What valuable lessons have you learned since the economic downturn began?
Charlie Claffey
Claffey Pools
Southlake, Texas
The smartest decision that we made, without a doubt, was to retain our employees. With the culture of our company, it takes a long time to get anyone — even people within the industry — trained our way. So the cost of re-training far outweighs the cost of retention. It’s not even close. This wasn’t just an economic decision though; it was an emotional one. These people have been with us a long time, and they gave it their all with us. We had to give it our all with them.
Art Allen
A&G Concrete Pools
Fort Pierce, Fla.
I’ve been through recessions before, but I learned a little bit more because my company was much larger this time. It was harder to put the brakes on, to go from 130 people to 38. I kept hoping that we’d get better, so I held on to people quite a bit longer than I should have. Looking back, I realize that was one of the biggest mistakes I made. I needed to cut my overhead quick.
Michael Giovanone
Concord Pools & Spas
Latham, N.Y.
When times are good, you can become very complacent and not concentrate on each and every expense, each and every store staffing. Now you start to monitor your income not by the day but by the hour. It makes you take a very hard look at all the smaller issues.
Dale Overson
Barrington Pools Inc.
Barrington, Ill.
We should’ve listened more when people were [talking about recession]; should’ve been quicker in selling off trucks we didn’t need; and we probably should’ve cut wages quicker. And we should’ve made sure we didn’t have too big an inventory.
John Tortorella
J. Tortorella Custom Gunite Pools
Southampton, N.Y.
It’s hard in this industry to reinvent the wheel at a much cheaper price. We took it for granted that there might be, say, a different pump that cost less than a higher-end one. The problem is, how do you change it if your brand is built on having top-of-the-line everything, and suddenly you have to offer a lesser product? That is one of the things that we’re struggling with. We keep going ’round and ’round, but we haven’t found a solution. It’s a lesson we are still learning.
Jeff Ciarrochi
Armond Aquatech Pools
Bridgeport, Pa.
Branching out. Everybody’s feeding out of the same trough now and trying to service a smaller customer base. We’re very happy to have a service department now because it’s really carrying a lot of the burden of overhead costs. Even though it’s a pain in the neck to be making $60 service calls instead of building $60,000 pools, it’s still a good revenue stream.
Steve Ast
Shasta Industries
Phoenix
I think the most important lesson that I’ve come away with is stick close to the business principles that you’ve grown up with in good times. And when you’re in a recession, instead of having a two-, three- or five-year plan, have a three-, four-, five- and six-month plan. Then you’re following up almost on a monthly basis.
Tim Murphy
Presidential Pools & Spas
Gilbert, Ariz.
The No. 1 lesson I’ve learned is always watch your expenses and costs. Watch your debt in your company. In a downturn, you can’t shut off your debt and expenses. The best thing I ever did was purchase our trucks with cash. Our business philosophies will be to minimize our expenses and keep our debt at a very low minimum. If we can’t afford to pay for it, I don’t want to finance it.
Characterize this year in terms of how it’s affecting the pool and spa industry.
Debra Smith
Pulliam Pools
Fort Worth, Texas
I believe the economy has had a [big impact] because the lenders are not willing to lend as freely as before. The “want” and the “desire” for pools is out there, but people can’t get financing unless they have lots of equity, and the appraisals are affecting [home values] negatively.
Cecil Fraser
Swan Pools
Lake Forest, Calif.
In the old days, if you were bad, they keel-hauled you. That’s when a person is pulled down through the water on one side of a ship, under the keel, and up on the other side. It was awful going down, better when you were under the keel, but if you couldn’t hold your breath until you got to the surface, you couldn’t make it. We [the industry] are over the worst part and coming back up. It’s a question of staying power.
Dale Overson
Barrington Pools Inc.
Barrington, Ill.
It’s actually gotten better for us. Houses are starting to sell in this region. We’ve gotten orders for indoor pools with new houses. We’re down around 9.5 percent, but construction is down 28 percent. We’re putting in 70- to 90-hour work weeks.
Michael Shammas
Aegean Pools Inc.
Chesapeake, Va.
The number of pool companies out there doubled or tripled in the mid-2000s. So now these companies are trying to survive, and they’re just bringing prices way down. They inevitably go away, but they hurt the whole market on their way out.
Tim Murphy
Presidential Pools & Spas
Gilbert, Ariz.
I think it’s a slightly uptick year, 10- to 15 percent, with consumers being more cautious in their spending, and looking at competitive bids.
Jeff Ciarrochi
Armond Aquatech Pools
Bridgeport, Pa.
