius, 6 10 a day, and then they did an opening and a closing of the pools at the beginning and the end of the year they come in, they put extra chemical in it, they cover it up, whatever it means, or whatever it takes to get it ready for winter, and then at the beginning of the year, get it ready to go for late spring, early summer.

John Wilson: Yeah. so 6 to 10 sounds light.

Jack Carr: They said it took on average half an hour to an hour depending on how big the pool was. And like the shape and everything like that. But I mean if you're doing, say, 8, and they all take 45 minutes, then you have a lunch break and that gives you 15 minutes to drive from site to site.

Could you get more? Probably with better logistics. I don't think I mentioned it, but this is a fairly small company. They only grossed 1. 5 million dollars a year.

John Wilson: Okay.

It's small in the sense of just like generalistic service companies but you know. In a bigger city, in a different area, maybe you could get that higher. I don't know if you could in these kind of areas. I don't know what else you could add or how you would grow ticket sales.

Yeah, that might be a geographic thing.

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Check out service scalers. If you're a plumbing HVAC or electrical home service company, that's what they knock out of the park and they did a great job for me.

Jack Carr: So, the issue was the area was Boise, Idaho. It's where I was living before. And so the problem with Boise is Boise's the only big city that, you know, like, if you were in Denver, you could grow out to suburbs and increase that 30 mile radius. In Boise, you couldn't. There's nothing unless you drive an hour to get to the next city over Twin Falls or something else .There's no other population centers within mile radius, which is one of the reasons why this business ended up going up for sale and we didn't end up picking it up. It was because there's just no growth potential. That all being said, if you were in Southern California, my guess is you probably could if you work on logistics and just increase service areas like Southern California, you go an extra 30 miles and you get, another 50, 000 pools, potential pools.

John Wilson: Yeah. Or like Phoenix, or I think the thing that is interesting, the interesting thing is, can you just walk from house to house? lIke how do you build this hyper dense, you own a neighborhood? Cause yeah, I'm just remembering like down Tampa, we were in a neighborhood, I don't even remember the name of it.

We were there for a month, and every house in that neighborhood had a pool. And it was like. 10, 000 homes or something. It was a big like section of Tampa.

Jack Carr: That's how Southern California is. I could definitely see that.

John Wilson: Yeah. Cause it doesn't take much. It just doesn't take much to build these hyper focused routes where you just literally grab a bucket.

So that's what this guy did is he walked in from the neighbor's house with a bucket. That was it. It was like the mailman, right? He parked somewhere down the street. He walked, it was crazy, I think he got 10 to 12 a day cause he was just like, bam, bamming it out. Yeah I'm into it.

The things that I didn't like is there's definitely a ceiling on the business if you are not in a sunbelt area, which that should be common sense, but that is the reality maybe you could get into like hot tubs do hot tubs have to do?

Jack Carr: I'm sure they do It just would be less right because there is just not as much surface area

John Wilson: I really don't even know but there's a lot of hot tubs up here.

So maybe that's the trade off is you build like a hot tub service. And that probably takes even less time charge. 50 bucks.

Jack Carr: I think the next step is going into like pump repair, pump replacement, because that's your big ticket item, right? If you're servicing pools and they have some kind of shelf life, like on other kinds of mechanical items and you're picking up to 2, 000 pump repairs.

That's the key is, Hey, your pump sitting out in the sun, it's getting cracked and worn. There's gotta be up sales. That's the one that they talked about the most was pump repair and equipment replacement.

Like you could do add ons, you just keep your list, you have your 10, 000 customers or whatever. And you say, hey, I'm gonna now shop this solar heat out to them. Yeah. And that's the way to go.

John Wilson: I mean, The obvious one that no pool company seems to want to touch is the installation.

Jack Carr: Yeah, that's a hard one.

John Wilson: Yeah, but that is the thing. And even the five million dollar a year company up here, They're like, yeah, we're not gonna install. And I'm like, The average pool install is like a hundred and twenty grand. Your business would triple if you did that.

Jack Carr: It's like one is a service Hey, I got into this to clean pools and run, a small business.

John Wilson: We see this in drains all the time or, septic pumping is the same thing. They're like, Oh yeah, we know we only pump them.

We don't replace them. Now, granted, we're thinking about backing out, but that's a frequent thought, is like, Oh, that's a different section of the business. And them not really realizing that they could double or triple their business in a year if they started replacing.

Jack Carr: Yeah, behind every good construction company is the availability of a reoccurring revenue service company.

And so I'd almost feel like it's the opposite way. That legions.

