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huskyridor

Note to all readers

17 years ago

After posting a few minutes ago about a poor pool build experience I thought I'd take a moment to enlighten potential pool buyers.

Right now my industry (pool construction) is in a tailspin. This has made it difficult on all companies in the game. Our margins have degraded bigtime.

Now, more than ever, is the time to really place your potential builder under the magnifying glass before signing a binding contract.

In the past few months I've finished a half dozen pools and have at least 7 more quotations behind bankrupt pool builders who low balled the projects and left the buyers high and dry.

My most recent quote was for a buyer who has paid 90% for 50 percent of the work. He's paid 60k on a 65800 contract and has no equipment, decks, plaster, and the plumber and electricians labor charges. The builder set decking forms, but didn't pour concrete to collect his deck draw.

He told the buyer that he's out of funds and can't complete the job until he gets some new work. Buyers don't want to sign with him because they know he has several uncompleted pools. They started this pool in August of '08. My heart truly breaks for the pool buyer but I can't let it affect my quotation for the finish up. In an effort to purchase a more affordable pool he opted not to sign with the better companies in my area who were 5 to 10k more for the new pool. My bid was over 33k to finish and this was based on a 3% lower markup on my services than I currently strive to achieve. The pool that should have been in the low 70's will now be 90+.

He's not alone, almost all of my finish ups have been exactly like this one.

Take your time, check out your potential builder, ask to see and meet some current and recently finished pool buyers, and if he'll give it up ask for numbers of some of his industry references.

I feel partially responsible for some of these buyers. Had I given them the numbers to my wholesalers, guniter, PebbleTec'r etc.. to call and ask about the standing of my company -VS- another company, the ones I quoted might not have signed for the lesser sales price if they thought they were at risk of signing with a near bankrupt company.

These men in the industry will get the work regardless of who they sign with and will gladly tell you if they have favoritism of one over the other. The favoritism is based on amount of work and prompt payments on invoices.

When one man has a 100k credit line and another is on C.O.D. it's because they both earned it, one by paying the invoices and the other by dodging the invoices.

Right now, in my area, the weak builders are quoting cost plus 10. I'm currently quoting cost plus 20 which is 10% less than I've quoted all my life. I won't go to a meet comp of cost plus 10 but have recently signed a few at cost plus 17 or 18. These are poor margins for any company large or small, but they are margins that you can stay afloat on.

Bear in mind that all pool builders are in the same game as any business owner, that is the cost plus markup equals sales price game.

I'm hoping that the potential buyers will still move forward and buy the pools they want. I have many contracts from several months ago that I was asked to wait on until they saw what the economy was going to do. Although they were past the 3 day rescission period and could have been held to the deal, we had no commencement on the job except for getting the building permit. I asked to be reimbursed for the permit and would wait with them.

See ya,

Kelly

Comments (18)

  • 17 years ago
    last modified: 11 years ago

    Kelly
    What area of the country are you in?

  • 17 years ago
    last modified: 11 years ago

    This is happening coast to coast. Without profit, there is no product, there is no service to depend on.

    Its time to put a stop to the vicious cycle down. Doing due diligence will catch the BS-ers but don't expect the better companies to cut things too tightly or they can't continue to be the better companies you want and need.

  • 17 years ago
    last modified: 11 years ago

    This tale sounds all to familiar to my situation. The big difference was that we pursued the top builders in our area (Baton Rouge) and never mentioned cost in our contacts, but we could not even get a return call. When we did finally get in contact with our prefferred builder (Russell Pools), he came out and showed us a bunch of pretty pictures and said he would be back with a proposal in ten days. A full month later, my wife called him and he said he did not have time for us and to find another builder.

    We ended up calling a builder in Laffayette (Jerry's Pools) who refferred us to his son in Baton Rouge (Danny Thibodeaux). We visited a pool construction site and spoke with the homeowner,(who later told us he lied because he was afraid Danny would not finish his pool if he came clean),went through a brief design phase and signed a contract for $58000 for a 720 sf pool, 8 ft spa, heater, polaris, cartridge filter, Easytouch 8 with wireless remote, 800 sf of deck with cool deck, electric included.

