Selling a pool business requires more than just crunching numbers and applying a basic formula. A friend and colleague of mine in the pool industry, learned this the hard way. Despite having yearly sales of $2 million and an EBITDA of $200,000, he initially believed his business was worth between $600,000 and $1,000,000. However, a deeper analysis revealed that the true worth was closer to zero. One thing became clear to me, if you’re thinking of selling your pool company, it certainly helps to know your worth.

Figuring Out What Your Pool Company Is Worth

Understanding the key components that determine a pool company’s value is crucial for anyone considering selling their business. The primary drivers are EBITDA (earnings before interest, taxes, depreciation, and amortization) and multiples of EBITDA.

EBITDA: The Foundation of Value

EBITDA serves as a fundamental indicator, representing the operational profitability of a business. Investors often look for businesses with a 20% profit margin, valuing them at three to five times their EBITDA. For example, a pool company generating $1 million annually with an EBITDA of $200,000, the estimated value could range from $600,000 to $1 million.

Some simplify the valuation process by associating the value directly with revenue. For instance, a business with $1 million in revenue might be considered worth $1 million. However, this simplistic approach neglects the nuances that savvy investors scrutinize.

Factors That Decrease Value: Beware of Red Flags

Merely relying on the EBITDA formula is insufficient. Investors consider various factors beyond the numbers. For example, a business owner not paying themselves a salary, might falsely believe their profit is the true measure of success. However, investors aren’t just buying a business; they’re buying a sustainable operation. Industries with low profitability or thin profit margins are sure to deter investors.

Moreover, risks such as high turnover rates, equipment issues, or seasonal businesses with no new customers can decrease confidence, making investors hesitant to pay a premium.

Going Beyond Simple Math To Find Value When Selling a Pool Company

As businesses scale in revenue, the multiples of EBITDA change significantly. Larger companies with steady revenue streams may be valued at five to seven times EBITDA, or even higher if they go public. Patents on proprietary technology can further elevate the valuation.

Consider Instagram, a company with only 13 employees valued at $1 billion when acquired by Facebook. Patented technology can attract major players and launch bidding wars, driving multiples into the stratosphere.

What Are Investors Looking For?

Investors typically look for several key factors that can make buying a pool company more attractive. These factors can contribute to the overall value and potential return on investment. Here are some important considerations when selling your pool company:

Stable Revenue and Profit Margins:

Consistent and growing revenue streams are attractive to investors. A pool company with a stable customer base and recurring revenue from services such as maintenance contracts can be more appealing.

Healthy profit margins demonstrate the company’s ability to manage costs effectively.

Customer Base and Contracts:

A large and diverse customer base with long-term contracts can provide a predictable income stream and reduce the risk of revenue fluctuations.

Contracts for pool construction, maintenance, and repair services can enhance the company’s value by ensuring ongoing business.

Reputation and Brand Recognition:

A strong reputation for quality service, customer satisfaction, and reliability can significantly enhance the company’s value. Positive customer reviews and testimonials contribute to brand recognition.

Established brand equity can be a competitive advantage and attract new customers.

Geographic Reach:

A pool company that serves a broad geographic area or has the potential for expansion into new markets may be more appealing to investors looking for growth opportunities.

A diverse customer base across different regions can help mitigate risks associated with local economic downturns.

Technological Integration:

Companies that leverage technology for efficient operations, customer management, and data analysis are often more attractive to investors.

Integration of smart pool technologies and other innovations can position the company as forward-thinking and responsive to market trends.

Experienced Management Team:

A skilled and experienced management team is crucial. Investors often look for a team with a proven track record in the pool industry, as well as a history of successful business management.

The presence of knowledgeable and capable leaders can instill confidence in investors.

Compliance and Regulatory Considerations:

Adherence to industry regulations and compliance with safety standards is essential. Companies with a strong commitment to legal and regulatory compliance are generally viewed more favorably by investors.

Financial Health and Growth Potential:

A strong balance sheet, positive cash flow, and manageable debt levels are indicators of financial health.

Clear growth potential, whether through expansion, diversification, or innovation, is attractive to investors seeking a return on their investment.

Environmental and Sustainability Practices:

Increasingly, investors are interested in companies that prioritize environmental sustainability. This may include energy-efficient pool systems, responsible water management, and eco-friendly pool chemicals.

Market Trends and Industry Outlook:

Awareness of and adaptation to current market trends, such as the increasing demand for home improvement services, sustainable practices, and smart home technologies, can enhance a pool company’s attractiveness to investors.

Becoming More Attractive To Investors

For pool companies looking to sell, the time to enhance value is now. Going the extra mile by pushing sales, increasing social media presence, and staying relevant can significantly impact the company’s perceived worth. Introducing innovative products can lead to substantial increases in EBITDA and future sale value.

