Note to all readers

15 years ago

After posting a few minutes ago about a poor pool build experience I thought I'd take a moment to enlighten potential pool buyers.

Right now my industry (pool construction) is in a tailspin. This has made it difficult on all companies in the game. Our margins have degraded bigtime.

Now, more than ever, is the time to really place your potential builder under the magnifying glass before signing a binding contract.

In the past few months I've finished a half dozen pools and have at least 7 more quotations behind bankrupt pool builders who low balled the projects and left the buyers high and dry.

My most recent quote was for a buyer who has paid 90% for 50 percent of the work. He's paid 60k on a 65800 contract and has no equipment, decks, plaster, and the plumber and electricians labor charges. The builder set decking forms, but didn't pour concrete to collect his deck draw.

He told the buyer that he's out of funds and can't complete the job until he gets some new work. Buyers don't want to sign with him because they know he has several uncompleted pools. They started this pool in August of '08. My heart truly breaks for the pool buyer but I can't let it affect my quotation for the finish up. In an effort to purchase a more affordable pool he opted not to sign with the better companies in my area who were 5 to 10k more for the new pool. My bid was over 33k to finish and this was based on a 3% lower markup on my services than I currently strive to achieve. The pool that should have been in the low 70's will now be 90+.

He's not alone, almost all of my finish ups have been exactly like this one.

Take your time, check out your potential builder, ask to see and meet some current and recently finished pool buyers, and if he'll give it up ask for numbers of some of his industry references.

I feel partially responsible for some of these buyers. Had I given them the numbers to my wholesalers, guniter, PebbleTec'r etc.. to call and ask about the standing of my company -VS- another company, the ones I quoted might not have signed for the lesser sales price if they thought they were at risk of signing with a near bankrupt company.

These men in the industry will get the work regardless of who they sign with and will gladly tell you if they have favoritism of one over the other. The favoritism is based on amount of work and prompt payments on invoices.

When one man has a 100k credit line and another is on C.O.D. it's because they both earned it, one by paying the invoices and the other by dodging the invoices.

Right now, in my area, the weak builders are quoting cost plus 10. I'm currently quoting cost plus 20 which is 10% less than I've quoted all my life. I won't go to a meet comp of cost plus 10 but have recently signed a few at cost plus 17 or 18. These are poor margins for any company large or small, but they are margins that you can stay afloat on.

Bear in mind that all pool builders are in the same game as any business owner, that is the cost plus markup equals sales price game.

I'm hoping that the potential buyers will still move forward and buy the pools they want. I have many contracts from several months ago that I was asked to wait on until they saw what the economy was going to do. Although they were past the 3 day rescission period and could have been held to the deal, we had no commencement on the job except for getting the building permit. I asked to be reimbursed for the permit and would wait with them.

See ya,

Kelly

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Comments (18)

topfiftybuilder
15 years ago
last modified: 9 years ago
Kelly
What area of the country are you in?
poolguynj
15 years ago
last modified: 9 years ago
This is happening coast to coast. Without profit, there is no product, there is no service to depend on.