You install and then become the provider on the back end for service. You have one or two.

John Wilson: I think it's both cause like how much does it cost to get a lead for a new pool? Like 500 bucks, a thousand bucks. I don't even know.

Yeah. Yeah. It's probably a ton, but if you service it like crazy, then it's the same as HVAC. You'll probably end up with that replacement.

Okay. So an in ground concrete pool will need to be resurfaced every 10 to 15 years. So there's a resurfacing component. Sounds approachable. And then the replacement, they say 50. So that's a long time, but like resurfacing every 10 years, that doesn't feel much difference than generators or HVAC or any of this other stuff where you're leading in with a hundred dollars service.

In this case, it's a hundred dollars a week. Like that's wild.

Jack Carr: That's a good point because poor surfacing is it says 6, 500 on average for a thousand square feet. Realistically, a thousand to thirty thousand, depending on size, finish, and location. That's comparable to HVAC or a re pipe or anything like that.

At the same time frame, wear rate, and, cost. I don't know what the net on something like that is, but I assume it's good.

John Wilson: And you're getting the route. If it's a hundred bucks a week, that's fifty two hundred dollars a year. You're getting fifty two hundred dollars a year.

If you were in the Sunbelt, if you're not, then it's still a couple of grand for the summer. Yeah. So in Ohio, that's probably like 1500 to two grand. Then you get the open up the closed down and you have the ability to sell pool heaters, pump repairs. I don't even know. potentially solar lining.

I feel like there's a bunch of different avenues to upsell. I'm into it.

Jack Carr: Yeah, that's neat. And then that's the last side to it is the chem side, right? So not only are you the provider and so when talking to them, there's a lot of different components and someone's probably screaming at their screen that those are for, chem included and all this stuff.

There's different prices for including chemical, not including chemical, and then you buy it separately. But I mean, from a, like a startup standpoint, pretty easy. If you look at the back of the trucks, brushes, minimal knowledge of chemistry and how pool chemistry works, which I'm sure it's a weekend class.

We used to do the pool chemistry or the chemistry on my spa. And it's not like you're balancing pH, you're, adding shock to the pool. If need be, you're killing some algae. It's not absolutely crazy stuff, so I'm sure that you could pick it up pretty easily and then an old, truck would do.

You don't even maybe some decals on the side. So you're looking at really what, like 30 K to get into this 20, 20 K on the cheap end. Yeah. And then a hustle mentality. This is truly like you are the door knocker and the person working in the business on the daily. And then even at a 1. 5 million company, the guy was working in the business on the daily.

The only weird component that I did find with it. It was very seasonal, right? So you have to hire seasonal people and he'd actually hire them in the HOA neighborhoods. So he'd find people that were in these certain neighborhoods somehow. And those are the people that would like they, cause the HOA stuff was a little bit different because they would wake up, they'd go there early in the morning, check the cam, do a walk around to check for leaves and anything in there.

It was almost like a commercial janitorial gig. Yeah, and then three months later they were out and so it's a hard for hiring if you can't get someone in the neighborhood you're doing it was the point of that whole thing. But from an ease of startup scale, man, two or three.

John Wilson: It's like a one to me. Especially if you live in a Sunbelt, right? Because every house has a pool. So you just walk up. I think if there's commercial clients, if you're in the North and you're like dealing with real contracts, I can see that being a different game.

It does open up other opportunities though.

Jack Carr: I think the hardest part is customer acquisition because one, you have to grab it through attrition. Everyone who has a pool already has a pool guy. You can't not have a pool guy or otherwise your pool's green or you're doing it. Yeah. So you have to grab them through attrition, leaving someone else's company.

And why is it quality or they leave it or is it price, which I would assume in a high quantity of these things that since it's such a reoccurring service weekly in the summer, that it's a price sensitive. can reduce that price by having the hustle and just, you're not paying for gas or just knocking and doing 12 or 15 of these things in a neighborhood one week.

John Wilson: Yeah. Maybe think of it like snow plowing, right? So like, Hey I'm plowing your neighbor's drive. Can I plow yours for 20 bucks? So I think that's when this business gets really impactful is when you can just knock them down.

Jack Carr: Yeah. And if you have the knowledge as well, I think It's not too much more difficult either from a pool root point of view of just buying these.

Already pre established and just running it. I doubt the banks. loan on them though. So you'd have to get it on a, I'm sure cash up front, but on a 50, 000 pool route, the hope would be that you could probably erase that from your friends and family for going into this to begin with.