Even small improvements, such as a 1% or 2% increase, can translate into millions of dollars. Building confidence in your company not only attracts investors but also maximizes the return on investment when it comes time to sell. In the dynamic pool industry, strategic efforts to bolster value will undoubtedly pay off in the long run.

Determining The True Value of a Pool Company

Valuing a pool company requires a multifaceted assessment that encompasses financial metrics, industry dynamics, and qualitative factors. Investors seeking to determine the company’s worth typically delve into the financial health, examining revenue sources, profit margins, and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).

Additionally, the composition and stability of the customer base, existing contracts, and backlog of projects are crucial indicators of future revenue and growth potential. Tangible assets, liabilities, and cash flow analysis provide insights into the company’s financial structure, while an evaluation of the management team’s experience, brand reputation, and compliance with industry regulations contributes to the overall assessment.

Beyond financial considerations, investors scrutinize the company’s position in the market, competitive landscape, and its alignment with industry trends. The geographic reach, technological integration, and commitment to innovation are also pivotal factors. Evaluating risk factors, including customer concentration and potential challenges in the regulatory environment, is essential. The investor’s exit strategy and the company’s future growth prospects, whether through market expansion or service diversification, add further dimensions to the comprehensive valuation process.

One thing is certainly for sure, selling your pool company these days isn’t always so cut and dry. Ultimately, the valuation of a pool company is a nuanced undertaking that requires a combination of financial expertise, industry knowledge, and a thorough understanding of qualitative factors to arrive at a well-rounded assessment of the company’s value. Finding the right buyer who truly understands what your company is worth is the key to getting the right price.

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The 2022 PHTA Builder of the Year shares top tips for service providers looking to get into pool construction

When Kyle Chaikin began building pools, he dove in head-first. He had been servicing pools for more than a decade and just completed his first renovations when a long-time customer asked him to build his hotel pool. “I told him I had never done it before, but I would sure like to try,” he says.

With the customer’s support, he built his first pool. Not long after, Chaikin found himself with two more hotel jobs and his service company progressing into the construction space — a move he says he never intentionally planned.

Fast-forward past a merger in 2011, and Chaikin is now president of Long Island, New York-based Chaikin Ultimate Pools and was named the 2022 Builder of the Year by the Pool & Hot Tub Alliance (PHTA). His company still services pools under the business arm The Ultimate in Pool Care, and Chaikin himself oversees residential and commercial builds — many of them high-end — on the construction side.

To build or not to build

For both service companies and builders alike, the grass often seems greener on the other side. Builders often turn to service to maintain business with customers they built pools for, but the draw from service to construction is just as strong.

“There’s always a push to get into construction from the service side,” says Chaikin. “Sometimes it works out great. In my case, it seems to have worked out, and we’re very happy, and I know lots of companies that have done it.”

However, Chaikin advises that service companies weigh the pros and cons of making the change carefully, as the big jobs in construction can mean “big money, but also bigger headaches.”

“There’s always something, there’s always an issue, whether it’s with a piece of equipment or not being able to get a piece of equipment, or perhaps even the timing of it,” he says.

Scheduling projects can be especially challenging on the commercial side, where you often must meet the demands of customers while at the mercy of general contractors’ timetables.

However, while the world of construction can bring big risks, it can also yield big rewards.

“Monetarily, if you’re doing it well and doing it right, there’s money to be made by being a good builder who does the job properly and on time,” says Chaikin.

How to build a construction business

For those service companies determined to make it big as builders, Chaikin shares his top tips for getting started and ramping up.

Tip #1: Get the prerequisites first.

“The best advice I can give is to go through the proper channels,” Chaikin says. Before starting, you’ll want to have the necessary education, license, experience, and insurance needed to build safely and properly.

• Education and licensure — You will want to obtain and maintain the Certified Builder Professional (CBP) certification if you are to build pools that are economic, efficient, and safe, according to Chaikin. You can earn all four levels of certification, from CBP to Master CBP, through the PHTA GENESIS® education program.
• Experience — “Classrooms are great, but get out in the field and check it out first,” says Chaikin. If you’re starting at square one, his advice is to subcontract out a builder and observe the job start to finish until you can understand and avoid common obstacles yourself.
• Insurance — Make sure your insurance will cover construction work. The insurance you need to build pools is not the same as the insurance needed to run a business or service pools.

Tip #2: Get the proper people in place.

Ensuring you have the correct workers building your projects is critical, as the pool of qualified skilled builders is currently small.

“If you’re building a swimming pool these days, even in a backyard, you need a pretty high level of knowledge to make sure that you’re building it properly and engineering it correctly,” he says.

As safety is paramount, you’ll want to make sure those who are building the pool and overseeing the build know all the building codes in the jurisdiction in which you are working. Be aware that commercial and residential codes are quite different. The laws will vary in different locations as well. For example, in New York an engineer is required to design all the hydraulics and structural components of commercial pools.

