Buying and Selling Pool Service Routes: Lessons Learned From a Veteran Pool Pro
The pool service industry has recently witnessed a flurry of activity, with many individuals, especially current pool pros and entrepreneurs, finding great value in buying and selling pool routes.
This path provides a shortcut to a profitable business model and the opportunity to tap into an existing client base or carve out a niche for themselves by building routes from scratch.
This blog will dive into the key lessons learned from veteran pool pro and owner of Beyond Pool Cleaning, Bryce Sirrine. We'll examine everything you need to know before buying or selling pool routes and even touch on building your own routes.
Now, let's get started.
Table of Contents
What is a pool service route, and why would you want to buy or sell one?
A pool service route refers to a portfolio of clients, typically in a specific geographical area, whose pools require regular maintenance and servicing. Each "route" includes details about the customers' locations, pool service needs, the frequency of service, and other specifics about the services rendered.
So, why would you want to buy a pool service route? Purchasing a pool service route is an excellent way to kickstart or rapidly expand your pool service business.
You're essentially purchasing an existing client base, complete with recurring revenue, which can be far quicker and often less costly than acquiring customers individually over time. Furthermore, the previous owner has already established relationships and trust with these customers, alleviating much of the initial legwork of customer acquisition and retention.
This aspect can be especially valuable if you're new to the pool service industry.
How to evaluate if a pool route is worth buying or selling
Investing in a pool route is no different from investing in a business. You’ll want to do your due diligence in many areas to ensure you’re making a sound investment. Here are some important factors to consider:
One of the first things to consider is the geographical proximity of the pools on the route. Ideally, the pools should be close together and have close service dates. This ensures efficiency and reduces travel time between sites.
Even if you intend to do the cleaning yourself, ensure the rates are profitable enough to hire out the cleaning. This strategy ensures you preserve your margins whether cleaning yourself or hiring it out.
Seek out a seller that has all their customers on autopay. This minimizes the effort and time required to collect customer payments, reducing friction in your business operations.
An organized seller
Purchasing from an organized seller can make your life significantly easier. Their established systems and procedures can streamline your onboarding process.
Meet with multiple sellers
Take your time to meet with multiple sellers before making a decision. This allows you to gauge the differences between good and bad sellers, especially if this is your first big business decision.
Seller with pool service experience
If you need prior cleaning experience, ensure the seller has someone on staff who can teach you. This knowledge transfer is crucial to retaining new customers by offering a high-quality service.
What to consider before purchasing and selling pool routes
When it comes to buying and selling pool routes, here are some factors you need to consider:
Purchasing pool routes
Assess the value
Review the points above and assess the pool route's value. The industry standard is a sliding scale based on a multiple of the monthly service revenue. A route that checks all the boxes can command a higher multiple than one that does not.
Compare business plans
If acquiring another route, ensure that the business plans closely match. Trying to juggle disparate business plans can create confusion and a lack of focus for your team.
Evaluate customer quality
Customers who pay on time and approve work as needed are essential for this type of business. A thorough check into pending approvals and payment history can answer all these questions. At Skimmer, we have the Skimmer Billing tool to help streamline this process and get you paid faster.
Align service levels
Ensure the business's offerings align with your values and desired service scope. Evaluate the types of clientele they service (commercial vs residential pools) and whether they include or charge separately for chemicals.
Selling pool routes
Set your own rates
It’s easier for you, an established pool pro, to raise rates than for someone just entering the business. Plus, since the payment is typically a multiple of service revenue, any rate increase will proportionately increase your sale price.
Sell to the right person
Selling to the right person can help preserve your legacy and minimize post-sale hassles. While someone already in the industry may require less guidance, a newcomer might be willing to pay more for your business.
Consider a relationship vs. transaction dynamic
If you plan to sell a portion of your business while staying operational, look for an ongoing relationship rather than a one-off transaction. Partnering with a company for lead swaps and trades can significantly boost your growth, as you can cover more ground with fewer miles.
Where can I purchase pool routes?
There are many avenues for purchasing pool routes, each with its unique benefits and considerations. Let's delve into some of the common methods:
1. Pool route brokers
One of the most popular ways to buy pool routes is through professional brokers. Brokers, like National Pool Route Sales, have an extensive network of buyers and sellers and can help connect you with the perfect pool route that fits your budget and business goals.
These brokers handle many of the logistical elements involved in the buying process, such as ensuring transparency of the deal and providing secure payment methods. Brokers also typically offer a wide variety of pool routes from different regions, providing you with many options to choose from. Keep in mind, however, that brokers usually charge a commission for their services, factored into the cost of the transaction.
2. Direct from sellers
Buying pool routes directly from individual sellers is a more personal and cost-effective option. This could be a retiring pool pro you have a relationship with or someone looking to sell off part of their routes to focus on a specific region or clientele.
One avenue for this type of purchase is online platforms and marketplaces like Craigslist or BizBuySell, where owners often list pool routes for sale. In addition, industry-specific forums and social media groups are excellent places to connect with sellers directly.
3. Pool and spa trade shows
Industry events such as pool and spa trade shows can also offer opportunities to buy pool routes. These gatherings bring together professionals across the industry, making them excellent networking opportunities. You might meet pool route owners looking to sell or brokers with just the route you seek.
Joining local business organizations or industry-specific associations, like the Association of Pool & Spa Professionals, can provide valuable connections. You never know - your next pool route purchase might come from a recommendation within these networks.
What to consider before building pool routes
While building pool routes is an alternative to buying, it has its own considerations.
Cost of acquisition
Tracking your advertising spend and the lead source for new customers is vital. This data can ensure you're investing your resources wisely.
Time to build
Building a route from scratch takes time, and your financial goals need to be spread over a longer period. Consider this as you establish your long-term plans.
Growing a business from scratch can come with difficulties. Navigating the hiring process can be especially challenging without guidance or a proven plan from an experienced business owner.
How to retain new and existing customers
Once you've acquired a pool route, customer retention becomes paramount. Here are some tips.
- Be reliable and consistent: Always show up when you say you will. It’s simple, but it goes a long way.
- Communicate: Share scheduling updates, service reports, marketing updates like pricing changes, etc. Clear communication shows you value their business and the quality of your service.
- Be a resource: Show customers your expertise to increase professionalism. If you can't answer their questions or provide support, they may find someone else who can. If you commit to finding the answer, it's okay to admit you don't know something.
The pool service industry is consolidating, with large companies buying up many pool service operations. This change allows you to differentiate your business and stand out.
Whether you buy or sell, avoid making compromises and prioritize smart decisions over fast ones. Even if you don't plan to sell, it's always wise to prepare your business as if you may sell or hand it over to someone else. Remember, whether you buy, sell, or build a pool route, the key is to make informed decisions aligning with your business goals and values. Happy swimming!