Our pool business as a road to retirement

[Arif]

Ok. I've been kicking this idea around but not sure if it is ethical and I'm looking for input. Our long term goal is to have about 200 accounts. Once we reach that number I plan to package up the difficult excess accounts and sell them off each year. This method has two benefits:
1. Generate additional cash from the sale of accounts
2. Reduce the number of high maintenance accounts

Also note that businesses who buy accounts have a 90 day guarantee so if the customer cancels they will get a refund on that account.

[REWahoo]

I sounds not only ethical, but downright smart.

Question is, who are you going to find who will pay you to take your problem clients off your hands? And if you do find someone and they buy once, will they buy again next year or will you have to find another sucker buyer?

[Arif]

Quote:

Originally Posted by REWahoo I sounds not only ethical, but downright smart. Question is, who are you going to find who will pay you to take your problem clients off your hands? And if you do find someone and they buy once, will they buy again next year or will you have to find another sucker buyer?

Since REWahoo said it must be ok!

Actually people from all over the country buy accounts just like I did last year. Most buyers are people that aren't currently in the business so there should always be a steady flow of buyers. Plus by then I could higher a customer service rep that handles all the problem customers until we sell them. That's the plan anyway.

[Nords]

Quote:

Originally Posted by REWahoo I sounds not only ethical, but downright smart. Question is, who are you going to find who will pay you to take your problem clients off your hands? And if you do find someone and they buy once, will they buy again next year or will you have to find another sucker buyer?

Let's read that question again, this time substituting the phrase toxic waste "subprime mortgages" for "problem clients"...

[Arif]

Nords,
I wouldn't call them toxic waste or subprime mortgages. These customers are high maintenance customers that take up a lot of time but pay on time. When I was buying my route my main concern was, "are the customers paying you on time." The buyer also has a 90 day guarantee which I used a few times when buying my routes.

[Nords]

Quote:

Originally Posted by Arif These customers are high maintenance customers that take up a lot of time but pay on time.

No, I agree with you, as long as there are buyers for this kind of seller then with full disclosure you should be fine.

I'm a bit bemused/surprised that the buyer would think that they'd prefer to have a customer you're tired of dealing with, and that the buyer thinks they can do a better job than you've done, but then that's not your concern!

[Arif]

Ok. Well, the last couple of weeks have been quiet. We're now looking for another employee so I can get my hours back down due because of the new commercial accounts. I posted an ad on craigslist and recieved about 20 emails and resumes in the first few days. One thing I've learned from past interviews is that people who aren't used to working outside in 100 degree heat don't last long. If an applicant doesn't have pool experience but worked in construction or landscaping they generally do well. Those who worked in an office for the last 5-10 years usually won't make the cut.

I've been debating if I want to use the pizza shop model or the pest control model. The pizza shop model utilizes the employees truck and pay him mileage depending on current gas prices. The pest control model is buying a truck and have the employee use it for his route. Obviuosly there are pros and cons with each model. I've decided for now on the model with the lower upfront costs, pizza model. I don't plan on keeping the business for more than 5 years (even though I only planned on staying in the Army for 3 years and ending up serving 11) so I figure why spend money on assets that require maintenance, insurance, and gas. The employee also benefits in that the rate I pay is about twice what they pay in gas so the excess covers the maintenance of their vehicle. Sometimes this does cause a problem as I get applicants that are qualified but have a car instead of a truck. I don't allow employees to carry chemicals in their car due to the fumes and danger of transporting it in a closed vehicle.

Our general liability insurance is due to expire next month. The membership in the pool association includes general liability of $3 million (at half the price) versus the current $1 million coverage I have. So I'll be canning the current GL insurance at the end of the month. Now if I can just find cheap worker' comp. insurance.