Tip #3: Get pricing right.

Supply chain issues have begun to resolve, but builders are still dealing with some unexpected price increases for materials. Chaikin says including escalation clauses or force majeure in building contracts can help provide financial relief. However, this can be difficult on the commercial side.

“These general contractors and developers have become savvy, if not shark-like,” he says, adding that most will refuse escalation clauses and look for someone else.

If you cannot protect against escalation, you will need to make sure that all parties stay on schedule, so your project is priced properly. You can limit your liability by getting a substantial completion date.

Tip #4: Get involved in the industry.

Chaikin says his involvement in the industry has been the most beneficial thing for his business. This means committing to continuous learning, as well as helping to teach others.

“If all our peers are doing the same education tracks, the more knowledgeable everybody is, the better educated everybody is, then the better the industry will be.”

Photo Credit to Chaikin Ultimate Pools

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Hayward®, a leading manufacturer of pool products, has launched an enticing new program called “Get Paid to Upgrade,” aimed at pool servicers, technicians, and builders. The initiative rewards these professionals with a $50 payment for each installation of a qualifying Hayward product, replacing a competitor’s pump, heater, filter, or other select equipment. The campaign not only benefits pool contractors by providing an additional revenue stream but also demonstrates Hayward’s commitment to supporting pool repair companies and their clients.

Hayward’s “Get Paid to Upgrade” program has been designed to be effortless and efficient for pool technicians. Participants can access the program website, www.Promotions.Hayward.com, through any mobile device or desktop. Pool techs are required to enter their email address, upload before and after installation photos, provide the new Hayward product’s serial number, and answer a few questions. Once the verification process is approved, Hayward offers a choice of a $50 digital reward from a variety of partner options, ranging from food and home improvement to electronics and outdoors.

The “Get Paid to Upgrade” campaign encompasses a broad selection of Hayward’s pool products, including pumps, filters, heaters, sanitization systems, water features, lighting, and more. This extensive lineup offers contractors a range of options to upgrade their customers’ pools, while simultaneously earning rewards for their efforts.

A Win-Win for Pool Contractors

Pool contractors like Scott Reynolds, owner of Purpose Pools in Las Vegas, have found the “Get Paid to Upgrade” program to be a boon for their businesses. Currently, his firm ranks second in the nation for submissions to the program. Reynolds described the initiative as a “no-brainer”.

“It’s an opportunity to generate some additional revenue and also to serve our clients,” said Reynolds, “what we do is take the rebates and use them as bonuses for our team members. At times, we’ve also used that bonus to discount certain Hayward products for seniors on a budget. It’s a great representation of how well Hayward supports pool repair companies like ours and of course, the clients that we serve.”

“We’re working together with Hayward on our local community outreach program,” said Reynolds. “We make donations regularly here in the Las Vegas area to local charities and nonprofits. Specifically, there is this one initiative called Project 150, where we’re helping underprivileged high school students get ready for this upcoming school year. Hayward was quick to jump in and get involved and are matching a large donation that we’re making to help some kids out before school starts,” said Reynolds, elaborating on ways his firm is collaborating with Hayward at a local level.

Listen to our entire conversation with Scott Reynolds on the Pool Magazine podcast.

Reynolds certainly isn’t the only one leveraging the rewards offered by Hayward. Pool companies like his are taking advantage of ways they can boost team morale by using the earned bonuses to incentivize their technicians. Moreover, companies are also passing these rewards on to homeowners, enabling them to offer discounts to those homeowners in need.

The success of the “Get Paid to Upgrade” program reflects Hayward’s commitment to supporting pool repair companies. By offering rewards for upgrading customers to their premium pool products, Hayward helps pool technicians expand their offerings and enhance customer satisfaction. The program not only strengthens business relationships but also fosters a sense of collaboration between Hayward and pool contractors.

Hayward’s “Get Paid to Upgrade” program is proving to be a popular program for pool contractors, providing them with an opportunity to earn additional income while delivering top-notch products and services to their clients. The program’s ease of use and broad range of eligible products make it an attractive proposition for pool technicians looking to upgrade their customers’ pools. Moreover, the rewards earned through the program foster goodwill and enable contractors to support their team members and provide discounts to clients in need. As pool contractors continue to cash in on this beneficial campaign, Hayward’s commitment to supporting the industry remains unwavering, further solidifying its position as a leader in the pool products market.

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When it comes to the installation of pool tile, few others in the industry have the wealth of experience and know-how that Jimmy Reed of Rock Solid Tile possesses. His innate ability to create stunningly beautiful tile interiors has helped propel him as one of the leading installers working today. As a recognized expert on the subject, he also knows a few things about adhering to the proper methods and best practices. Consequently, a recent video he posted on social media has generated quite a stir among other contractors and highlights why certain pool tile failures occur.