Its time to put a stop to the vicious cycle down. Doing due diligence will catch the BS-ers but don't expect the better companies to cut things too tightly or they can't continue to be the better companies you want and need.
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Mark. If there is one thing that annoys me more than anything else in this trade, it's the never ending line of people who tell the customers want they want to hear whether its accurate or not. Reminds me of the service manager that told one old lady that the fog that she kept finding on the inside of her car windows was a small coolant leak and we simply had to tighten a hose clamp, instead of telling her that as the vinyl interior cures it will give off chemicals that can fog the glass and it will go away completely by the end of the summer all by itself. I think I saw that car in to get the windows cleaned every week all summer long. What the service manager did was tell her what she wanted to hear, that something got fixed. You wrote "I just fixed an intermittent electrical issue for customer that spent a small fortune with 3 different garages that failed to fix the problem. " It takes four things to be able to fix a car. The right person, the right tools, sufficient training, and a broken car. Intermittent by nature are a car that isn't broken all of the time. If it happens to not be broken at the time that any of the other three shops saw the car, then they had no chance. Now keeping in mind what I started off with, people in this trade wanting to tell the customers what they want to hear, instead of the way it really is, you can go right ahead and fault the shops as you did, and play the hero card here. The facts are the forces at work inside of this industry that you allude to are going to hurt the consumer until we all learn how to be professional. Quote" The flat economy has effectively forced many employment/income/savings/credit challenged people to become self sufficient electrical/emissions troubleshooters and/or forced them to use the services of unemployed/under-employed mechanics that work from home, or on-site" Side work is stealing, pure and simple. Someone doing side work has no insurance, which a shop has to pay in order to protect the customer as well as themselves. They don't pay taxes which short changes everyone else that does. They operate in the street, or in a garage not zoned for the business, the list goes on and on. It's the classic apples to oranges kind of a comparison. You cannot compare what happens in someones back yard to what a real shop does today. Quote "Having a little knowledge also helps prevent customers from being taken advantage of by dealerships, independents, tire/brake/inspection outfits etc" Now where does one get this knowledge? In some back alley? Here on the Internet? You can find videos of people unlocking a door on the Internet with a tennis ball that has a hole cut in it. Its fake, but people want to believe it. Your response is IMO another tennis ball trick that unfortunately I don't have all day to debunk. Plus I have the disadvantage of having to tell it like it really is, not the sugar coated version that people want to hear as you did. Yes it costs money, and sometimes you might consider it "big bucks" for something that may seem relatively easy. Did you see Jerry's response just now? Quote " and the Security fault. My truck is a basic model, manual windows and locks, no electronic security. The dealer shop was successful in getting the SES Icon off, and in applying two "silent" recalls (not happy I didn't get a notice), but the Security fault did not result in any action... I'm concerned it is a computer problem, expensive to repair. The problem may be that the Security fault isn't on all the time, so if I had a reader I could look when it is on. The reality of that paragraph is first that Jerry contradicts himself in saying that the vehicle has a Security issue, but at one point says that its a base model with no electronic security. 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The reality is techs and shops need vehicle specific training, and specific O.E. tooling for each one of the manufacturers or else they are working with a handicap, and potentially will find themselves unable to actually complete a given repair without sending the car back to the dealer, or having a mobile diagnostic technician come to their shop, or in fact they could come to a shop like mine for about 90% of the most common vehicles on the road. I ask you Mark are you genuinely equipped and trained to service the security system on Jerrys Truck? Would you be for all of the other manufactures that the readers here are likely to own? By taking on that expense, uncommon in the industry, it impacts what a shop like mine has to charge for even the things that are indeed easy. You attempted to make that look as if it is dishonest with your response and I take extreme exception to that. 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grn_eyed_sal
15 years ago
last modified: 9 years ago
This tale sounds all to familiar to my situation. The big difference was that we pursued the top builders in our area (Baton Rouge) and never mentioned cost in our contacts, but we could not even get a return call. When we did finally get in contact with our prefferred builder (Russell Pools), he came out and showed us a bunch of pretty pictures and said he would be back with a proposal in ten days. A full month later, my wife called him and he said he did not have time for us and to find another builder.

We ended up calling a builder in Laffayette (Jerry's Pools) who refferred us to his son in Baton Rouge (Danny Thibodeaux). We visited a pool construction site and spoke with the homeowner,(who later told us he lied because he was afraid Danny would not finish his pool if he came clean),went through a brief design phase and signed a contract for $58000 for a 720 sf pool, 8 ft spa, heater, polaris, cartridge filter, Easytouch 8 with wireless remote, 800 sf of deck with cool deck, electric included.

Fast forward to the Friday before Christmas when the builder calls and tells us he is out of business and its been really nice working with us. We had a gunite shell with brick and tile and he had 80%.

We hired a sub crew to finish the pool itself, we procured our own equiptment, hired our own electrician and plumber. We are almost done (about 15K over budget). Our biggest problem is that we cannot get anyone who knows anything about the Easytouch system to tie the whole thing together. Again.....we haven't even gotten as far as the price before we get shut down on the phone with these people!!!!

Do any of the PB's on the forum have any suggestions?
Rack Etear
15 years ago
last modified: 9 years ago
About the Easytouch. Call Pentair and ask them if they can suggest someone in the area.

If you are electrically savvy or have an electrician It can be done relatively easily.
devildog1989
15 years ago
last modified: 9 years ago
Kelly,
I take offense to you lumping all C.O.D people in the same mold. I have never ran credit accounts. I learned that from a guy whose been doing this for thirty years. All my distrubutors, subs, and clients love me. They never have to wait to be paid and and they are not wondering in times like these weather I'm going to pay my $100,000.00 bill at the end of the month. If all distrubutors demanded C.O.D., They and homeowners would not be sweating bullets like they are now. I'm seeing companies that have been around 25 years tank. I live below my means and pay everyone promptly upon completion or delivery. I hope you relize every situation is unique.
grn_eyed_sal
15 years ago
last modified: 9 years ago
Racket

I am anything but electrically savvy (I know just enough to get me killed). The electrician just left and he hooked up the pumps just enough to circulate the water but would not go farther than that. we have no auxillary items working and no programability at this point
sceadu
15 years ago
last modified: 9 years ago
Devildog,

I don't believe he was calling you or anyone that pays C.O.D. by choice out. His statement simply expressed that some PB's have been forced by the subs to be C.O.D. because they refuse to pay their bills. You can only rob Peter to pay Paul so many times before Peter wants his money. Coampanies that do this are only prolonging the inevitable.
Rack Etear
15 years ago
last modified: 9 years ago
Sal if you can find a smart electrician I'd be happy to correspond with him on how to get the easy touch sorted out.
huskyridor
Original Author
15 years ago
last modified: 9 years ago
Devildog, there's a BIG difference in those who pay C.O.D. by choice and those who are there because the wholesaler, guniter, redimix company etc... placed them there due to the inability to make delinquent invoices good.
IMO, this is the biggest reason that they'll come out and TOTALLY lowball a project. The need for cash money becomes a complete necessity when you have no available credit.

