Op Editorials
When Homeowners Hold The Last Payment Hostage
One of, if not the, most common complaint we hear from pool builders is that they keep running into borrowers who will not sign the completion certificate because “punch list items” are not satisfactorily complete. This is a common issue for builders who accept unfavorable stage funded loans because often the money the customers are refusing to release far exceed the value of those items.
The simplest way to fix this is to work with a lending source that primarily gives cash directly to the borrower. This essentially makes them the same as if they were paying you cash. You follow your draws, make changes as necessary, and never have something ridiculous like a 25% final draw waiting on an umbrella stand that’s on backorder.
Leaving Too Much on The Table
First of all, a 25% final draw is unacceptable. With the rising costs and prices in today’s market, that can easily be $25,000. Multiply that by how many you could have out there at any given time and the cash flow can really be held up. You shouldn’t have to choose between offering financing and paying your bills on time.
Limit Your Exposure
As the President of Viking Capital, I can tell you that it’s not uncommon for us to speak with builders that have several hundred thousand dollars out waiting to be collected. The 25% final draw is a problem even if they do pay so working with a source that limits that draw to 10% lowers your exposure immediately.
Next, make sure your lending partner has your back. At Viking Capital, we view this as our role as your financing partner. A knowledgeable, well-trained operations director can have a conversation with the customer for you. It’s very important that you know you can lean on your lending partner to help. A call from the lender (vs the builder) can usually solve this quickly. There are two things that generally get customers off the fence in this situation and willing to release the funds.
Explain That Interest is Accruing & So Is Their Balance
They think that because they have not been asked to make a payment, the longer they hold out, the more money they save. We can explain to them that this is not the case. From the moment they take the first draw, they begin accruing interest on the amounts they take.
Helping Borrowers Understand How Interest Works
If they’ve taken 75% of the money (let’s say it’s a $100k pool), they are letting the interest on the $75k continue to build up and, eventually, they will see that their loan balance is increasing significantly while they refuse to pay you, which triggers them making loan payments. So…by the borrower understanding that not making payments is expensive, they often decide, correctly, that they should start paying.
Explain That Their Warranty Doesn’t Activate Until Final Payment is Made
Borrowers don’t generally understand that they have no warranty on the project until they release the final draw and sign off on “substantial completion”. A quality lending partner will explain this in detail and generally, combined with knowledge of accruing interest, they understand that it’s in their best interest to close out the loan and deal with the warranty items afterward. We’ve learned in our almost 25 year history, that when this message comes from a third party, and not the builder looking for his money, it tends to be taken differently.
There is also the fact that a lending partner who knows your track record and trusts you can give the customer added confidence that the punch list items will be completed after they release the funds. A quality review from a partner who has vetted you and had no complaints can really help the situation. It usually boils down to “you chose the builder, you trusted them with your home and a significant project. If you like what they’ve done so far, you can trust them to finish the work after you pay”. We suggest looking at Google reviews as well. If there are no complaints of unfinished projects, they can trust that they won’t be the first.
Final Thoughts
In short, a quality lending partner, like Viking Capital, can save you countless headaches, speed up your cash-flow and make sure your clients have a better experience overall. There is more to a partner than rates. Rates change all the time and it’s impossible (and not productive) to keep chasing the lowest rate source. Choose your lending partner wisely and watch the hassles disappear.
For more information or if you are interested in working with Viking Capital, please contact [email protected].
Talking Pools
Insights From Skimmer’s 2024 State of Pool Service Report
Skimmer, a leading-edge pool service software provider, recently unveiled its “2024 State of Pool Service Report,” a comprehensive analysis based on the invaluable feedback from over 1,700 pool service professionals who responded. This report delves deep into key facets of the industry, such as market challenges, business structures, pricing strategies, technology adoption, and growth plans. Notably, the report culminates from survey responses from Skimmer’s platform of over 25,000 users as well as insights gleaned from broader market research.
Rising Tides of Costs and Strategic Business Responses
One of the more eye-opening aspects to the report, 73% of surveyed pool service professionals reported a commendable upswing in revenue in 2023 compared to the previous year. However, the buoyancy in revenue was tempered by a prevailing concern – rising costs. The majority identified escalating costs as the most formidable challenge faced in 2023, with an anticipatory nod to this trend persisting into the unfolding year of 2024.
A significant number of companies are gearing up to address these rising costs by contemplating price adjustments, with nearly 74% of pool professionals signaling their intention to implement price increases in the current year to sustain revenue streams.
In an exclusive interview with Talking Pools Podcast, Jack Nelson, CEO of Skimmer, underscored this critical issue, stating, “Everyone in the industry feels like costs are going to keep rising. It’s unfortunately an inevitability with sort of inflation. The question is, what are we going to do about it? It’s really interesting to see that most respondents said they were planning on raising prices in order to maintain profit margins.”
Workforce Dynamics and Marketing Strategies
Beyond the realms of financial strategies, the report casts its gaze on the dynamic workforce within the pool service industry. A noteworthy revelation is that 52% of respondents expressed an intent to expand their teams in 2024. This metric supports a positive indicator that most respondents believe the industry will continue to grow rather than contract.
