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Start a New Career (cont'd)
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As stated, there are two areas of income we are concerned with here: service income and repair income. When purchasing a route you should always be concerned about the service income first. SERVICE INCOME WILL DETERMINE YOUR PURCHASE PRICE.
The multiple for purchase price determination will also vary throughout the United States, Canada and Australia; however, only slightly. The purchase price should always be based upon the monthly service income (monthly cleaning fee) only, times the factor being used for your area. You should never base the purchase price of a pool route on repair income, or ANY of the ancillary income. If a poolman is trying to include repairs, or ancillary income as part of the monthly service fee, he is going contrary to industry practice.
After many years of selling swimming pool routes, I cannot recall ever seeing a tax return. I'm not saying you shouldn't ask for one, most of the time they do not exist for the accounts you are going to purchase. If a poolman has 100 pools and is selling fifty, he cannot have a tax return for the fifty. His tax return would display the income from all of his accounts. If a poolman is a builder/serviceman, his tax returns would include building as well as pool service income. The other problem with relying only on tax returns is you never know how many accounts generated the bottom line number. Maybe he had 100 pools and sold fifty already. The tax return would display income for 100 pools and you would not have any way of knowing this.
While most poolmen have the same expenses, they do not have the same income. Income is what you will be purchasing. One of the best ways to get a handle on the monthly service fee as well as what a poolman is charging for repairs is to look at his ledger cards. A ledger card is a monthly history for each customer. A ledger card should show when an account was billed and when the account was paid. THE PAYMENT HISTORY OF THE CUSTOMER IS ONE OF THE MOST IMPORTANT ITEMS TO REVIEW DURING PURCHASE. Who wants an account that doesn't pay his or her bill? The ledger card also shows what the customer was billed for repairs. This part of the ledger card will show if the poolman is charging for the proper extras. In addition, the ledger card will show how long the account has been on service. While this is very important to some, the length of time on service is not as important as the payment history. If the average age of the accounts is over a year and they have a good payment history that would be more than adequate.
Another big question on the minds of most potential purchasers is the radius of the route and the quality of the neighborhoods. The overall radius of a pool route is not as important as the DAILY RADIUS. Almost everyone has to drive to work or the office. Some people drive 30 minutes, some an hour, some much more. If you purchase a pool route that is within an overall radius of twenty miles but, is under a five mile daily radius, this would be considered a good route in the industry. TRY TO KEEP YOUR POOLS TIGHT BY SERVICE DAY. The neighborhood of your accounts is not as important as the way your customers pay their bills. There are several high priced neighborhoods where collection is a problem. Most people in just average neighborhoods have a far better collection record than some so called upper class neighborhoods.
How many pools can I service in a day? A good question, but difficult to answer. The average poolman will clean approximately 16 full service pools a day. Some poolmen will clean 25 to 30 in a day. It depends on the individual and what type of pools he or she is cleaning. The average poolman will clean two pools an hour including driving time. If the accounts are chemical only, he can do many more. If the accounts are commercial, he or she will do less.
A full service customer is a customer for whom a poolman takes complete care of the cleaning and chemical treatment of the pool. A chemical account is a customer who has only their water balanced by the pool service technician. This owner will clean his own pool. A chemical account can take as little as two to three minutes, but should not take any more than five minutes. A commercial account is a public pool: Hotel/motel, park pool, apartment pool, homeowner association, etc... A commercial account can be very demanding. If something goes wrong, they want it fixed immediately. Repairs are great for your pocketbook. The more you fix the more you make. Which brings us to another topic, seminars.
Each manufacturer will put on classes at different times during the calendar year. Check our web site on a regular basis for an update of the seminars in your area. Most of the seminars are free. As far as I know, the heater manufacturers are the only ones that charge a fee for their classes. The fee is fifty dollars for registration. This fee is charged because too many poolmen were registering and filling up the slots and not showing up for the class. Since there was no charge, they lost nothing if they didn't attend. IT IS IMPORTANT TO ATTEND THE SEMINARS. Click here for a schedule of seminars in your area, or click here to continue.
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