Tuesday, February 25, 2014

He's my partner?? "From Classroom to Pump Room" Part: 6

I didn't quite have a plan, but by the third summer, incredible as it seems, we were asked to take on a few more pools. Amazing!! So, we went to our next phase which was to hire some of our student athletes, who we knew were great kids, to clean the pools. I also ran an ad in the local newspaper in the help wanted section looking for people with pool experience. Sure enough, I had a number or responses to the ad. Boy, was that ever interesting. Every weirdo that ever was in a pool responded with varying degrees of expertise and just plain baloney. One guy though, a young married guy, responded. He had been working in one of the mountain ski resorts, had been sent to pool classes and had been repairing the resort's pool and spa. He and his wife were relocating to Denver and his plan was to start his own spa business. We met with him and explained that we had no intention of starting a spa business, and that he was free to do that if he would moonlight as our pool repair guy. He needed the money, we needed someone to work for $20.00 an hour instead of the $60.00 an hour we had been paying the other pool company. Heck, now we would charge the $60, pay him $20 and pocket the rest. Sweet!!! Again, the plan was, he would do our repairs using our wholesale parts, which we then charged retail for, my partner would be with him learning about pool repairs. Sounds like a plan, right?? Well, it would have been had my partner not been battling some demons of his own. Looking back, as mad as I was at this young guy, and how I thought he was a complete pirate at the time, I now realize that my partner left us ripe for the picking. How? He never went with this young guy. Instead he trusted him to be honest and ethical. He trusted him that is, until this sonofagun replaced us at two accounts. He stole them right from under our noses. I remember pulling up to one of these accounts as this young pirate was there meeting with a board member. They both looked at me as I exited my car and walked toward them. I swear, they both looked like they had seen a ghost and were fully expecting me to walk up and deck the guy or pull out a weapon. Instead, I just walked up and verified that he had taken the account. The board member stated something along the lines of, "Well, he was the one my partner had said to call." Yup that's right. My partner went and told this board member to go ahead and call our employee!!! I was so pissed I could hardly move. I confronted my partner and he hemmed and hawed, but it was at this time that I was finally seeing that my partner was, ugh, LAZY. He wanted the money, he wanted to tell people how he owned a profitable business, but he was too damn lazy to actually see that we were still in the infant stages when a parent has to watch every step carefully.  About this time, I began to notice something else. My partner would have lapses in memory, he would lie about communicating with property managers and homeowners, and lastly, he little by little was showing signs of a drinking problem. Later, this same summer, I answered a call from a community manager at one of our pools. He told me that the board had decided to fire us due to poor response. He went on to tell me that he had called my partner numerous times, left messages, all regarding an issue with one of the rest rooms at the pool. All my partner had to do was respond. He needed to call him back, fix the problem himself, find a plumber who we would pay full price to fix it, any of those. Instead, he was paralyzed with alcohol. He just stopped functioning. Of course, when I confronted him he had the usual excuses. But he knew and I knew that I was more than holding up my end of our deal. His deal went from making repairs, to being on site watching someone make the repairs, to at least making the call to have someone make the repairs and see that it got done, to doing none of those. And still, at the end of the summer, we made more money than we ever should have. Begrudgingly, I shared the profits with him 50/50. The point here is, while he was screwing me over, though alcohol was to blame, I was the real idiot. I was so loyal to him. For God's sake, he had a classroom right next to mine, he helped me finish my basement, I coached basketball with him, we were a team...not.

Saturday, February 8, 2014

"From Classroom to Pump Room" Part 5: Fake it til you make it! How a teacher faked it and succeeded.

We decided that we would do the pools each morning, seven days a week, the first summer and began with three community swimming pools.
Considering we had no idea exactly what we were doing, even though we had passed the certified pool operator's test with flying colors, we actually did succeed in having a great summer. Unbelievably, we actually made money right out the gate. No one was more surprised than I, when I realized we may have to become incorporated.  I have no idea how much it is to incorporate these days. I remember how thrilled I was to report to Jerry that we were about to each pocket $3500.00. As I've already said, it was many years ago so by my best recollection, we decided to keep $1000.00 each, $2000.00 total, in the bank for operating funds the next summer. You have to realize, this was big money to make in one summer for two teachers. And, it did two things for me. It convinced me that having the chance to make as much money as we could was as exciting as I had hoped, and it convinced me that we could expand to more pools. I mean, if we could stumble through one summer with three pools, make money and have the property manager tell us how awesome we were (without knowing just how much we faked our way through), then we could certainly perfect the day to day servicing procedures. I had, out of sheer necessity, located a competitor to actually bail us out. I had to swallow some pride, but we befriended a couple of pool guys who knew what they were doing as far as pools go, but were making the same customer service mistakes we founded our company on not making. I will never forget a call I made to this company. We had a pool and for the life of us, we couldn't get suction at the pump. True story...I was so hell bent on this business working, that while my partner, the one who was supposed to be the "mechanical" guy, was not figuring this problem out, I was in a pool, with unheated water, wife holding me down with a long pool vacuum pole, while I was sticking an inflatable rubber hose attachment to the main drain. We were convinced there had to be some sort of a suction leak between the pool and the pump. For the life of me, and man was that water cold, I couldn't figure out why we could not get the water to completely fill the pump basket. It would struggle, some water would start to trickle into the pump, but just as quickly, it would stop. So, back to my embarrassing moment. I called this company and was talking to one of the young owners. He asked me, "Have you checked the fitting on the suction side and the discharge side of the pump?" I swear this is true. I did not know what the hell he was talking about. I could tell from his tone of voice he was completely amazed, as well he should have been, that this moron didn't know the suction and discharge sides of a pump. Anyway, he finally explained to me what this meant. Though I still didn't know the answer, I talked him into a) going to our pool and checking, b) fixing the problem, c) helping us with other pool problems. Here's the kick in the pants. Because I didn't have much of an option, I agreed to pay them regular price. I asked if maybe they would give us a discount based on our friendship and potential volume and they partially agreed. I also worked it so that my partner, Mr. Fixit, could be on site as they fixed things watching and learning for future repairs. Here's the gist of it, after our second summer, we had made even more money as we had taken on another two pools. But, in looking at our costs, I saw that we had paid this other pool company as much as we pocketed!! That's right, that isn't a misprint. Because my partner couldn't fix much (there were other problems that were hidden which I will get into), we paid this company what we paid ourselves. Again, I'm not a genius, nor did I or do I have a degree in business, but I knew that if I could find someone who we could pay, to make these repairs for us as one of our employees, buy wholesale parts and sell as retail, we could greatly increase our profit and reduce our out of pocket expenses. I knew this going in, but not having a business degree, I concentrated on one thing at a time. I had been concentrating on customer service, having money left over after all expenses were paid, securing more contracts/pools, expecting my partner to fix more  big ticket items, and taking necessary steps to keep our momentum heading in the right direction. Here's what always amazed me, not how much money we had left on the table, no, not me, I'm an idiot. I was amazed at how we could basically pay other small businesses to do our work, add just a little for our time and expenses and still make a profit. Oh, and here's just a bit more incite from an idiot. I was charging less than every other similar company, so I had to realize my worth, take a chance and increase my fees to, less than the market, but significantly more than I had been. Best part, the communities were so happy with our service they didn't even notice and, we were still the most economical pool/handyman service available!