One statistic you may find surprising, the report indicated that the majority of service technicians still rely heavily on the age-old method of word-of-mouth referrals, with only a modest 35% reporting that they’re investing in marketing. Nelson, who has experienced this sentiment first hand expressed that this way of thinking might be outdated.
“So many folks in the industry think they don’t need to pay for marketing because they get a lot of referrals,” said Nelson, “that’s true. You can grow your business that way, but you can grow it so much more quickly if you are spending a little bit of marketing. Because most of the industry is still not doing it, there’s a real chance to kind of take advantage of that. It’s a huge opportunity for ambitious pool service companies.”
Technology Integration: The Digital Oasis
In counterpoint to that, one area where the pool industry is embracing technology is business operations. One pivotal aspect of the report indicated an escalating integration of technology within the pool service industry. Approximately 75% of respondents revealed that they are leveraging software to streamline various aspects of their business operations. This underscores a growing acknowledgment of the pivotal role technology plays in enhancing efficiency, streamlining operations, and staying ahead in a competitive landscape.
“I think knowing your numbers is absolutely critical,” said Nelson, “so is embracing technology to operate your business more efficiently. That’s true whether it’s Skimmer or any other type of technology. I think there’s a tendency to underestimate the cost associated with doing business. Time is money. If you’re accepting a check from a customer because that customer refuses to get on ACH or credit card, there’s time associated with that cost. I think really understanding where you can automate different aspects of your business to save time and money is critical as costs continue to rise.”
Strategic Navigations for Future Growth
One noteworthy observation gleaned from the report is the success of companies that choose to bill separately for chemicals. Businesses charging customers separately for chemicals were on average more profitable than those who opted to include chemicals in the total price of service.
Including the price of chemicals has traditionally been a more straightforward, fixed-rate structure that is perhaps more easily grasped by pool owners and simplifies billing for pool professionals. However, the drawback lies in the susceptibility to frequent price adjustments due to significant fluctuations in chemical costs.
According to Skimmer’s data analysis, the model that charges extra for chemicals, known as the “plus chems” model, emerges as the most effective strategy in mitigating the impact of both fluctuating chemical costs and variations in weather patterns that might affect chemical usage, providing a robust buffer against such uncertainties.
Beyond immediate challenges, the report reveals a spectrum of strategic approaches pool service professionals are exploring for future growth. Notably, 33% of respondents expressed a nuanced interest in reducing their customer count while concurrently focusing on upselling more services and augmenting the overall value provided per pool serviced. Additionally, 43% are pinning their hopes on introducing operational efficiencies to curtail costs and bolster profitability.
Want to take a deeper dive? Read Skimmer’s 2024 State of Pool Service Report or listen to the interview on the Talking Pools Podcast.
Op Editorials
Ground Penetrating Radar is Like X-Ray Vision For Pool Contractors
Ground Penetrating Radar (GPR) – allows contractors to actually “see” inside pool structures. GPR systems are perfect for locating reinforcing steel and determining the thickness of the concrete. Another helpful aspect of GPR is its use in locating elements inside of framed buildings, pipes, and conduits. Though these systems typically are priced at over $12,000, once prorated across many jobs, the cost is minuscule, while the benefits can be monumental.
What is Ground Penetrating Radar?
Ground Penetrating Radar is a geophysical method that uses radar pulses to image the subsurface of the ground. It is a non-destructive and non-intrusive technique commonly employed in various fields, including archaeology, geology, environmental studies, civil engineering, and utility detection. The primary purpose of GPR is to identify and map subsurface features, anomalies, or objects without the need for excavation.
How Does It Work?
GPR works by emitting short pulses of electromagnetic waves into the ground. These radar pulses penetrate the subsurface and interact with different materials and structures. As the waves encounter boundaries between materials, some of the energy is reflected back to the surface. The GPR antenna receives these reflections, and the system processes the signals to create a detailed image of the subsurface. GPR is widely used for utility detection, subsurface mapping, and construction applications, providing valuable information without the need for excavation.
GPR For Pool Builders & Contractors
Today, construction technology is evolving. Ground Penetrating Radar (GPR) has become a valuable tool for pool builders and contractors in various aspects of their work. Here are some ways in which GPR can be beneficial for professionals in the pool construction industry:
- Locating Utilities
- Identifying Subsurface Anomalies
- Mapping Soil Stratigraphy
- Detecting Void Spaces
- Quality Control and Inspection
- Ensuring Compliance with Regulations
- Time and Cost Savings
Using GPR for Non-Destructive Testing
Today, there are a number of intelligent reasons to be using a ground penetrating radar to scan your pool shells. GPR is a non-destructive method to determine what is actually occurring inside of the concrete, without having to drill cores or demolish concrete. Radar allows experts to see the rebar schedule and depth within concrete. Pool construction professionals have even used them to validate the presence of bonding clamps and wire, when inspections were missed (for other contractors).