To get a better understanding of exactly what went wrong in the video, we caught up with Jimmy Reed at the Western Pool & Spa Show in Long Beach to get the full story as well as pick his brain about how to prevent failures like the one he demonstrates in this video.

“This particular project we actually originally bid to perform the installation on several years earlier. It was for a completely different general contractor and pool builder at the time,” explained Reed.

“I was called onto the project by the newer owner, and therefore, a new general contractor and owners rep and so forth. It was a completely different team by the time I was revisiting the project. What happened with the project though was it was failing throughout. The short little clip in the video really only showed a small portion of the spa, but that was consistent throughout the entire pool not just the spa,” said Reed.

Analyzing a Catastrophic Pool Tile Failure

In the video, you can see him pulling large chunks of tile off with his fingers with a minimal amount of effort. This was a disastrous failure where the pool tile had not properly bonded and was absorbing and retaining water.

“The thin-set is soft and gooey. It’s a modified thin-set,” said Reed in the video explaining why this particular failure occurred. “It probably wasn’t cured right. There are ridge marks everywhere. They didn’t knock down the ridges in the thin-set so they probably didn’t get 100% coverage. There’s only probably 50-60% coverage on the back of the tile. The thin-set didn’t bond to the concrete. That’s the bottom line,” explained Reed, “I don’t even see a waterproofing membrane. It looks like they applied thin-set directly to the float.”

Disastrous Pool Tile Failures Can Be a Costly Lesson

Failures of this nature can be enormously costly. “This was a fairly large free-form pool up in Beverly Hills, a little bit above Sunset, so it was in a hilly area. This pool had probably between 2,000 and 2,500 square feet of tile material that, of course, had to be completely removed. Let’s say it’s 2,500 sqft. That would be close to between $50,000 and $75,000, just for materials; and then labor for doing something like that would depend on the installer.” said Reed.

No matter what the client ultimately paid, it would appear from the catastrophic failure witnessed in the video, that it was too much. “The mortar bed was completely saturated and delaminating from the shell as you can see in the video which was just the tile layer peeling right off. There was literally no bonding between the thin-set and the substrate,” explained Reed, “all I had to do was use a screwdriver that the contractor that was there provided me with. It just opened right up and gushed out water that it was holding behind all the tile.”

Identifying The Source of The Problem

“Visually they saw bubbles. When you pushed on the bubbles, air would come out of these big lumps in the tile surface. All you had to do was push on it and things would start flying around. It was pretty bad,” remarked Reed.

“As I recall, there was no evidence of any waterproof membrane. That also tells me that there definitely wasn’t any type of colloidal silicate sprayed on the surface. The float that was applied looked to me to be very uneven and not laid out properly and it was just a very sloppy installation process from what I saw. There were grooves throughout and a lot of trail notch marks below the surface of the pool tile itself. You want to avoid that type of thing,” said Reed.

Learning The Proper Installation Technique

Because Reed sees so many failures in his line of work, we asked him where pool tile contractors could learn the proper methods of installation. “As far as the correct process, I mean, there’s a whole list of steps that goes into that type of installation from the shell out. It’s unfortunate that there aren’t a lot of places that I know of that specifically that train and walk contractors through the proper steps to do a full application,” said Reed.

“I believe Watershape University is working on something at the moment, and I may be participating with them in the near future. Also, Ask The Masters is a really good forum for professionals to inquire and share. But like any other learned trade, mentorship and experience is critical.” said Reed.

Want to take a deeper dive? Listen to our entire conversation with master tile installer, Jimmy Reed on the Pool Magazine podcast.

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Holly Waldhauer is a talented tile installer and the owner of Mermaid Lagoons, a pool contracting firm located in Bunnell, FL. Recently her company was named Trade Member Company of the Year by the Florida Swimming Pool Association, a testament to the quality of her work and the high regard in which she is held by her peers.

In fact, one of Holly’s most impressive recent accomplishments was installing a complete glass tile interior in a pool, a project that showcased her skills and attention to detail. She recently shared a photo of the finished product in Master Techs, a Facebook group for pool contractors. The project received a flood of positive comments from other professionals in the industry.

“I was actually at a state board meeting for the Florida Swimming Pool Association. I’m Vice President of the East Central Chapter right now and I was talking to another board member and he asked me if I was interested in doing his pool,” explained Waldhauer. “I told him that I’d done an entire spa in glass, but that I’d never done a pool. So I accepted the challenge. I just dove in head first and I took my time.”

Holly has been involved in the pool industry since 1997 when she started working with her first husband, who did plumbing, decking, and tile for pools. She quickly discovered that setting tile was her favorite part of the job, and she started doing it exclusively. As word of mouth spread, she began getting offers to work from other builders and eventually started her own company specializing in setting tile.