Monday, February 3, 2014

"From Classroom to Pump Room" Part 4: Find a need and fill it.

I hadn’t forgotten my entrepreneurial desires, but I put them off as probably not going to happen to me. Here’s where my fortunes changed.

Find a need and fill it!

I was coaching high school basketball to make extra money and became very good friends with the head coach. He too had kids and lived in a community that had a pool. He would invite us to spend the day with his family at their community pool. It was free, the kids loved the pool and we enjoyed the beer and conversation.

One day, as we sat around the pool, a scruffy looking young man showed up, walked around the pool, tested the water with his handy kit, and left. My friend, who also happened to be a board member for the homeowner’s association there turned to me and said, “That’s the pool guy, every summer we try a new pool company, and every summer this is what we get. He is supposed to clean and service the pool daily, not walk in and walk out.”  I remember turning to him and saying something like, “Just how much do you pay these guys?” When he told me, my next response was, “You know, we do have the summers off and Colorado is seasonal in that pools are only open during the summer.”  Anyway, we kicked it around and did some research. We found that we would need to take a course to become Certified Pool Operators. After a number of poolside meetings as the kids swam, we decided to find where, when and how to take this course. It wasn’t expensive, I really don’t remember how much, but it couldn’t have been more than a couple hundred dollars because I wouldn’t have been able to afford it if it was more than that.

We took the course, and while I don’t mean to be disparaging, we were the two most educated people in the class. The rest of our classmates looked exactly like the young man who “walked in and walked out” the day our business venture began. We passed the class and became Certified Pool Operators. My partner, who I will call, Jerry, because I don’t want to use his real name, for reasons I will detail shortly,  then realized we needed to find a community or two willing to take a chance on these new pool guys. Jerry, being a board member, knew the management company who managed his community. Admittedly, we were lucky, not only did he know the owner of the management company; this owner lived in the same community. Also, as more luck would have it, I had actually taught both of his kids and fortunately they loved me.

We set a meeting with him and explained that we were going to try the pool business. We explained what we saw, what Jerry and he knew from their experience, and that we wanted to know if he would take a chance on us. Our logic was pretty simple, “…really, can we do any worse than what is out there?”  And, we told him we would be servicing the pools ourselves in order to learn first hand and under fire. Our big plan was to then hire a couple of our basketball players, who we knew were reliable and smart to become “pool boys” as we supervised them. To our surprise, and I say this because we didn’t know exactly what his response would be, he said, “Go for it. I’ll give you a couple pools and we will see what happens. I know both of you and trust that, if nothing else, at least if you fail, it won’t be because you didn’t give it an honest effort.”

So we walked out of his office and were high fiving each other in the parking lot when it occurred to us we needed a business name, and probably should become a legitimate business for legal reasons. Our plan was that Jerry would be the head of the daily service, repairs, etc. because he was a very handy type, while me….umm…not so much. My contribution would be the business end. I would get the legal forms, the sales license, do the billing, etc.  It was a lot more work than I ever imagined. Not so much hard, just very laborious because I didn’t have a clue what I was doing. And dealing with government receptionists proved very frustrating. I talked to my brother-in-law, the accountant, and he suggested we become a Type S corporation.
So far I'm very happy that I decided to go as an S Corporation. I do know that LLC is essentially the same. Roughly, these types of entities guard you  should something happen and you get sued. If you should lose the lawsuit the complainant could only take whatever assets you have in the corporation. Fortunately, I have never been sued or even brought to court. I think 12 years of Catholic school has made me very serious about running an ethical business!
Anyway, we set out and began as M & T Pool & Handyman Services, Inc.