John Wilson: Yeah. We're a seller. It's a tough economy. People are taking seller notes.

Jack Carr: Hey, find a guy ready to retire. He doesn't want to do pool routes anymore. his back hurts, his hands have bleach on them or something. I don't know. You might be willing to get out and give you a nice seller for it.

John Wilson: Yeah. I would love to see somebody roll these up, up to like 10 million and just.

Tell me how it goes.

Jack Carr: I've heard of people talking about it. I haven't seen a PE firm or big roll up of these things just yet.

John Wilson: No it is funny. So as we're talking about this stuff people are like, Hey, yeah, dude, we're rolling that up. So Nick from a cub investments, he's rolling up generator routes.

Jack Carr: Yeah. I saw that. He was talking to me about it. That's too neat.

John Wilson: Yeah. I thought that was hilarious. So I'm sure that someone's going to hear this and be like, yeah, dude, I'm for sure rolling up pools. Thanks for telling everyone about this.


Jack Carr: No, it looks like, there are people that are rolling these up and Here, let me show you actually a neat picture. So this is on aqua. com and you can see like the strategy really is get them all in one neighborhood, own a neighborhood, own some big neighborhoods. Check this out.

I think attrition is likely going to be a lot less if they see your trucks every single day.

So this is aqua Magazine and you can see every house in this neighborhood has a pool. And yeah. The goal of this is pros and cons and you can see they have out of the what, 20 pools they have 10 of them. Yeah. And so that's the goal of doing that is just to get as many as you can in a singular neighborhood.

John Wilson: Yeah. That sounds like fun. Cool. Okay. Easy to start recurring service weekly or biweekly. Has plenty of stuff to turn into an up sale, that is somewhat approachable. You get to sell high margin chemicals, no licensing, I don't remember if I already said that, but no licensing. Very low cost to start, cause nobody cares what you show up in, cause you're probably walking between houses.

Man, this is like a 1 or a 2 to me. This sounds like a heck yeah. I think you just have to get past that probably first, maybe 50 clients. And after that, I think it starts snowballing. Cause they see your truck in the neighborhood a lot, or you're working on the neighbors or if you hit the same neighborhood repeatedly, then every day you could put a door hanger on every door in that neighborhood and people will call you like that, and I think that's the fun part is you can so tightly focus. You only need 50 homes in one neighborhood, like that'd be sick.

Jack Carr: Yeah Mike, the pool guy. I think he was down in Florida. Forget his handle. I think it is actually Mike pool.

John Wilson: I think it's Mike, the pool guy.

Jack Carr: Mike, the pool guy. Tell us how close we are to this. We're interested.

John Wilson: Yeah, and if you're rolling us up we wanna hear more about it, but Yeah. So to me, this is a one or two. This is an easy customer acquisition would probably be the tough part, but it gets easier if you're hyper-focused on the geography.

This sounds like a solid place to start. Cheaper than Chimney Sweep.

Jack Carr: Cheaper than chimney Sweep, definitely. And you're not on a roof.

John Wilson: Yeah. I like things that are Google Independent.

Jack Carr: This truly is I'm sure there is a case for PPC and LSA on this.

John Wilson: I'm sure it's like Google enhanced, right? so it's the same as HVAC being, are you weather enhanced or are you weather dependent? Are you Google dependent or are you Google enhanced? And we're doing our best to become Google enhanced.

Like I was sharing with you earlier, like we're getting ready to turn off our LSAs for the first time in a couple of years, that's like the craziest thing in the world to me. We'll probably keep it on like only the high, very high priority things that we want, but like, we don't need it for the low stuff anymore.

Which is just crazy, but. we want to be Google enhanced and I think that pools can be that, where you're not totally sacrificed to the gods of Google.

Jack Carr: I love it, I'm in, I agree.

John Wilson: Cool. Alright. If you're out there, somebody go start a pool company, tell us how it goes. Thanks for tuning in to Owned and Operated yeah, today we covered pools.

It was fun. Make sure you hit the like or follow, wherever it is that you're watching the show. Check us out on YouTube and go to owned and operated. com. Sign up for the newsletter and we have a few events going on too. So you can get more information on that there. Thanks for tuning in.

Jack Carr: Thanks for listening.

John Wilson: Thanks for tuning in to Owned and Operated, the podcast for home service entrepreneurs. If you enjoyed today's episode, please hit the like button and subscribe to the podcast. If you have any questions or topics you'd like us to cover, feel free to reach out. You can find me on Twitter at at Wilson companies.

I'll see you next time.

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