Selling your business to pool route brokers
When it comes to pool route sales, it’s currently more of a buyer’s market. That’s according to the pool route brokers who spoke with Service Industry News.
Tommy Falvai, a broker with Pool Route Pros, Inc. said that he has seen a huge slowdown in sales, which he attributes to the pandemic.
“The market is still active but potential buyers are taking much more time to commit,” Falvai said.
National Pool Route Sales broker Chris Webb said that he has noticed this too. According to Webb, in a few areas, the market is somewhat lopsided – more sellers want to exit than there are ready buyers available.
“I have found them to move a bit more carefully and spend more time with our agents being qualified before moving forward,” Webb said. “We have seen this in other times when the stock market and economy is in the news, people tend to move with more caution, and subsequently, routes can spend a little more time on market.”
Still, selling your route through a pool route broker may be the easiest way to retire. That’s because for pool service professionals nearing the age of retirement, there are only a few options when it comes time to stop working.
Those with children or family in the industry may have the option of leaving the business in the capable hands of the next generation. This can be a financial boon for everyone concerned.
Those with competent and ambitious employees may choose to sell their business, either outright or over time, to their most eligible service tech.
There’s always the option of trying to find another pool service professional who has the financial means to buy the business outright – a possibility that can be challenging depending on the business’s location as well as the current economic climate.
For those with larger operations, it can be advantageous to sell to a franchise, which in some cases will take the whole package, from your service techs to your customer service department, ensuring that you leave both your customers and your staff with a reputable service firm.
But for many, other than simply giving accounts away, selling the business through a pool route broker is often the most straightforward approach.
Pool route brokers can take away the burden and frustration of trying to sell your business by connecting you with serious buyers. They are adept at presenting well-qualified buyers to business owners looking to sell their route, and many will assist both the buyer and the seller every step of the way.
Most price the route at between 8 to 13 times the monthly service income, depending on the geographical location. They also draw up the legal contract with special binding conditions.
Some of these may include training for the buyer, non-competition clauses, and a 90-day guarantee period – meaning that any accounts lost in the first 90 days will be refunded to the buyer, unless it was through his or her own negligence.
The assurance that pool route brokers can provide through noncompetition clauses is an especially valuable feature for many buyers. When buying a route directly from a seller, there may be no guarantee in place to prevent the seller from re-acquiring accounts that had been sold.
Some brokers provide even greater personalization, such as calling customers on the accounts to verify legitimacy.
For the seller, route brokers provide substantial convenience, and for this, they generally take between 10 and 20 percent commission on the sale.
But for sellers, the majority of whom are pool service professionals looking to retire, the ease of business transfer through a broker can make it more than worth it.
And according to Webb, moving forward, the market may soon shift to favor sellers as buyers get a better sense of the profitability of the pool service industry.
“I anticipate the market in 2022 to continue as it is now through midyear with buyer confidence slowly improving,” Webb said. “Pool service professionals have done a great job so far upkeeping the service and stability of the market. If they can keep a sharp eye to maintain its profitability, we can always help find them a buyer.”
Falvai agrees. “I’m very optimistic that the pool industry will rebound especially since it’s considered an essential service,” Falvai said. “It’s a great idea for pool service companies to focus on maximizing the best rates possible on their accounts while the industry climbs back – especially in pool route sales.
Chris Webb. National Pool Route Sales. www.poolroutesales.com. 877-766-5757 Tommy Falvai. Pool Route Pros, Inc. www.poolroutepros.com. 855-790-PROS(7767).