quote" If all distributors demanded C.O.D., They and homeowners would not be sweating bullets like they are now. "quote
I disagree. My wholesaler (the largest in the world) and my guniter know which companies they can trust to have higher than the average companies balances. They and my buyers have confidence in my organization, I also have some really good competitors they trust too. We enjoy a very large portion of marketshare and don't drop our shorts for potential buyers when they give us lowball feedback from those other builders.
I could never make it on cash terms because of the volume of my business. In an average busy season week I'll dig, steel, gunite, plumb, wire, brick and tile, pour concrete, plaster, and cleanup 2 pools plus purchase 2 equipment sets at an average of $8000 each. This will be at typically 10 different jobsites. If I had to drop everything to run checks I wouldn't get any of my work done or I'd have to hire a fulltime man just to run by sites to drop off checks. There are a bunch of invoices at the end of every week that I have to make good.
I learned a long time ago that I'll never collect all the money at once and I'll never pay all my bills on the spot.
Thats why having good terms with my service providers and suppliers is very important.
My company pays these invoices and weekly payroll first, equipment and truck note second, shop note light/phone bill third, insurance fourth, and if there's any money left me fifth.
The truth of the matter is that I haven't paid myself my monthly salary for Nov. Dec. or Jan. yet due to cash flow -VS- incurred costs of conducting business when your only digging a few pools a month like I did in the last quarter of '08. I've hammered away at my savings account to pay all my household bills.
It's OK though because I just gunited 2 pools last week and have 3 to dig and gunite this week. It doesn't take but a few weeks of a workload like this to get you back in the game.

I'm sorry you misunderstood the intent of my statement.

See ya,
Kelly
devildog1989
15 years ago
last modified: 9 years ago
Kelly,
Sorry I miss understood you. I'm a smaller custom builder that has no reason to run credit accounts. I guess I'm a little sensitive when I hear things like that because I run into the bigger companies that bad mouth the small guy all the time about him being a car crash or heart attack away from being out of business. Hallmark in San Diego would always brag about how much credit they had and how they were better than the rest of us. Well look were they are now.
grn_eyed_sal
15 years ago
last modified: 9 years ago
racket - thanks. We were lucky to just get an electrician to come out to do the job. He was not interested in learning/doing more than hooking it up. It is just so frustrating to practically beg someone to come out. Here is money - just show up for the job.

On the economic side, I have my own business, and while La. is not as bad as some places, there is a noticable change in purchasing behavior at my customer's stores/restaurants. I'll keep supporting them like they support me, and keep on pushing through it.
natural_one
15 years ago
last modified: 9 years ago
Kelly,

Great post. My father and I just recently put together new client books to address many of those issues and bring the truth out. They are a rather extensive list of questions for pool buyers to ask every builder they interview and niclude many of the items you refer to and more. The book is a step by step guide to picking a part the pool builder. In the end, you're left with the best of the best, and can clearly see through a lowballer, scammer, and builder on the verge of closing.

Let me know if you'd like one mailed. Id love to get your feedback and improve it while helping out another honest builder...

Tyler
mikethepoolguy
15 years ago
last modified: 9 years ago
Call me a scavenger if you want, but every company that goes out of business or cuts corners at times like this only provides me more sales and makes me look better. Survival of the fitest. Unfortunate for the customer and the reputation of the industry as a whole though.
sceadu
15 years ago
last modified: 9 years ago
Kelly,

I would like to see what you have put together.
Rack Etear
15 years ago
last modified: 9 years ago
"Call me a scavenger if you want, but every company that goes out of business or cuts corners at times like this only provides me more sales and makes me look better. Survival of the fitest. Unfortunate for the customer and the reputation of the industry as a whole though. "

Well not always. I end up on many projects where the builder screwed up things royally and they ended up making a lot of profit while we are working for service wage to fix it.
stir_fryi SE Mich
15 years ago
last modified: 9 years ago
Maybe I am wrong but wouldn't this make buying fiberglass a safer choice right now?

Isn't there less subcontracting going on?

You have the national company (ie: San Juan, Viking) that may stand behind you.
Rack Etear
15 years ago
last modified: 9 years ago
"You have the national company (ie: San Juan, Viking) that may stand behind you." Which would refer you to your builder.

I would doubt that they would fly out from an abandoned market to help you.

It doesn't matter if your pool came on a truck or in a truck if your builder goes OOB you are gonna be in bad shape.
bella-orlando
15 years ago
last modified: 9 years ago
Kelly and Tyler,

I am with you guys. I am in Orlando and I am sickened by how much business I lost to these crooks that leave the customer stranded! I am a medium sized builder and have seen from the large to small builders go under. This economy is showing that it does not matter much how big or small, how established, the stability really rests on how financially sound the company is as well as their customer service history. I used to tell clients to check homeowner references, now its smarter to check trade references. The classic sign a builder is having trouble is an increasingly troubled Better Business Bureau record. ItÂs good that the economy is weeding these bad builders out. ItÂs too bad that homeowners have to get caught left hanging when the pool builder does not finish the job or pay the subcontractor.

Jason

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