Over time, Holly expanded her expertise and obtained the necessary licenses that allow her to specialize as a swimming pool trim specialty contractor. Today she subcontracts for her husband’s pool construction firm Waldhauer & Son Custom Pools & Spas as well as other builders in the Palm Coast area.

While working with a spouse might be a challenge for some, Holly says she doesn’t encounter the same difficulties, “We have a rule that we do not talk any business or shop at night. So with that rule, we’re solid,” explained Waldhauer.

On Being a Female Pool Contractor

In a primarily male-dominated industry, stepping outside of her comfort zone to post photos of her work was something Waldhauer worked up the nerve to do. “There are so many trolls on the internet. To get to read all those nice comments from the project I posted really made me feel good inside,” said Waldhauer who explained that being a female who is proficient in pool tile hasn’t come without its challenges.

“When I first started working for other builders, I would tell them that I do tile, and they really wouldn’t believe me, but then I’d show them pictures of my work, and then they’d give me a shot. All those companies I’ve been working with pretty much ever since,” said Waldhauer.

As a woman working alongside men, Holly says that it helps to keep a tough exterior, “You can’t let anyone push you around or make you feel uneasy, which does happen out in the field,” explained Waldhauer, “I’m on a lot of construction sites with 20 men and just me. I’m going to tell women if you’re going to get in this field, trust your intuition. Don’t overdo it. You don’t have to prove to yourself that you’re a man, because we’re not men.”

“If you can’t carry an entire bag of Pool Brite do what I do, cut it in half, because an 80-pound bag of Pool Brite is heavy. Don’t do what I did. I overdid it and I’ve had rotator cuff surgery. Just go easy on yourself and go easy on your body,” said Waldhauer.

Waldhauer has certainly begun establishing a name for herself in the right circles for the quality of her work and sees a bright future for herself in glass tile which she says is one of the hottest pool trends right now. “If you can afford it, everyone is doing glass. It’s the hottest trend, but it’s also more expensive and it’s more time-consuming,” explained Waldhauer, “I miss out on a lot of the easy jobs because I’m stuck doing these big glass tile jobs with vanishing edges and glass on the steps but I would say that is just the hottest thing right now, and it’s not going away.”

It’s clear women like Waldhauer are not only claiming their place in the pool industry, but they are also changing perceptions in the minds of consumers. “When I pull up to a job and homeowners see a woman come out of my work truck, they’re very happy to see me,” confided Waldhauer, “I feel like I’m a little more detailed in what I do. I take my time, and I think that people know that women are a little more patient. One comment I hear all the time, especially when I did that entire pool in glass is that I have a lot of patience but it’s because I’m not in a hurry. I take my time and I do it right.”

With her skillset and sensibility, Waldhauer is demonstrating that women like her are more than capable of tackling physically onerous jobs such as tile setting and says she hopes folks like her prove women have a place in all aspects of the industry.

Listen to our entire conversation with Holly Waldhauer on the Pool Magazine podcast.

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Deckorators, a leading manufacturer of outdoor living products, has recently launched a new deck designer software that allows users to quickly and easily design their dream deck.

With this cutting-edge tool, users can start designing their ideal deck within seconds. The software features a user-friendly interface that makes it easy for anyone to use, regardless of their design experience.

To get a better understanding of the full capabilities of the software, Pool Magazine spoke with Michelle Hendrick of UFP Industries and Jason Varney of Dock and Deck.

“It’s a consumer tool, but contractors can also utilize it as well to really plan out the project that they’re working on and work with a homeowner on ways to look at different colors and how that pairs well with the siding of their house,” explained Michelle Hendrick.

One of the standout features of the Deckorators design software is the ability to choose from a wide range of customizable options. Users can select from a variety of decking materials, including traditional wood and composite options, as well as different colors, styles, and patterns. They can also add railings, stairs, and other features to their design, allowing them to create a truly personalized outdoor space.

Another helpful feature of the software is the ability to visualize your design in 3D. This allows users to get a realistic idea of what their finished deck will look like, making it easier to make design decisions and ensure that their deck meets their needs and preferences.

“You can even pull in a photo of your home into the software as well,” explained Hendrick, this really gives you a good feel for what that deck could look like.” Hendrick claims the software gives users the “design flexibility to really look at different pairings and ways to really accentuate the backyard”.

In addition to the design capabilities, the Deckorators design software also includes a project cost calculator which is exciting to contractors like Jason Varney. The software allows users to see how much their dream deck will cost, making it easier to plan and budget for their project.

“I think it is a tool that a contractor can use too,” said Varney, “DIYer’s will definitely use this to get a basis of an idea or a plan and almost kind of see where their cost price points are going to be before they contact a general contractor to come out and either give them a full rendering.”

