One question I see all the time these days is, “What do I charge for my pool service?”
Although I understand where the question is coming from — you see so many different posted prices for pool service out there — asking what precise amount to charge is really the wrong question, because there are so many variables.
People buy chemicals and equipment at different rates; they pay their technicians different rates, they provide different levels of service, and they may or may not have auto loans and office space. So for someone who’s trying to figure out their pricing, a flat answer doesn’t do much good — in fact, it probably confuses them more.
A better question is, “What’s my break-even point?”
Your break-even point is a useful number that can be calculated like this:
1. Figure out all of your expenses for the month, taking everything into consideration: chemicals, gas, vehicle costs, vehicle payments, uniforms, salaries, equipment costs, vacuums, net brushes and even sun passes.
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2. Add all of that up, and divide it by your pool count. The result is your break-even point.
If you go out to a pool and bid less than your break-even point, you’ll know that you’re not making money — you’re losing money. That’s no way to run a business. So you need to calculate exactly how much to charge in order to be sure you’re making a profit.
$92 TO BREAK EVEN
Personally, I like my calculated break- even point to be conservative to be prepared for unforeseen business hazards. To do that, you need to figure out what your minimum amount of pools would be if hell froze over. For instance, in my business, I have 340 or 345 accounts right now with service each week. So I like to use a conservative 200, as a worst case scenario, instead of 345 to figure out my break-even point. (It has the added benefit of creating a higher break-even point, because the closer the pool number is to zero, the larger the break- even point is going to be, which pushes pricing in the right direction.)
Before COVID, my conservative break-even point was $92 a pool. That number factored in every expense that my company endures, from employee salaries to gas rates. So I knew that I had to charge a minimum of $92 a pool just to break even and cover expenses.
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But as a business, of course, you don’t want to just break even. So I started charging $130, which is high for my area, but if you ask me, that’s where you need to be these days — pushing the envelope. There are a lot of people under-pricing their service who don’t end up staying around for long.
Especially nowadays, almost everything is going up in price, so you need to constantly re-evaluate that break-even number. Customers are paying more for gas, food and a lot of other things, so they won’t be surprised to hear that since your supplies are going up, their price needs to keep pace.
I’d recommend reassessing your break-even point quarterly to make sure you’re keeping up with your own rising costs, and especially at the beginning of the year. It’s the only way to make sure you’re profitable all year round.
This article first appeared in the October 2021 issue of AQUA Magazine — the top resource for retailers, builders and service pros in the pool and spa industry. Subscriptions to the print magazine are free to all industry professionals. Click here to subscribe.