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Old 07-07-2009, 09:06 PM   #41
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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.
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Old 07-07-2009, 09:10 PM   #42
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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?
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Old 07-07-2009, 10:16 PM   #43
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Originally Posted by REWahoo View Post
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.
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Old 07-07-2009, 11:24 PM   #44
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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"...
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Old 07-08-2009, 07:04 AM   #45
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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.
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Old 07-08-2009, 09:37 AM   #46
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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!
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Old 07-20-2009, 06:24 PM   #47
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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.
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Old 12-07-2009, 11:06 AM   #48
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Arif,

Are you still around? Been a while since you have posted here and I have been curious as to how things are going for you and your business.
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Old 01-16-2010, 10:05 AM   #49
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Can't believe it's been almost six months since I posted last. Thanks for those that inquired about how we were doing.

Well, shortly after I posted on here my business dropped about 20% during what usually is the busiest time for the pool industry. Our customers were feeling the effects of the recession and could no longer afford our services. It felt like all my customers worked for the same company and were being laid off. At that time I cut out all nonessential activities and focused on increasing business.

As I looked at my list of customers I saw a trend that I hadn't noticed before. The makeup of our customers was changing. We were losing residential customers and gaining HOAs (home owner association) pools. I decided to focus on that area of the business that was still growing. I started talking with property managers who worked for HOAs. The strategy worked and within 4 months we were back on track and February will be an all time high from a net income standpoint. We even won a government contract to maintain an Olympic size pool at a local college. There is also another opportunity to bid on a contract for all the community pools in town worth over $100,000. That contract comes up for bid every four years and we'll be keeping an eye on that when it's time for renewal.
I'll be interviewing another technician to handle the increased workload. We even started another business a couple of weeks ago. This new business has the potential to be very big and I'll discuss it later as we gain traction.
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Old 01-16-2010, 12:48 PM   #50
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Excellent news, Arif! Way to go with focusing on the positive instead of wallowing in the negative. To me that's the sign of a good business person. Good luck going forward.

By the way, you think you could get me a pool pass if I come visiting?
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Old 01-16-2010, 02:03 PM   #51
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Great update. Thanks, Arif!

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By the way, you think you could get me a pool pass if I come visiting?
Yeah, no problem, you'd be hauling the vacuum, the skimmer, and a couple gallons of chlorine...
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Old 01-16-2010, 02:20 PM   #52
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Arif, nice to hear you are doing well in not-so-well economic times. I have to admit I'm not really surprised based on what I've seen of your business acumen. Like Harley points out you're likely to succeed because you focus on finding a new strategy rather than lamenting about one that no longer works.

IOW, you need to continue be...
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Agile, mobile and hostile.
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Old 01-16-2010, 02:22 PM   #53
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Congrats Arif! Nice to see a success story. The pool business seems like an interesting endeavor. The water and chemistry are interesting to me. But where I live I need to focus on ice rinks.

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Old 01-16-2010, 03:54 PM   #54
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Great way to run a business on data and not emotion.
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Old 01-17-2010, 11:54 AM   #55
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Thanks everyone.
It just occurred to me that we started our business at one of the worst times in history. To tell you the truth it wasn't that bad. It made us rethink our strategy and question everything. We even thought about using vertical integration by going into the wholesale pool chemical business. We got so far as finding a supplier in India, government contract sources, and a customs broker. Ultimately we decided that this strategy didn't fit our "ultimate business" characteristics. By going through the process we realized that our dream business would be online, little to no overhead, and minimal number employees required. Does that exist? I believe so, and this year we will aggressively expand in that direction. All of this started from a way to grow our current business.

Quote:
By the way, you think you could get me a pool pass if I come visiting?
Sure, but those buckets of tabs get heavy after the 7th or 8th stop in 100 degree weather.

BTW it feels weird swimming in a pool now. I constantly wonder if the chemicals are balanced.

Opportunities are everywhere, you just have to be willing to go out and grab them. I read a lot of business stories for inspiration. One of my recent favorites is this one:
Why a CEO Needs to Have a Plan B: An Interview with Jack Stack, Forecasting Article - Inc. Article
The article totally changed the way I think about business survival. Enjoy
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Old 01-17-2010, 12:03 PM   #56
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Thanks for posting that, Arif. Its a shame more CEOs don't think like that guy. The world would be a better place.
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Old 02-04-2010, 04:45 PM   #57
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Well Obama is proposing to "give" $5000 in tax credits to small businesses that hire employees this year. Although the specifics have not been fleshed out it hasn't stopped me from analyzing how it will affect my business. To be honest I think the tax credits should go to companies that are already in the black. Why? Well if my business wasn't making money I doubt a $5000 tax credit would help much. Now if a business that's profitable gets the credit they can use the tax credit to increase their revenue exponentially.

For example, say a company is spending $10,000 per year on advertising and from those funds they can generate $100,000 in revenue. Now if they increased their marketing budget by 50%, theoretically they should be able to increase their revenue by 50% based on the additional advertising budget. So that $5000 credit created $50,000 in additional revenue and more jobs. They could also reduce the $30 billion budget for the program down to $15 billion and use the balance to pay down gov't debt. Which should be a win win for Republicans and Democrats. Now to be sure this is a simplistic example but I think the premise is sound.

Now take a business that is losing money. That $5000 will probably go toward keeping the lights on and paying back debt. This use of the credit will produce limited growth which is what the credit is suppose to produce.

For our pool company we'll probably use the tax credit to buy another truck and more targeted advertising. For our new business (if it qualifies)we'll use it to do trade shows, lead generating services, and direct marketing.

I welcome the opinions of those that differ in my views.
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Old 03-23-2010, 04:35 PM   #58
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The great thing about owning a business is if you search inside your business you'll learn something new everyday. I bought a book called "Duct Tape Marketing" by John Jantsch and highly recommend it.
One of the lessons that resonated with me was that every business owner has a story. I found my story while brainstorming in between each chapter. For those that don't know, my wife and I spent 11 years in the Army with 8 of those years as officers. We used all the skills that we learned in the Army but we weren't letting our prospect or customers know it. I updated our ads noting that we're veterans and that we instill in our business the same values that we learned in the Army.
I also realized we were the only pool company that was independently certified by our lead generating service. I added that little fact to all my advertising as well. Once my online ad was updated the number of calls easily doubled. I'm no longer just another pool business in town but a certified and professional pool business.
Our website is finally completed with photos of our customer pools and our certifications. We also signed up for google adwords which will be live by this week. I am a little apprehensive about adwords because I don't use them when I'm searching on google. So we'll see how that goes. As you can see we are getting ready for the busy season and so far business feels like it will be much better than last year.
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Old 05-30-2011, 11:04 PM   #59
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Arif,

Thanks very much for your informative post and sharing your experiences. I've learned a whole lot about the pool cleaning business from you in just 20 minutes of reading.

I'm currently employed in Austin as a Web Marketing Manager, and I'm thoroughly burnt out on the corporate world. So a pool cleaning business is one of the options I'm looking into. But I do not want the hassle of employees, I'm thinking about a one man operation.

My question to you is, how well could one do in this business going it alone?

Thanks for any advice

Steve

P.S - This is my first post in the forum, I registered specifically to ask this question. But this looks to be a great forum for anyone interested in escaping the corporate grind. Also, my apologies for bumping such an old post.
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Old 06-03-2011, 04:16 PM   #60
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Welcome to the forum, Smichener.
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