Running a Service Business: 5 Financial Mistakes to Avoid

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When you launch a business, you always want to make sure you start on the right foot. That’s especially true for new pool service businesses — it’s easy to make a financial mistake that will haunt you for months and even years, making it that much more difficult to turn a profit.

To help, I want to share with you the top five financial mistakes I see new pool business owners make. Read on to learn more and hopefully you’ll protect yourself from making the same mistakes.


A vehicle is definitely an important part of your new service business, but going new isn’t the way to go. Let’s break it down: A brand-new work truck, decked out with the features you’ll need, is going to cost about $50,000. If you put down $5,000 to finance it over the course of 72 months, the most common loan term, you’ll be looking at a payment just over $800 each month.

That’s a huge chunk of money for a vehicle that is going to get destroyed by the chemicals you carry from stop to stop, beat up by your employees, etc. Knowing all that, do you really want to spend that kind of money on a new vehicle?

The most successful businesses I know of started out with used trucks. One of my friends out in Texas, Scott Davis, is a huge advocate of buying used — he only buys vehicles with well over 100,000 miles on them.

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Going used means a one-time payment and then you own it outright, so you don’t have a monthly payment bogging you down. The naysayers will say, “Yeah, you own it, but it’s old and has a ton of miles on it so soon you’ll be paying through the nose for repairs.”

That’s true, but trucks these days are meant to run 200,000+ miles, and the likelihood of needing a major repair in your first year for a vehicle with 100,000 miles on it isn’t that likely.

So buy a used truck and avoid that high monthly payment. It’ll also give you a lot of peace of mind because in the early days of your business, you’re going to make mistakes. You’ll think your chlorine is secure in the back, but then it’ll spill a little. (Side note: Get chlorine caddies for your truck!) Something heavy will fall and make a dent. With a used truck, those little bumps in the road (and your truck!) won’t be a big deal.


You don’t need office space for a pool cleaning business. You’re not asking people to come to you to discuss pool service; you’re going out to them, which has the advantage of you getting the chance to examine the pool you’d be working on. Unless you’re running a franchise (and that’s a different story) or have employees, you don’t need that space.

In my area it costs $1,200 to $1,800 to rent office space. So do the math: If you rent office space and buy a new truck, that’s $2,000 to $2,600 you’re paying each month before you even set foot outside your house!


Guys, in my opinion, the act of buying a pool route is a dying business. It’s just not as necessary these days with things like digital marketing that make it easy to find new accounts, or industry friends you have — people like me who are always throwing leads to people.

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If you need to buy a pool route, go small. You don’t want to bite off more than you can chew with a new business; going small will help you get started and cover your bills. Slowly, though marketing and word-of-mouth, you’ll naturally grow.

If you finance a huge route, you’re looking at $1,500, $3,000, $4,500 each month. Coupled with the first two mistakes, you’re looking at $6,000-$7,000 in outgoing money before you even make a dime. And that figure doesn’t account for your other monthly costs like chemicals and insurance.


I cannot explain enough how important it is to make your customers prepay. We all prepay for cable services, for our mortgages and so on — people are used to paying in advance! And with a new business, the last thing you want is to risk not getting paid for your work (or even getting delayed on your payments!).

During the first year and a half of Chlorine King, I did post-pay. As my business grew, it got to the point where I was waiting on $5,000, $6,000, even as much as $10,000 in overdue payments. It’s just not sustainable.

You put time and energy into your work; the least you can do is make sure you get paid for it.


When I first started, I set taxes aside because you’re generally not going to have payroll your first year; you’re essentially loaning money to the business and then the business pays you back.

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A lot of people in that situation, myself included, sort of take money out of the company as needed (and obviously kept the books accurate and everything as far as what was being paid back), but a lot of people forget about taxes. That can be a serious burden when tax season comes around.

I set 25% of my sales aside so when the tax bill comes, it’s no big deal, I just cut the check and move on. When you don’t have that spare $8,000, $12,000, $20,000 set aside and you get that tax bill, it can be a really stressful experience. Set taxes aside as money comes in and you’ll thank yourself later.

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