    Fast forward to the Friday before Christmas when the builder calls and tells us he is out of business and its been really nice working with us. We had a gunite shell with brick and tile and he had 80%.

    We hired a sub crew to finish the pool itself, we procured our own equiptment, hired our own electrician and plumber. We are almost done (about 15K over budget). Our biggest problem is that we cannot get anyone who knows anything about the Easytouch system to tie the whole thing together. Again.....we haven't even gotten as far as the price before we get shut down on the phone with these people!!!!

    Do any of the PB's on the forum have any suggestions?

  • 17 years ago
    last modified: 11 years ago

    About the Easytouch. Call Pentair and ask them if they can suggest someone in the area.

    If you are electrically savvy or have an electrician It can be done relatively easily.

  • 17 years ago
    last modified: 11 years ago

    Kelly,
    I take offense to you lumping all C.O.D people in the same mold. I have never ran credit accounts. I learned that from a guy whose been doing this for thirty years. All my distrubutors, subs, and clients love me. They never have to wait to be paid and and they are not wondering in times like these weather I'm going to pay my $100,000.00 bill at the end of the month. If all distrubutors demanded C.O.D., They and homeowners would not be sweating bullets like they are now. I'm seeing companies that have been around 25 years tank. I live below my means and pay everyone promptly upon completion or delivery. I hope you relize every situation is unique.

  • 17 years ago
    last modified: 11 years ago

    Racket

    I am anything but electrically savvy (I know just enough to get me killed). The electrician just left and he hooked up the pumps just enough to circulate the water but would not go farther than that. we have no auxillary items working and no programability at this point

  • 17 years ago
    last modified: 11 years ago

    Devildog,

    I don't believe he was calling you or anyone that pays C.O.D. by choice out. His statement simply expressed that some PB's have been forced by the subs to be C.O.D. because they refuse to pay their bills. You can only rob Peter to pay Paul so many times before Peter wants his money. Coampanies that do this are only prolonging the inevitable.

  • 17 years ago
    last modified: 11 years ago

    Sal if you can find a smart electrician I'd be happy to correspond with him on how to get the easy touch sorted out.

  • 17 years ago
    last modified: 11 years ago

    Devildog, there's a BIG difference in those who pay C.O.D. by choice and those who are there because the wholesaler, guniter, redimix company etc... placed them there due to the inability to make delinquent invoices good.
    IMO, this is the biggest reason that they'll come out and TOTALLY lowball a project. The need for cash money becomes a complete necessity when you have no available credit.

    quote" If all distributors demanded C.O.D., They and homeowners would not be sweating bullets like they are now. "quote
    I disagree. My wholesaler (the largest in the world) and my guniter know which companies they can trust to have higher than the average companies balances. They and my buyers have confidence in my organization, I also have some really good competitors they trust too. We enjoy a very large portion of marketshare and don't drop our shorts for potential buyers when they give us lowball feedback from those other builders.
    I could never make it on cash terms because of the volume of my business. In an average busy season week I'll dig, steel, gunite, plumb, wire, brick and tile, pour concrete, plaster, and cleanup 2 pools plus purchase 2 equipment sets at an average of $8000 each. This will be at typically 10 different jobsites. If I had to drop everything to run checks I wouldn't get any of my work done or I'd have to hire a fulltime man just to run by sites to drop off checks. There are a bunch of invoices at the end of every week that I have to make good.
    I learned a long time ago that I'll never collect all the money at once and I'll never pay all my bills on the spot.
    Thats why having good terms with my service providers and suppliers is very important.
    My company pays these invoices and weekly payroll first, equipment and truck note second, shop note light/phone bill third, insurance fourth, and if there's any money left me fifth.
    The truth of the matter is that I haven't paid myself my monthly salary for Nov. Dec. or Jan. yet due to cash flow -VS- incurred costs of conducting business when your only digging a few pools a month like I did in the last quarter of '08. I've hammered away at my savings account to pay all my household bills.
    It's OK though because I just gunited 2 pools last week and have 3 to dig and gunite this week. It doesn't take but a few weeks of a workload like this to get you back in the game.

