Posted by Barney Beal, Content Director
In 1996, John O’Brien was traveling the globe looking for his next business when, visiting California, he saw a scraggily, surfer-looking type drive by in a rusted-out pool maintenance van.
“That’s when I knew I had found it,” said O’Brien. “The industry that time forgot.”
Hired by Cadbury Schweppes right out of college in Melbourne, Australia, O’Brien had some early success in his career, leading a project to turn 400 Cadbury Schweppes employees in the vending business into independent franchisees.
“I immediately saw the dramatic change in improvement and the self-esteem of these guys once they owned their own business,” he said. “I became a convert to the power of franchising and small businesses.”
That franchise project led to several more successful years with Cadbury Schweppes, but when O’Brien's brother died in a car accident, it led him to reevaluate his life and begin his global search for the next business opportunity. But he set some conditions. It had to be an established industry with growth potential and high profit margins. It had to be an industry that was disorganized but also service-based. And it needed to offer an opportunity for franchisees.
His global trek led him to California and to pool maintenance, which proved to be the perfect fit. According to O’Brien, 80 percent of the world’s swimming pools are over 20 years old and there are more than six million in-ground pools in the US alone. What’s more, there are roughly 10,000 pool shops in the US and about 85% of them are independent, ‘mom-and-pop’ type operations.
O’Brien went back to Australia, where the demographics were much the same, and in 1996 founded Poolwerx. Twenty years later, Poolwerx opened its first stores in the United States, beginning in Arizona with 10 stores. Today it is the largest pool service company in the world with over 500 service vans and 160 retail stores seeing 500% growth in the US in its first four years.
The strong growth of Poolwerx can be attributed to a few key factors, according to O’Brien. Pool owners tend to be wealthier than non-pool owners and those that pay others to do their maintenance are an attractive target market. Additionally, pool maintenance has been a weekly service, paid monthly.
“We realized the only way for it to be viable was to do one monthly call,” O’Brien sad. “We had to convince home owners to upgrade their package.”
Australia, where there is greater appetite for salt chlorination to replace other chemicals and automation and energy efficient pumps that help reduce the significant energy consumption of pools made the monthly visit an easier sell. Having made the case in the Australian market, Poolwerx was better positioned to make it to the American market as well.
O’Brien also found an industry ready for franchise operations. Many mom and pop maintenance businesses were like many family businesses that have trouble handing the reins over to subsequent generations and looking to sell. Franchising offered a way out by making the business more attractive.
Poolwerx also combines its service business with retail and ecommerce. The retail stores, which Poolwerx differentiates from the competition with sleek, modern designs, offer equipment, chemicals and pool accessories, while the ecommerce site routes business to local franchise stores based on zip codes and creates opportunities to win new service business.
Finally, Poolwerx’ corporate office took the time and effort to evaluate each individual market to set the optimal price points to reach its profit margins.
As Poolwerx has grown, it has been able to take advantage of technology advances to add offerings to its service like the ability for customers to log in to online portals and see charges or check on equipment. Similarly, remote sensors can now trigger a service call after incidents like a storm that may require a technician to come and retest chemical levels at an outdoor pool. With a significant portion of its customers operating public pools, like hotels and universities, Poolwerx franchises need to be particularly attentive to local board of health regulations for pool quality.
Yet, as Poolwerx was expanding into the United States, O’Brien realized his existing homegrown accounting system was not going to allow him to scale as he wanted, creating difficulties with monthly close and tax compliance. Worse, accountants were reluctant to even use the cumbersome software. After a twelve-month scoping project O’Brien selected NetSuite to run his financials, adding SuiteCommerce InStore last year in retail and adopting NextService, a SuiteApp partner to manage service scheduling and tracking.
Franchisees are able to see where their trucks are at all times, track fuel consumption and automatically reroute technicians for maximum efficiency. It can also tell owners when a technician is somewhere they’re not supposed to be or if they’re at a location longer than they should be.
The enhancements and improved visibility have been critical to success. With NetSuite in place as the company launched in the US it’s seen its average transaction value in retail go from $86 to $89 and its average van revenue per day improve about 3% in the midst of its rapid growth. That visibility extends right down to the employee level, enabling individual employees to see their own average transaction value.
“We didn’t use to have this data until the end of the month,” O’Brien said. “Now we have Toolbox Tuesday. Every week we can all look at those figures. We couldn’t do that before. It’s the power of data.”
Posted on Wed, May 8, 2019
by NetSuite filed under