Start a pool installation business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your pool installation business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a pool installation business?
Fortunately, the initial investment to start a pool installation business isn’t too high. It ranges between $39,900 and $65,000, which includes initial franchise fees, supplies, equipment and building materials. If you want to extend services to pool cleaning, expect to pay an additional $2,000 or so for the equipment.
What are the ongoing expenses for a pool installation business?
Firstly, you’ll need to pay your workers anywhere from $10 to $50, depending on their experience and job. Pool cleaners, of course, should be paid far less than installation technicians. Again, overall expenses are about $20,000 to $30,000, depending on the materials used.
Concrete pools cost the most to install, at about $50,000 to $100,000. Vinyl pools, meanwhile, cost about $35,000 to $50,000 to install. Fiberglass pools cost between $45,000 to $85,000 to install. As a rule of thumb: Most materials cost about $50 per square foot to install, modified for the material used. You’ll need to pay for a solid insurance policy, and you’ll additionally need to depreciate your equipment. If you want to establish a warehouse, you’ll need to pay about $13.20 per square foot. A small shop, meanwhile, can cost as little as $11 per square foot—if you want a small location to promote your services.
Who is the target market?
While a pool installation business can serve multiple communities and businesses, it’s better off prioritizing residential clients. Many homeowners undergo renovations, installing pools as a result. Over time, backyard pools can be damaged due to misuse or improper care. Commercial properties, meanwhile, have consistent maintenance conducted—either by in-house workers or an external contractor. Preferred clients are easy-to-deal-with homeowners, ones who will favor noninvasive services.
How does a pool installation business make money?
While a pool installation business can make money by managing pools, repairing pools, checking up on pools or even removing pools, they primarily gain revenue via pool installation. The installation process is lengthy, and providers must take great care in reducing wholesale costs, labor expenses and timeframes to maximize each installation’s payoff.
How much can you charge customers?
Pool installation varies depending on the materials used. Most, however, cost about $60,000. This offers a good bit of revenue, as the initial cost of goods is approximately $20,000 to $30,000. If you’re considering providing pool services, anywhere from $40 to $200 per week—depending on the pool’s size and needs—is a viable price range.
How much profit can a pool installation business make?
Every year, a decent-sized pool installation business can net around $200,000 in revenue. That said, successful pool installation businesses are incredibly good at managing expenses. Some top pool installation companies, in fact, make about $700 million in revenue. If you’re in the top 50 pool installation providers, you can make a lot of money.
How can you make your business more profitable?
Expand quickly. Whether you’re providing services to residential homes or living communities, you’ll need to expand your service area as far as possible. Offer other pool-related services dealing with cleaning and maintenance.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your pool installation business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a pool installation business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Pool installation businesses should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example of one such services agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your pool installation business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
A pool installation business can be run out of a storefront or warehouse. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a pool installation business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your pool installation business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a pool installation business
Even if you’re focusing on residential homes, it’s a good idea to market to apartment complexes. Living communities are frequently well-connected, acting as a “central hub” for local pool businesses. Homeowners associations, too, are great resources. Don’t forget about private residential businesses, and distribute business cards where possible. While online marketing as a pool installation business may not be lucrative, few tactics beat distributing printed ads and business cards at home good stores, pool builder offices and pool supply stores.
How to keep customers coming back
Many of your customers will be attracted via home improvement. So, if you can spot a Home Depot, Ace Hardware or a similar location, consider promoting your pool installation business there. Customer retention business, as a pool installation company, is difficult. Unless you’re offering check-ups, maintenance and repair, you’ll likely experience one-time customers. That said, a lot of apartment complexes are part of an association. If this is the case, target other connected complexes. Become close with the property management team, and become a consistent provider.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Pool Installation Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
A pool installation business is ideal for any worker who enjoys working with their hands, conducting services outdoors or who loves swimming pools. Any hands-on contractor who’s had work as a pool technician may wish to take matters into their own hands, making money while installing high-demand luxury items in homes and communities alike.
What happens during a typical day at a pool installation business?
A pool installation business doesn’t only install pools. Often, it creates the materials needed for such installation. A pool installation business judges a pool’s chemistry, setting its plaster, installing its equipment and ensuring its durability throughout many months. Because a pool isn’t simply a basin, a pool installation business must install and know how to repair and remove pumps, filters, draining systems, pool lights and pool equipment.
From an administrative standpoint, a pool installation business must market its products and services, finance itself, obtain licenses, obtain permits and adhere to industry regulations. They must also contact wholesalers to source any equipment being installed.
What are some skills and experiences that will help you build a successful pool installation business?
You will need to understand pool construction at an in-depth level. Prior experience as a pool contractor helps, as does experience as a pool installation company technician. As a business leader, understanding emergent technology, capital costs, marketing, management and finances helps. Computer software, more than ever, is being used as a pool installation aid. For this reason, any background in IT is a plus—although it isn’t mandatory.
What is the growth potential for a pool installation business?
A pool installation business has quite a lot of growth potential. In fact, the job’s annual growth between 2012 and 2017 has been about 3.9 percent. Pool installation is a $9 billion industry, and it’s only growing. As a small-time provider, you may find it difficult to break into larger markets. That said, the swimming pool construction industry carries a low capital intensity level. It’s a specialty service, relying heavily on employee knowledge and skill.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a pool installation business?
Above all, you’ll need to focus on a niche market. As stated above, it’s often more lucrative to serve residential areas—due to their service potential. If you decide to prioritize commercial properties and living communities, however, choose a location which has a lot of development. College towns, downtown areas and recently gentrified areas are fantastic locations for a pool installation business. While apartment complexes may eventually run out of space, surrounding areas being filled with residential homes, soon after, can provide a solid cross market.
How and when to build a team
Pool installation requires a lot of legwork. Ideally, you should acquire a team of at least five workers before conducting services. Between financing, management, installation and material sourcing, a pool installation business can become burdensome if not handled appropriately.