    I'm sorry you misunderstood the intent of my statement.

    See ya,
    Kelly

  • 17 years ago
    last modified: 11 years ago

    Kelly,
    Sorry I miss understood you. I'm a smaller custom builder that has no reason to run credit accounts. I guess I'm a little sensitive when I hear things like that because I run into the bigger companies that bad mouth the small guy all the time about him being a car crash or heart attack away from being out of business. Hallmark in San Diego would always brag about how much credit they had and how they were better than the rest of us. Well look were they are now.

  • 17 years ago
    last modified: 11 years ago

    racket - thanks. We were lucky to just get an electrician to come out to do the job. He was not interested in learning/doing more than hooking it up. It is just so frustrating to practically beg someone to come out. Here is money - just show up for the job.

    On the economic side, I have my own business, and while La. is not as bad as some places, there is a noticable change in purchasing behavior at my customer's stores/restaurants. I'll keep supporting them like they support me, and keep on pushing through it.

  • 17 years ago
    last modified: 11 years ago

    Kelly,

    Great post. My father and I just recently put together new client books to address many of those issues and bring the truth out. They are a rather extensive list of questions for pool buyers to ask every builder they interview and niclude many of the items you refer to and more. The book is a step by step guide to picking a part the pool builder. In the end, you're left with the best of the best, and can clearly see through a lowballer, scammer, and builder on the verge of closing.

    Let me know if you'd like one mailed. Id love to get your feedback and improve it while helping out another honest builder...

    Tyler

  • 17 years ago
    last modified: 11 years ago

    Call me a scavenger if you want, but every company that goes out of business or cuts corners at times like this only provides me more sales and makes me look better. Survival of the fitest. Unfortunate for the customer and the reputation of the industry as a whole though.

  • 17 years ago
    last modified: 11 years ago

    Kelly,

    I would like to see what you have put together.

  • 17 years ago
    last modified: 11 years ago

    "Call me a scavenger if you want, but every company that goes out of business or cuts corners at times like this only provides me more sales and makes me look better. Survival of the fitest. Unfortunate for the customer and the reputation of the industry as a whole though. "

    Well not always. I end up on many projects where the builder screwed up things royally and they ended up making a lot of profit while we are working for service wage to fix it.

  • 17 years ago
    last modified: 11 years ago

    Maybe I am wrong but wouldn't this make buying fiberglass a safer choice right now?

    Isn't there less subcontracting going on?

    You have the national company (ie: San Juan, Viking) that may stand behind you.

  • 17 years ago
    last modified: 11 years ago

    "You have the national company (ie: San Juan, Viking) that may stand behind you." Which would refer you to your builder.

    I would doubt that they would fly out from an abandoned market to help you.

    It doesn't matter if your pool came on a truck or in a truck if your builder goes OOB you are gonna be in bad shape.

  • 17 years ago
    last modified: 11 years ago

    Kelly and Tyler,

    I am with you guys. I am in Orlando and I am sickened by how much business I lost to these crooks that leave the customer stranded! I am a medium sized builder and have seen from the large to small builders go under. This economy is showing that it does not matter much how big or small, how established, the stability really rests on how financially sound the company is as well as their customer service history. I used to tell clients to check homeowner references, now its smarter to check trade references. The classic sign a builder is having trouble is an increasingly troubled Better Business Bureau record. ItÂs good that the economy is weeding these bad builders out. ItÂs too bad that homeowners have to get caught left hanging when the pool builder does not finish the job or pay the subcontractor.

    Jason