“It’s a great start of letting a customer kind of figure out where they want to start out price-wise and get a budget in mind of where they think they need to be as far as materials,” said Varney.

We had the opportunity to experiment with the Deck Designer software ourselves and can see the potential in software that allows homeowners to dream build right there on the spot. We rated the Deck Designer one of our top pool products of 2022. Ease of use, easy-to-apply options, and a simple-to-navigate interface are guaranteed to make the platform a winner for homeowners and professionals alike.

Overall, the Deckorators design software is a powerful and convenient tool for anyone looking to design and build a new deck. Its customizable options, 3D visualization capabilities, and project cost calculator make it easy to create the perfect outdoor space for any backyard. So, it can be a great help for homeowners, contractors and designers to create their dream deck.

To take a deeper dive into what the new software is all about, listen to the Pool Magazine podcast and our interview with Michelle Hendrick and Jason Varney. During our discussion, we talked about the new Deckorator design software as well as some other exciting new additions that you’re bound to see while making the rounds at this year’s trade shows.

Ready to try Deckorator’s new Deck Designer? Visit https://bit.ly/deckoratorsoftware

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A lot of builders compete on price and operate on narrow margins. This leaves little revenue to perform warranty repairs or to correct errors made during construction.

These builders oftentimes rely on the profit from the next job to fix mistakes from the last project. As the economy slips into a recession, these revenues shrink even more and the pool of funds available to remediate mistakes dries up.

Delays in performing repairs increases and customer frustration grows. As customer complaints intensify, the quantity of lawsuits rise.

The solution is simple, but multi-fold:

1. Fix your errors and warranty call backs promptly.
2. Maintain open lines of communication – don’t ghost clients or feed them BS.
3. Increase the contingencies built into a project. Set them aside into a separate account, and don’t spend them upon each project completion.
4. Improve quality control and reduce errors & mistakes.

Now, more than ever, as the economy constricts, clients will become more frugal and conscience of what is occurring in their yard. They will be less tolerant of delays and excuses.

Avoid the vortex.

This was a post originally published on Facebook that received an enormous response from peers within the industry.

Thoughts from some of my followers:

I don’t play the race to the bottom game to get the job. I have my margins and if someone goes cheap, they can have the job. If I don’t make what I need to, I walk away.

Michael Koenig

Another way to remediate this is to ensure that your profit margins are adequate enough that you don’t have to rob Peter to pay Paul. If you’re actually performing quality work, the customer should be charged accordingly. Quality work costs money; most reasonable customers understand that.

Michael Calore

Great advice. As a a 40+ year pool builder I wish just one of ex employees that decided to go into business for themselves would take the time to learn the business. I wouldn’t have made a career of repairing (and being paid well) for repairing others mistakes.

JA GROW

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If you are a contractor who is involved in pool construction or making other outdoor site improvements, you might be required to obtain a contractor’s license and a license bond. Swimming pool contractors in some states are required to obtain specialized licenses, and bonds are frequently required as a condition of licensing. For example, California requires swimming pool contractors to obtain a swimming pool contractor license, which carries a bonding requirement as a licensing condition. Other states, including Florida and Texas, also require bonds for pool contractors who perform electrical work on pumps and other components of pool installation.

Even if your state does not require you to obtain a specialized license for pool construction work, you might have to get a general contractor’s license and post a bond to perform work above a certain amount. In addition to license bonds, there are other types of contractor bonds that you might need based on the size of a project or the requirements of the project owner. Here is some information about contractor bonds for pool contractors and those who perform work on other outdoor improvements.

What Is a Surety Bond?

A surety bond is a legally binding agreement between the following parties:

• Principal – The individual required to post a bond

• Obligee – The party, which might be a governmental licensing authority or private project owner, that requires the bond

• Surety – The bond company that approves and issues a bond as a guarantee the principal will comply with its legal and contractual obligations

About Surety Bonds

Surety bonds are not a form of insurance. Instead, they protect the obligee and the public against potential misconduct on the part of the principal. When a bond company approves a surety application, the principal must sign an indemnity agreement through which it agrees to hold the surety harmless in the event of a filed bond claim and loss. Ultimately, the principal is the party who will be responsible for paying valid bond claims that might be filed.

Types of Bonds

License bonds are bonds that might be required as a licensing condition before a contractor can secure a license. These bonds might be required by a state licensing body or by a city or county before a contractor can obtain a license or certificate to perform work in the jurisdiction.

Many contractors who perform work on outdoor improvements or construct pools might also be required to post contractor bonds. A contractor bond is a type of surety bond that guarantees the contractor will perform work that meets the provisions called for in a contract.