There are a lot of people who have dropped out this year, and those who got laid off are now competitors. For years, we’d been enjoying good profit margins and the ability to price things right, but now that’s all out the window. The pricing structure is terrible, margins are off, people are giving things away just to stay afloat, and a lot of people are trying to diversify. But hopefully we’re starting to turn the corner, or at least finally hit the bottom.
G. Bruce Dunn
Mission Pools Inc.
Escondido, Calif.
This is probably a year that has forced most people who are in business to work diligently to learn how to cope with the current conditions. It’s much more difficult going backward than it is going forward. Going backward doesn’t have the same speed as going forward. Going forward, you go out and you hire somebody, you get a truck, and you’re set to rock and roll. When you’re going backward, you’ve still got the truck, but it’s not doing anything other than costing you money. So I would say that this has been a year of substantial adjustment for the industry.
Brett MacNally
Performance Pool & Spa
Woodbury, Minn.
Crushing. Staggering. Monumentally tragic. I think this year is like nothing we’ve ever seen. Everyone I know in the industry was down 40- to 70 percent. This market has gotten absolutely hammered, and people really didn’t know what to do. None of us have ever gone through this, at least no one I’ve met.
Ron Robertson
Robertson Pools Inc.
Coppell, Texas
It made the homeowner much more in charge. Where we used to have two or three competitors, we’re now dealing with four, five or six. They’re getting more business because they know they can get better prices. I’m not getting the margins I need because the prices are just driven into the ground. I’m seeing a lot of low-ballers
What kind of recession will this prove to be?
Cecil Fraser
Swan Pools
Lake Forest, Calif.
I think it will look like a Nike swoosh: The economy will go down quickly, then slowly get better. But until houses have a known value, things can’t get better. Bankers don’t know what homes are worth [in times like this]. Some banks are loaning to people based on ability to pay. They ask, “Do you have a job? A FICO score of 740? Then we’ll loan you $25,000.” And they do the same for the spouse, so that’s $50,000 for a couple. That says to me that the recovery will be much slower.
Michael Shammas
Aegean Pools Inc.
Chesapeake, Va.
I think it’s going to be an elongated U-shaped recession. If this year is any better than last year, it’s going to be very minimal. I just don’t see anything out there that’s changing yet. Financing is still tight, home prices are still down and going lower, and our government is still playing the same violin.
Jeff Ciarrochi
Armond Aquatech Pools
Bridgeport, Pa.
The customer base that we deal with is quite wealthy, but even they got roughed up, though they’re not hurting as badly as some. I don’t necessarily know that we’re on a U-shaped recovery. I do think that people are starting to commit to some of these projects. I just hope we’re here next year talking to you.
Brett MacNally
Performance Pool & Spa
Woodbury, Minn.
I see the recession holding on very slow and steady. We’re going to be a long time recovering. I don’t necessarily see it getting any worse, though, and I’m sick of the media’s terrible attitude about everything. People are so scared, even people who have money. That makes me see it as a long, slow turnaround.
Ron Robertson
Robertson Pools Inc.
Coppell, Texas
I don’t think it’s going to go down, but I don’t think it’s going to be a really quick U-turn either. It’s going to be a slow, gradual climb. I think people have adjusted to the “new normal.”
Mike Church
Cody Pools
Austin, Texas
I believe we are experiencing a U-shaped recession. While we seemed to have hit bottom quickly, I do not foresee a speedy recovery. There are so many factors that contributed to the decline and it would be unreasonable to assume they would all recover simultaneously.
Art Allen
A&G Concrete Pools Inc.
Fort Pierce, Fla.
I do not think it’s going to be a double dip. I think we’re going to slowly start moving out of it. I’m not an analyst. I can only go by Florida and what I’m seeing. I remember from the recessions of the 1980s and 1990s, and I think we’ll see the same situation — prices go lower, people pick up on it and start buying.
Steve Ast
Shasta Industries
Phoenix
I’m not an economist, but for right now, I see this as an elongated U recession, unless the federal government does something drastic. I think we’ve probably got one or 1 ½ more years of this, and by the time 2012 rolls around, you’re really going to start seeing some pent-up demand come out of the marketplace.
Tim Murphy
Presidential Pools & Spas
Gilbert, Ariz.
I don’t think it’s going to be a double dip, and I don’t think it’s going to be a U or V shape. I don’t think there’s a letter for this recession. I think five years from today we will be at about 75 percent of the height. And I don’t expect us to be at that height again for a long time.
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