"Solutions to Generating Revenue During the Offseason"
By Simon Cope
An ongoing challenge for many spa and pool dealers is the drop off in business during the winter months. This is a particularly difficult issue for pool builders who employ valuable skilled workers that are at risk of moving to other jobs to enjoy a more consistent and predictable income.
This makes the "winter months challenge" even more difficult because not only do pool builders experience a loss in revenue, but they also risk loosing skilled workers who are the backbone of their pool construction business. Many of the pool builders I speak with tell me that they're frustrated with their inability to grow their business, simply because they don't have enough skilled labour and the thought of losing their employees during the winter months troubles them.
Does that scenario sound familiar?
It did for Charles Lindsey, owner of Lindsey's Spa and Pool in Arkansas, USA. Lindsey comments, "During the winter months we would experience a drop in sales and so to hold on to our good people we started building storage sheds. Although the slowdown in revenue was a concern, we started the building business more to be able to protect our talented employees from finding other work."
In the beginning he used his pool construction employees who had some carpentry experience to start building storage sheds, which he sold and offered on a rent-to-own basis. His business picked up and he expanded his services to building shops, barns, and modular office spaces, in addition to applying vinyl siding and custom paint jobs.
Lindsey has now turned the part-time building business into a full time company producing revenues that help to offset the decline in winter pool construction business. In the wintertime, there is still a small demand for pool services, so cross-trained employees are shared between the building business and the pool business allowing Lindsey Spas and Pools to not only maintain their revenues but also keep their talented employees.
Four Steps To Consider When Starting A Second Business
Starting a second line of business can be tricky. Running one business is tough enough but opening a second business can present a new set of conflicting priorities and strategies. The advantage you have is that you've been there before. You are already familiar with many of the challenges that come with starting a new business. Many of the issues you'll face while opening the new business, will be the same issues you've already tackled.
Perhaps the biggest decision in starting a second line of business is what type of business to start. Consider these steps when thinking about your new line of business.
Step 1 - Identify the expertise that you already have in your spa and pool business. Either you or your key employees may have previous experience in other lines of business. Charles Lindsey noticed that he and his employees had extensive skills in the construction industry, which provided a foundation for his building business.
Step 2 – Survey your current spa and pool customers to determine what needs they may have that you can offer during the off season months. Look around their homes and make a list of potential services you might be able to provide using your skills.
For instance, home improvement services, fence and gate construction services, heating system maintenance services, general contracting services, plumbing services, snow removal services, and landscaping are all services that share the same skills that pool builders have. These services would be likely candidates to leverage into a side business that would help offset the loss in revenue during the winter months.
Don't forget to look past the obvious for additional possible products or services you might be able to offer. Try thinking about potential services that you could leverage at your facilities such as indoor swimming lessons, lifeguard and CPR training, scuba diving lessons, and even kayaking and canoeing lessons.
Step 3 – Create a plan for your new business that includes the four critical areas of financing, people, product, and marketing. These are the four cornerstones of any good business plan. They include the vital four questions you must ask yourself when starting any business, whether it's a side business or your main business.
These questions are:
1. How will we finance the business?
2. How will I hire, maintain, and manage qualified employees?
3. What will my product or service look like and how will it be different?
4. How will I market my new product or service?
Your business plan is a good place to test your assumptions. For instance, assume you are thinking of starting a heating system maintenance service because you believe that the skills you've acquired working on pool and spa heating systems will transfer easily to home heating systems.
During the business planning phase is when you would investigate and learn more about the requirements to become home heating maintenance certified and if, in fact, those skills do transfer easily. You may find out that they are two different animals and that the barrier to entry is too high.
Step 4 – Start marketing your services early in the season to your current spa and pool customers. What better group of people to market your new products and services to than to those whom you already have a business relationship with and who know and trust you.
Review your customer database and pull out all your customers with whom you have done multiple transactions. These are the customers that have demonstrated their loyalty to you and your business and are the most likely people to buy from you again.
Donald Johnson, owner of Tri-State Window and Pool in Iowa, USA provides a number of home improvement services, in addition to, selling spas and installing pools such as installing replacement windows, seamless gutters, home siding, roofing and also general home repair.
According to Johnson, "The key to running a successful diversified business is to make sure that your employees are cross-trained and versatile in performing your different services." When scheduling jobs try to match your untrained employees with experienced crew members in order to get your employees up to speed in each of the service areas you offer.
Speaking of scheduling, Johnson adds, "Scheduling is an important issue both for your employees and your customers. Your crew members need to be flexible. One day they might be installing storm windows and doors and the next day they might be called upon to install an inground pool. To be honest, our employees find the diversity in jobs refreshing. Also you need to learn to be very diplomatic with your customers when scheduling jobs. Because you can't start every job immediately, you'll need to persuade your customers to work with you when scheduling the job to be completed."
Marketing your additional lines of service is also a vital step in building a successful diversified spa and pool business. Many spa and pool dealers who sell multiple services send a "We do it all" message and attempt to market all their services in one advertisement. This is confusing to the customer. Today, when consumers buy services they want specialists or businesses that have specific expertise in doing that one thing.
When advertising your new line of products and services, confine your advertisement to just one product or service. Although this may cost more, your ad will be far more effective. Once your prospect comes to your store, you'll have an opportunity to cross-sell them on other products and services you provide.
Beginning a second line of business to offset the winter month's slowdown is a smart move. Not only does it offset lagging income from slow months, but it allows you to maintain key employees and diversify your business income. By matching the skills and talents of your business to your customers' needs or wants, you'll be able to find the right product or service to pursue.
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