3 Most Common Bonds

These bonds might be required for public projects valued at $100,000 or more. Many private project owners also require bonds before they will enter into contracts with pool contractors and those who will perform work on other outdoor improvements. The following three types of contractor bonds are common:

• Bid bond – A bond that might be required as a condition of bidding on a project that guarantees the winning bidder will follow through and perform the contract at the bid price even if the contractor forgot to include something in the bid.

• Performance bond – A bond that might be required by a public or private project owner that guarantees the contractor will perform according to the provisions called for under the contract and will not complete substandard work.

• Payment bond – A bond that guarantees the general contractor will pay its subcontractors and suppliers for their labor and materials that protects the subcontractors and suppliers as well as the private project owner. Payment bonds protect private project owners from potential mechanic’s liens that might otherwise be filed by parties that have not received timely payments for their work from the general contractor.

Public-funded projects worth more than a threshold amount might require contractors to post all three of these types of bonds since they guarantee the completion of the project to specifications, prequalify contractors before they can submit bids, and provide payment protection.

Savvy private project owners likewise might require contractors to post performance and payment bonds to guarantee the contractors they choose will perform the work as promised and will pay their subcontractors and suppliers.

How Do You Get Bonded?

To get bonded, you can apply for the specific types of bonds you need by applying to a bond company. The surety bonding process involves an extension of credit from the bond company to the contractor, so the application will be sent through an underwriting process. The factors that a surety will consider to determine whether or not to approve a bond application include the applicant’s credit, business experience, working capital, stability, reputation, and others. Evaluating these factors helps the surety determine the degree of risk it would face if it approved the bond application.

If you have a great credit score, substantial experience, strong working capital, and a good reputation, the surety company will likely determine you pose little risk and provide you with a bond quote of as little as 1% of your required bond amount. For example, if you are required to post a $25,000 surety bond, you won’t have to pay the full amount of the bond. If you are quoted 1%, you will instead need to pay 1% of that amount of $250. By contrast, if you have poor credit, your application might be denied, or the surety might provide you with a higher quote of up to 10%. In that case, you would have to pay $2,500 to secure your bond.

Renewing Bonds

Bonds are not permanent. Instead, they must be renewed. Once you have posted the bonds you need, you should make sure to pay attention to when they expire and apply to renew them before they do. If you avoid bond claims and maintain good credit, you can anticipate continuing to receive low bond quotes. If you had to post a larger bond premium because of a low credit score but have worked to build your credit since you originally posted your bond, you might find that you receive a better rate when it’s time to renew.

Surety bonds are a common requirement for contractors who construct pools or complete other outdoor improvements. Making sure that you understand your requirements and that you always comply with the law and your contractual obligations can help you secure better rates and also build a strong business reputation.

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(Alexandria, VA) – The Pool & Hot Tub Alliance (PHTA) today announced it is jumping into the waters of workforce development with its Pool Professionals Pipeline, a new program designed to help its members find workers, drive awareness amongst today’s jobseekers, and foster long-term career progression in the pool, hot tub, and aquatics industry.

“It’s no secret that many industries and businesses today are struggling to find and retain employees, and this is particularly true in trades such as ours,” says PHTA President and CEO Sabeena Hickman, CAE. “Our members are looking to PHTA to help fill that gap and we’re ready for the challenge. We are incredibly excited to share this new program with our membership and give them the tools they’ll need to compete in today’s labor market while working to attract a skilled, diversified, and thriving workforce.”

Underneath the PHTA’s Pool Professionals Pipeline workforce development umbrella is its external industry awareness campaign and jobseeker website, Work in Aquatics and workinaquatics.com, launching in 2023. Work in Aquatics will seek to advocate for trade professions by highlighting the numerous advantages, training and apprenticeship opportunities, job openings, and potential career progression tracks that are available working in the pool and hot tub industry. From construction labor to lifeguards, sales representatives, entrepreneurs, and even engineers and designers, there are many industry sectors and paths along the way that PHTA wants jobseekers to explore.

“This program is a game-changer for our industry as it works to drive qualified talent to our respective businesses and our industry as a whole,” says PHTA Chairman Charlie Claffey, owner of Claffey Pools. “To be successful, we’re going to need everyone on board as we work to put the industry on the radar of those searching for an alternative path to college; a rewarding career in a healthy lifestyle environment; the ability to work away from a desk; creative freedom through modern design; and lifesaving skills through swim instruction. The possibilities that exist in the aquatics industry are endless and once you begin in this line of work, you’ll never want to walk away. Let’s share that passion with the next generation of workers.”

