Although it may not seem obvious, the swimming pool industry is low-hanging fruit if you want to establish your own small business. Swimming is the fourth most popular activity in the United States. Catering to this huge demand are millions of pools (by one account, over 10.4 million), both public and private. Of course, the next question would be, will the swimming pool market sustain? Is there any danger of a downturn? One of the drivers of swimming pool construction, new housing starts, gained a sustained upswing around 2012.
As of 2016, by one estimate, the potential untapped market for swimming pools stands at 25 million households. By potential untapped market I mean households that are standalone homes (not apartments) whose occupants meet the economic profile (excluding fixed income households, for example).
Adding to that is the Tax Cuts And Jobs Act which is poised to enable individuals and corporations to hold on to more of their income and increase economic activity. This would almost certainly lead to more demand for pools, not only from individuals but also from corporations as they expand their facilities. None of this considers the cleaning and maintenance of the existing 10.7 million pools (public and private) which by itself is a billion dollar market.
Having established the case for entering the business, we proceed to the how. The first step in starting your business is developing a plan. It’s not enough to just have a dream of having your own swimming pool business.
You must decide whether you want to
- Design exclusive pools (like the glass-bottomed pool overlooking the street in Houston, Texas) in which value unlocking depends on identifying the more affluent and fashionable niches in the country. You can’t drive such a business on volume because most users may not be able to afford such pools; or
- Design the average swimming pool where you can attempt to ride high on volume; or
- Tap the inflatable pool market which should require less capital.
- You can even focus solely on pool maintenance.
Of course, you need to have the technical expertise of your chosen field. However; a key part of this decision which is often overlooked is capital requirement. You may have the technical credentials to be able to design exclusive pools but can you raise the money on reasonable terms? If your business fails, can you absorb the loss?
Next step should be to identify your market. It can’t be that your target market is the street you live on. You can’t be successful at your business and be a couch potato at the same time. California for example, is a massive economy – 6th or 7th largest in the world and rapidly growing – and is home to a large number of businesses, among them giants like Facebook and Google, a large number of whose employees will no doubt be able to afford swimming pools.
On the other hand, during and after the recent drought in California, many legal restrictions have been enacted on water usage which impacts the swimming pool industry. So, you need to be very careful in choosing your market.
After that comes legal requirements. Generally speaking, you have to get your business registered, obtain a tax identification number and sign up for a liability insurance plan. The details may vary across jurisdictions hence you should do this only after selecting your market.
Having done that, you need to draw up a detailed business plan. When you finish this stage you should be able to chart the revenue flow and approximate your earnings. You know what your legal expenses will be (registration fees etc). You have selected a liability insurance plan with an affordable premium.
What is the equipment you will need? Don’t buy the first one you see. Search online for bargain buys like this one for sand filter pools. What kind of staffing do you want? Do you have a clear idea of the kind of wages you will have to pay?
Another thing you should consider is whether you can hedge your business against a downturn. For example, if you’re planning to open a pool maintenance business, try to win a contract to service public pools. This may require higher expenses in the form of additional certification but it should provide a more stable contract and win you publicity. I can’t detail all the considerations you should make but there are various opportunities out there for enterprising entrepreneurs.
For example, you can get route broker in many markets who will sell you a pool maintenance route for a fee. This way you can get an assured starting market. This may seem crazy to many but it is true! Finally, you set rates. Initially, you would do well to give introductory discounts but remember you have to break even ASAP.
The last step is publicity. Print business cards and fliers, start a website and open Facebook and Twitter accounts for your business. Then, keep your fingers crossed that orders keep coming in!