It's Time To Recession-Proof Your Business

We hate to be the one to say it, but the time has come to make some changes and recessionproof your pool business. We’ve been riding a wave that’s been an incredible boom for the industry. People have stayed home during the quarantine, and the money they would have spent on vacations has become disposable income that they’ve used to reinvest into the home. Home improvements are up in general during the pandemic and the end result has been nothing short of unprecedented in terms of growth for the pool industry.

Over 94,000 pools were installed during 2020, up 21% from the previous year in 2019. The numbers aren’t in just yet for last year but as the dust still settles from 2021, the entire pool industry has boomed.

This year, the complexion and outlook does not appear to be a repeat of the previous two years in terms of demand. Right now we’re looking at high inflation. Increases in fuel costs are soaring through the roof. We’re on the brink of a recession.

Some folks had disposable income and used that towards home improvement. Others took out loans and mortgages. Many feel the inevitable crash is coming, and for those who are unprepared the change in the economy will hurt, perhaps irreparably.

There are a few things that pool professionals need to consider in order to recession-proof their business. I think one may be coming within the next year. Hopefully, that doesn’t happen. Hopefully, you never need to use any of this advice in this article.

However, there is absolutely nothing wrong with putting yourself in a good position to handle a recession, and it looks like one may be on the horizon.

There are different things you can do to arrange things so that you’re in a better position financially if a recession happens in our country. This may mean raising prices with customers, but you need to make certain you’re in the best position possible to survive tough times should they occur.

One great idea to recession-proof your pool business is to start billing separately for chemicals. With more price increases on chemicals looming in the near future, it simply makes sense to begin to start passing these costs on to the consumer.

Now is the time to explain the prevailing market conditions to the consumer and perhaps change your business practice for billing customers. In our roundtable discussion last year, we discussed rising prices. Not much has changed in the last 6 months except perhaps consumer confidence. Instead of continuing to raise prices for service, what makes more sense in this climate is to separate chemical usage as an itemized bill.

Another aspect of billing that should change during this climate is charging for service after it’s been rendered. Many pool companies have their act together in this regard and are doing the right thing by billing for services ahead of time, however, there are still many professionals who do not.

Billing after the fact is tantamount to supplying customers with a credit line on every job you do. This is a surefire way to fall behind during a recession. As customers begin to become cash strapped during this economy, one of the first bills they’re liable to ignore is yours! Pool service professionals run the distinct possibility of becoming low priority when it comes time to pay bills, especially when the service has already been rendered.

One question pool professionals who bill at the end of the month is, how do they switch? How do you switch to billing at the beginning of the month without double billing? People by nature are resistant to change, they also don’t like paying in advance. So the question remains, how do you switch the way you’ve been billing without upsetting all of your customers?

The answer is – incrementally. Make the change slowly and begin retraining your customers to expect a bill earlier than they have. There’s not a recession today, there probably won’t be one this summer; but if what industry experts are predicting is true, one is coming soon and the time to adapt is now!

This month coming up, instead of billing on the 30th for the service you’ve performed all month, start billing on the 3rd week. Then the next month, bill your customers on the second week. By the end of the summer, you should be caught up and now be billing all of your customers for the month of service ahead.

Heather Linton also spoke on another episode of “Talking Pools” about building credit for your pool company. While pool professionals may be cash-rich right now, the time to start building your credit is now. Simply put, people need money when a recession hits. If you have not been building your business credit, do not wait until a recession hits. During a down economy is when consumers make the biggest run on banks. It’s also when credit is hardest to come by.

At the end of the day, when considering ways to recession-proof your business, it’s important to put together a game plan that allows you the flexibility to maneuver in tough environments. Some of these suggestions may seem hard to implement, but are entirely necessary in order to ensure you remain solvent in a down economy.

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