January 12, 2022
The last five years has seen an overall increase in pool cleaning services business by roughly 8.1% between 2017 and 2022. As of 2022, there are an estimated 84,128 business in this industry which boomed by 8% in one year alone between 2021 and 2022. With a market size of an estimated $6 billion employing over 90,000 employees, it’s the perfect time to get a piece of the pie.
This article holds the information you’ll need to start a pool cleaning business which will turn a profit and allow you to join such a large industry.
Steps to start a pool cleaning business
1. Gather the necessary experience and education
2. Market research the area and potential clients
3. Estimate the costs associated with starting and running a profitable pool cleaning business
4. Register, license, and insure the business
5. Determine whether the area requires any certifications
6. Create projections to determine at what point the business will turn a profit
7. Secure potential investors or starting capital
8. Start the business
Startup costs for a pool cleaning business
Startup costs for a pool cleaning business can vary greatly, depending on the area, the clients, and how big you want to go immediately.
· Minimum startup cost of a pool cleaning business = $2,000
· Maximum startup cost of a pool cleaning business = $35,923
· Average startup cost of a pool cleaning business = $19,267
The majority of the startup costs will go toward some of the following business expenses:
· A vehicle or trailer to transport equipment if one isn’t already available
· Business Insurance and certifications
· Water-testing kits
· Pool-cleaning chemicals such as disinfectants and sanitizing products
· Skimmers and brushes
· Uniforms with company logo
· Service agreements with customers
How much revenue can a pool cleaning business generate?
The goal of any business is to generate revenue. Several factors come into play to determine the businesses potential for a high income such as the number of customers and the types of work requested. Whether your customers are private homes or commercial facilities will have just as much effect on earning potential as the weather; longer winter means less work.
Before we hop into revenue in greater detail, ProjectionHub does have a Pool Cleaning Template which you can use to calculate your revenue.
Price for pool cleaning services
The first step to finding out the business’ potential for a higher profit is pricing your pool cleaning services correctly. Most businesses make one mistake when they first start – charging too little for the service.
The hope is the price will beat out the competition and bring in more clients, therefore, more revenue. However, more often than not, this backfires since such low pricing cannot be sustained for a longer period of time. There are a few strategies to pricing that a pool cleaning business could use.
Cost-plus pricing: known as markup pricing is a simple strategy where the price is a fixed percentage added on top of total cost to provide the service. Providing a good quote will depend on the business knowing the following pieces of information:
1. Material cost
2. The amount of hours the technician will perform the work
3. Operational expenses
a. Fuel cost
b. Drive time
c. Maintenance required for vehicles and equipment
4. Salary for the staff
Armed with all this information, the equation for finding the final price is rather simple:
Final Price = (Material Cost + Salaries + Operational expenses) + Marketing + Markup
Market based pricing: another simple pricing strategy used quite often by businesses in many industries. The idea is to find out what competitors are charging in the area which is a simple internet search away. Thumbtack says that the national average for weekly pool cleaning service is $86 per month or $1,032 per year. Specialty services could run as high as $400.
Target gross profit-based pricing: this approach has businesses setting a price based on the desired gross profit margin. A quick search through the internet reveals the gross profit margin for a pool cleaning business to be around 40%.
Let’s say, for example, that you know your above material cost, salary, and operational expenses put together are going to be $100 for the work completed. Calculating the sales price based on a hopeful 40% gross profit margin has you taking the $100 and dividing it by 60% (.6), or the percentage of costs from total price, to get to $166.66 rounding to $170 for your customer: the total price the business should charge.
How many pools can one person clean per day?
An integral part of figuring out potential revenue is estimating the number of pools a technician can service in an hour. Based on this number and the set price from the points above, a potential revenue will start to become clear.
According to Pool Route Sales, on average a technician should service around 20 pools within a day, with some going as high as 30 and some doing less than 20. Commercial accounts will also take more time, so a fewer number of pools cleaned that day is to be expected. Drive time also has to get calculated into the amount of pools a technician will complete in a day, scheduling their route in the most appropriate way.
Seasonality of pool cleaning
Seasonality is a big-ticket item when it comes to calculating potential revenue and deciding on a business plan. As described by mHelpDesk, pool cleaning businesses have to try and take the off-season to their advantage.
Businesses that operate in colder climates, such as the Midwest, must expect private homeowners to shut down their pools by the time summer ends. The upcoming change of seasons is the best time to push for winter preparation, which many homeowners fail to do, but is necessary, and a welcome boost to revenue for the upcoming winter months.
Commercial and indoor pools should become the focus of any pool cleaning business during the off-season. As many of these types of contracts should be lined up by the time summer comes to a close in the hopes of maintaining a stream of revenue.
Pool Cleaning Business Revenue Potential
With the hard work out of the way, you should be able quickly estimate the potential revenue of a pool cleaning business based on a project number of customers X the number of times their pool will be serviced x the price of the service.
An example of this potential revenue estimate will have this information:
20 pools cleaned a day
5 days per week
$90 average price (as estimated above – this number will likely change based on your location)
4 weeks per month
3 month length of the pool season (this number will change depending on where you plan to open your business. For the sake of this example, we will use the Midwest with a 3-month season).
= $108,000 annual revenue
This projection is solely based on pool cleaning service, but pools also require more work. Whether a customer will pay for opening or closing their pool along with other maintenance, this estimated number will fluctuate.
Some days, a technician will clean more pools and on some less, especially if maintenance is required which takes a longer time. One thing to be expected is that though over $100,000 in annual revenue is a perfectly acceptable way for a profitable business to start, it cannot be sustained in the long run. The business has to grow beyond the owner to get to a higher revenue and overall payout.
Pool Cleaning Business Annual Revenue
Potential revenue is one of the key pieces of information any new business owner wants to know; pool cleaning businesses are no exception. In fact, according to these 3 sources (StartingYourBusiness.com, SpringBoard, and ICSTD), here are the expected revenues for a pool cleaning service startup:
Minimum annual revenue = $57,000
Maximum annual revenue = $124,800
Average annual revenue = $75,000
ProjectionHub’s pool cleaning financial projection template is a great help in determining revenue potential for the first 5 years of the business.
What are the common expenses for a pool cleaning business?
Operating expenses, fixed and variable, are all a part of doing business. These are expenses which cannot get overlooked and will impact the overall amount of take-home pay.
Fixed expenses are those that won’t change in amount from month to month and won’t care how many pools are serviced. Variable expenses are all based on the amount of work completed within the month. They key is that the total amount of these expenses shouldn’t exceed more than 20% of revenue, though it might be higher at first.
Fixed operating expenses
· Purchase of new equipment or rental
· Accounting services
· Advertising cost
Variable operating expenses
· Average cost of fuel
· Time spent driving to clients
· Equipment maintenance
· Vehicle maintenance
· Wages for yourself and potential staff
· Replacing used equipment including:
o Testing kits
o Skimmers and brushes
How profitable is a pool cleaning business?
Pool cleaning business Minimum profit margin = 15%
Pool cleaning business Maximum profit margin = 42%
Pool cleaning business Average profit margin = 40%
Again you can calculate profitability and everything else in this article using ProjectionHub's pool cleaning projection template.
Armed with all this information, filling out the template with information such as startup costs, projected revenue, and operating expenses should prove to be a breeze.