Use of Ground Penetrating Radar in Remodeling Swimming Pools
For contractors, being able to precisely locate the placement of the reinforcing steel is invaluable. When planning for coring a shell for pool lighting, add plumbing or coring for samples, it is critical to know where the steel is located. Hitting a rebar while coring can easily damage a $500 core bit. Worse yet, a handheld drill binds and kicks back, breaking the user’s thumb.
After stripping the plaster, scanning the shell can definitively determine if there’s sufficient shotcrete coverage over the steel. If it’s insufficient, then the pool can be “flashed” with additional shotcrete (at an additional charge). This will require new coping and tile as well, as the interior dimensions will change. In my own personal firm’s pool remodeling contracts, we have a disclaimer about shotcrete thickness. We will scan the shell for free, but if there is an inadequate amount of coverage, there will be a change order to add shotcrete and adjust the coping, tile and fittings. Think of this as a potential profit center. You can actually show the owners the location and depth of the rebar.
GPR companies charge $500-600 for a 1-hour visit. You can see how quickly owning a GPR unit can pay for itself. After a while, it will actually start earning you money! A Proceq GP8800 can be had for around $12,000 plus the cost of an iPad.
Photo Credits: Proceq
Op Editorials
Mark Zuckerberg Plans To Build a Survival Bunker With a Pool
Facebook founder Mark Zuckerberg plans to build the ultimate survival bunker complete with its own swimming pool.
Mark Zuckerberg, the founder of Facebook and the brains behind the metaverse, is planning on building a lavish new compound complete with an underground survival bunker. According to an exclusive investigation by Wired, the billionaire doomsday prepper is shelling out some serious coin to build the estate, with costs rumored to exceed a whopping $100 million.
Details Emerge About Plans For a Luxury Estate Complete With a Doomsday Bunker
Based on information from both public records and a confidential insider, Wired has disclosed that Mark Zuckerberg’s estate is on the verge of completion. The primary living quarters comprise over a dozen buildings, featuring a remarkable 30 bedrooms and 30 bathrooms. Central to the compound are two colossal mansions, rivaling the size of a professional football field, equipped with offices, elevators, conference rooms, and an expansive industrial-grade kitchen. Evoking a sci-fi ambiance, numerous doors within the compound will be soundproofed, operated through keypads, or designed as “blind doors” seamlessly blending with the surrounding walls.
A tunnel is rumored to connect the two mansions, providing a discreet pathway to the bunker. An additional structure on the estate is set to include a full-size gym, pools, a sauna, a hot tub, a cold plunge pool, and a tennis court. Adding an adventurous touch, 11 treehouses, connected by rope bridges, allow guests to navigate between structures without setting foot on the ground. Notably, Zuckerberg has reportedly hosted at least two corporate events on the property, showcasing the multifaceted nature of this extraordinary compound.
This End of Days Bunker Comes With a Swimming Pool
The compound named Koolau Ranch, sits on Zuckerberg’s purchased land, a tropical haven he bought for a cool $170 million. With plans for the new development leaked, a 5,000-square-foot underground shelter with all the bells and whistles is apparently envisioned to make surviving the end of days a five-star experience.
The investigation by Wired referenced information from sources and planning documents acquired through requests for public records. The documents detailed that the primary residences will be accompanied by a 5,000-square-foot underground shelter, complete with living spaces and an emergency escape hatch.
As plans continue to take shape, one of the most intriguing aspects of the project has surfaced – an 18-foot water tank and pump system. Speculations are rife about its purpose, with rumors circulating that this colossal water reservoir is more than just a contingency plan for the apocalypse. Could it be a key component in Zuckerberg’s ambitious underground pool project?
Billionaire tech moguls are apparently sparing no expense when it comes to preparing for a doomsday scenario. A tell-all book called Survival of The Richest by Douglas Rushkoff reveals that these bunkers are equipped with cutting-edge technology, state-of-the-art security systems, and amenities that make five-star hotels blush.
In the unlikely event of an apocalypse, one can’t help but imagine Mark Zuckerberg’s friend requests suddenly resembling Jim Carrey’s inbox in Bruce Almighty. Forget about FarmVille requests; now it’s all about securing a spot in Zuck’s luxury bunker-ville! Picture this: while the world outside is in chaos, inside the bunker, Zuckerberg’s getting notifications like, “Hey Mark, long time no apocalypse, can I crash at yours?”
As the doomsday clock ticks away, Zuckerberg’s friend count might skyrocket faster than a viral cat video. Everyone from old high school buddies to that guy who accidentally poked him in 2009 will be sliding into his DMs, desperately seeking refuge in the ultimate VIP shelter. The allure of a bunker designed by the creator of the social network could turn Zuckerberg into the most sought-after doomsday BFF.
Interested in learning more? Good luck. Zuckerberg’s compound is now encircled by a 6-foot wall, and, as reported by Wired, an additional layer of confidentiality has been added to the project. Every contracted worker, regardless of their position or role, is said to have been required to sign non-disclosure agreements (NDAs) pertaining to their contributions to the property. This heightened level of secrecy suggests that specific details about the construction and features of the compound are likely to be tightly guarded and may not easily find their way into the public domain.
Featured Photo Credit: MidJourney AI
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