Looking at what the future holds for the service sector
After almost two years of utter COVID chaos in the world, it’s time to look beyond the pandemic toward the future for the pool service industry.
“Pool service is pretty resilient, no matter the conditions,” says David Hawes, president and CEO of H&H Pools in Dublin, California. Growth, he adds, is inevitable over the next several years, both for his business and the industry as a whole.
The demand for a better backyard experience is real and long-lasting, says Stewart Vernon, founder and COO of America’s Swimming Pool Company, a national pool service franchise headquartered in Columbia, Maryland. “Old pools do not die, they get renovated; new pools are being installed every day and need service,” he adds. “Customers value their backyard now more than ever. Pool service has been elevated to another level by this demand created by the pandemic, and the impact will be felt for many years, if not forever.”
The future of the industry includes new and exciting things, says Hal Denbar, founding partner and regional president of Texas for National Pool Partners, and founder and former owner of Patriot Pool & Spa in Austin. “This has been such a chaotic year,” he adds, “and chaos breeds innovation. When everybody’s in scramble mode, new stuff happens.”
Specifically, Denbar says he’s been impressed with technology that shapes how pool service companies do business, such as CRMs and other business management programs. “It’s amazing watching the tidal wave of software and how much better it’s getting.”
Other innovations can be attributed to the technological advancements with pool parts and automation. Hawes says these innovations are happening at a record pace with new products coming to market frequently. Hawes is looking at these new products and believes H&H Pools will inevitably move to remote monitoring of pools in the future.
Michael Polak, owner of Catalina Pools AZ in Gilbert, Arizona, adamantly believes that technology within the industry is going to make or break pool service companies in the future.
“We’re seeing guys who have been in the industry for 20 or more years fading out because technology is surpassing them and their understanding of how to do it,” Polak says. “A lot of millennials are entering the industry and can learn quicker and faster with the technology than some guys who’ve been around for 30 or 40 years.”
Newcomers will have a better understanding of automation and can do all the programming, Polak adds. “It’s going to be a niche group of people who will be continuously busy and subcontracted by other pool companies that don’t understand that part of the business,” he says.
Polak is one such person; two pool companies subcontract with him to do automation. He’s hired an engineer for Catalina Pools whose sole focus will be all things automation.
Sean Ruble, owner of Jester Pools in the greater Chicago area, says he’s also interested in remote monitoring of pools. “It certainly makes it much easier and speeds up the process of getting to these [pool service] calls,” he says. “With the alerts being accessible 24/7, and the access being much more attainable and vast in choices — such as a phone, laptop, etc. — this will make the process very smooth.”
Vernon is not so sure, saying nothing will ever replace a trained eye. He says he’s seen no evidence of remote monitoring growing exponentially, but Michael Wagner, president of Virginia-based national pool service franchise company Pool Scouts, says his company has tested a few of the devices.
“Most of what is out there is intermediary technology,” Wagner says. “Until everything is built into the control panel, I don’t think remote monitoring will be substantial.”
For the pool service industry to grow, many believe an industry-wide effort to raise prices, improve professionalism and create sustainable businesses will attract a second-generation, or outside investors, to buy existing pool service companies.
There are pool companies all over the nation that are extremely successful, but with no end game or succession plan. “All those wise industry veterans who’ve built multi-million-dollar businesses are still running them, whether they want to be or not,” Denbar says. “And then their kids will get them whether they want it or not. Up until now, there has not been a market to exit if you build a business that’s substantial.”
“There has been no gold parachute,” Denbar adds. “There has been nobody saying ‘Here, let me pay you millions for your multi-million-dollar business’ in the past. We are so excited to present that option to our industry now.”
That option, to whom Denbar sold his business, is National Pool Partners — a pool service company consolidation organization launched in January of this year — where he remains as a founding partner. NPP buys existing pool service companies, giving them systems, scale, career paths and buying power to market and grow. Unlike a franchise model, NPP owns the businesses and employees have career opportunities within the whole of NPP’s organization, not just the pool service company where they start.
“For me it’s always been about creating jobs and opportunity for people; that’s what really gets me excited,” Denbar says of joining NPP. “[With NPP] I’m seeing concretely, on paper, a way to do that at a scale there is no way I could do individually and it’s never existed before.”
Franchising may be another option for getting existing businesses ready for the original owners to exit, but also for new owners to enter the industry and launch their own small business.
As of May this year, Wagner says the Pool Scouts franchise has seen an 80% growth over 2020. The company has 31 franchisees in 80 territories in nine states; 17 of those territories were awarded to six new franchisees in the first quarter of this year alone.
“Franchising affords those wanting to go into business for themselves the opportunity to operate with solid business models, support, vendors and training, which reduce the risk of failure for new businesses,” Wagner says. “This is true across all industries and certainly for the pool service business.”
While Hawes has not yet found a franchise that checks all of his boxes, he says they offer opportunities for companies to defer certain business functions to a centralized organization, freeing up owners to do retail or service. “A lot of service industry members look for ways to group advertising and management expenses,” Hawes says. “Franchising provides a great alternative to doing everything yourself.”