A steering committee comprised of PHTA members, industry partners, and PHTA staff will serve in an advisory role to help guide programming, funding, and more:

• Charlie Claffey, Claffey Pools
• Joseph Laurino, Ph.D., Periodic Products, Inc.
• Andrew Levinson, PoolCorp 
• Elizabeth McMurray, Florida Swimming Pool Association 
• Albert Miller, Hayward 
• Dominick Mondi, Northeast Spa & Pool Association  
• Kevin Post, Counsilman-Hunsaker  
• Teri Wiltshire, Master Pools Guild  
• Lisa Zarda, CAE, US Swim School Association 

Members, partners, and others interested in becoming involved in the PHTA Pool Professionals Pipeline can contact Seth Ewing, PHTA Senior Director of Member Programs & Services, at sewing@phta.org.  

Media Contact:
Amy Willer
Associate Director, Marketing and Communications
703-838-0083, ext. 121 | awiller@phta.org

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When it comes to the waterproofing of residential and commercial pool vessels, Basecrete Technologies has long been a leader in waterproof bondcoatings for the pool and spa industry. Recently, Pool Magazine had the opportunity to catch up with Vito Mariano and Christopher Gates to discuss the newest innovation to hit the pool trade, OnDeck, a new system they claim will revolutionize waterproofing.

The OnDeck Difference

“The actual application process is super simple. It can go horizontal and vertical and can be textured as the installer sees fit. Heavy and light textures can be rolled on, shot on, or troweled on but it’s based on the same science as Basecrete,” said Gates, who will be managing the OnDeck product.

One of the primary reasons the new system is predicted to be a surefire hit with pool contractors is due to its versatility, which Gates says will be a game-changer. “You can take a new project and marry it to an old project. Our material allows you to build up an old existing deck that’s chipped and broken. You can clean it out and build up to two-inch lifts using the material to build that up so that it’s seamlessly the same elevation as the new concrete. Then you coat the whole thing with OnDeck and it all is just beautiful and elegant. That all happens out of one bag and bucket of polymer.,” explained Gates.

Versatility and Customization

OnDeck is sure to appeal to contractors who have experienced frustration with other products in the past said Gates. As an industry veteran, he knows those frustrations first-hand, “you have to buy a bag of this for horizontal, and a bag of that for vertical, and a bag of that for waterproofing. Ours is just real simple,” explained Gates.

Color options and customization are a big factor when it comes to decking materials. OnDeck promises to alleviate many of those concerns as well. “The last coating is a pigmented stain and sealer which comes in seven different colors. We operate in a light base and a dark base so you can tint a custom color,” said Gates, “if you have a big project, say you were doing a stadium, for example, and you wanted to have the colors of the team, you can get your own color mixed with a lighter or darker base.”

A Cost Effective Waterproofing System

The OnDeck system is all the brain-child of Vito Mariano who has a history of producing award-winning products of this nature. His strategy for propelling the system into the market is to win contractors with a better product they can have at a smarter price point than what they’ve already been accustomed to using.

“Price per square foot is number one,” said Mariano, “OnDeck is not expensive and it’s a fast waterproofing decking system at the same time. Now you get all these new benefits that the industry isn’t used to; instead of just your typical low-end cementitious spray, roll on, epoxy or latex-based material. We’re staying focused on simplicity, our waterproofing capability, and price. That’s very important out there.”

Bringing OnDeck To The Industry

Mariano is confident in having an industry professional like Gates to help drive the product in the market. “I’ve been producing OnDeck for a long time. The formula goes back many years,” said Mariano, “and I’ve used it again and again for my own applications. I never really had the time to pursue it because I was busy with other products. We think Christopher will be ideal for us. He’s got an edge because he knows the industry and he gets it. “

The success of Basecrete has industry insiders eager to demo the OnDeck system. “I had a phone call from a gentleman I did a contract with a while back who wanted to thank me. He told me ‘Where has this product been? I’ve used everything out there in the last 35 years. I’ve never seen anything this good before.’ He now has 60 driveways totally converted to the OnDeck system and will be doing our training,” said Mariano.

Mariano expects many brand ambassadors to come forth and champion the product in the coming months. “We’ve got folks like Jose Garcia from Barefoot Pools in Arizona, chomping at the bit to get this product. He does phenomenal Basecrete applications on hundreds of pools. Those are the kind of companies and applicators that we’re going to go for,” said Mariano.

Gates, who has a long history in the pool industry, previously with California Pools and San Juan Pools; says the timing is ripe for a product of this nature.

“On pool and deck projects many years ago we started doing polymer overlays and acrylic top coats. Every one of them kind of marched to the beat of their own drummer, and you had to figure each system out. You’d try to stick with one that you could use if you knew the idiosyncrasies of a given system,” explained Gates, “when Vito started telling me that it’s the same bag to make the material that goes on the flat deck, that goes up the walls, that waterproofs the corners; it’s just different mixing styles – that’s got me excited. That coupled with this fellow he’s talking about who will doing all the training for our team members that are coming on board makes it a no-brainer,” explained Gates.

Listen to our entire conversation and learn more about the OnDeck system on the Pool Magazine podcast.

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