Polak looked at franchising but says it’s not a fit for him so far. The organizations he’s considered only provide cleaning service, and franchisees must refer homeowners to other pool companies for repairs. “The real money in the pool business is not just in the service side, but in repairs,” he says. “When you’re limiting your scope of work, you’re limiting how much money you can make.” Like Polak, Denbar found franchising wasn’t right for him when running Patriot Pool & Spa; he didn’t like the business not fully being his own.
However, Denbar suspects that side of the industry will continue to grow. “Again, when there’s chaos, people want to go out on their own for the first time,” he says, “and I think to some people the franchise model might be attractive because they see less chaos when they’re given a playbook on how to do things.”
Denbar adds that, to him, consolidation through companies like NPP is the direction the pool service industry is going. In the years prior, he recalls possibly two semi-serious, out-of-the-blue calls from investors or private equity firms looking to purchase his business. But just a few months after the pandemic started, it became clear that the pool service industry was on investors’ radar — he was getting about 10 legitimate inquires a week.
“The pest control industry went through the exact same thing 30-ish years ago — it was a fragmented industry,” Denbar says, comparing it to the current state of pool service across the nation. “It lacked professionalism, some modern infrastructure, higher wages, benefits, career paths, training — things that other industries started to have at that point. It’s crazy that the pool industry seems like it’s still in that condition.”
Pay and Training
While there is a lot for the pool service industry to look forward to, industry veterans say finding laborers who are adequately trained or willing to train will remain challenging over the next few years. “The industry is growing, but the workforce that is specialized in this field is not necessarily growing accordingly,” Wagner says.
It has never been easy to find quality candidates, Hawes says. “Looking at the next few years, if we don’t find a way to encourage younger people to view the pool service industry as a career instead of a job, we will not be able to engage them to join our ranks,” he says. “We need to be offering a career with a well mapped-out future for them.”
Wagner says another problem is training is not prioritized, or even required, universally across the industry. California, Florida and Texas have some unique requirements for repair work, he says, but there aren’t consistent standards across the country. Polak wants to see local and state municipalities step up, too. “The guy that works on your air conditioner, he’s got to be licensed,” he says, “but there is zero municipal oversight for the pool guy. I’ve seen guys install gas lines that can kill people — who have no business doing any of that stuff — but nobody does anything about it.”
Rick Woemmel, president of Bi-State Pool & Spa in O’Fallon, Missouri, says there should be universal adoption of the International Swimming Pool & Spa Code (ISPSC), but that fewer than half of U.S. states have done so. Once that happens, he would like to see certifications for individual pool techs required as well. “Baby steps must be taken,” Woemmel says. Right now, he sees customers prioritizing a pool company that can start tomorrow, not a properly trained and certified pool company. Change begins when those things become requirements for the whole industry, which will also create a career path for prospective workers, pool pros say.
Many industries are also keeping an eye on possible federal minimum wage increases, but Polak says this may not affect the pool industry: Many in the business are independent contractors paid by the job or by the pool, he says, and aren’t necessarily paid minimum wage.
Woemmel says no pool companies he knows of are paying minimum wage. “As long as there is demand for pools, minimum wage will have little to no impact,” he adds. “Raising the minimum wage will increase the price of fast food and minimally skilled projects. Swimming pool workers will remain above-minimum-wage employees.”
Raising the Bar
Across the board, pool pros are hopeful the industry will increasingly be looked upon as a modern entity that stays with the times, which sources say starts with prioritizing training and career paths for employees.
“Far too often, our industry is seen as ‘mom and pop’ or outdated and fragmented, much like the HVAC industry was 20 years ago,” Vernon says. “This is slowly changing, and I would like to see this continue to improve.”
Hawes says consumers will recognize the significance of the certification and training that makes a pool company service better. “We need to do a better job of promoting that to clients to help foster the kind of professional image we want to have,” he adds.
Hawes and other California industry experts started the Pool & Spa Apprenticeship and Training Committee this year, which he says will be producing state-certified journeymen service and maintenance specialists to raise the bar for the industry (read more here).
Raising the standard of professionalism appeals to Wagner as well, who says Pool Scouts’ business model is attractive because of elevated branding, reliable technicians and improved customer service. “This benefits the customer and the industry as a whole,” he says. “It also raises prices and gets rid of the bottom-chasing mentality.”
Denbar supports the goal of consolidation to raise the perception of the industry. He says he’s confident it will be a net positive, regardless of whether everyone is on board with consolidation efforts. “Wages and benefits will rise, career opportunities will rise, training will rise,” he says. “As we present a more professional, modern front to the consumer, prices should theoretically go up. If prices go up because consolidators are raising prices, independent [pool companies] can raise prices as well. Creating a better product can only help all those who are in the industry.” Hawes is proud that the industry is also working toward bolstering interest in the younger generations and is optimistic it will only get better. “The pool service industry is a great family to be a part of,” he says, “and I hope, as time moves on, we can enjoy what we do, enjoy those we serve and continue to improve our business acumen so we can achieve our goals.”