Wanting to buy existing pool franchise shop/cleaning service

[poppystar7]

I have 3-4 YOE in the service industry but different field(Pest control) I am really looking into making a switch to being my own boss. Currently work as a Software Engineer and I’m tired of stressing over layoffs that seem to happen at random.

Current credit score is fair.

What do I need to know regarding a loan?

Asking price: 1.25 mil
Cash flow: 400k +
Gross revenue: 2.4 mil
EBITDA: 400k +
FF&E: 225k
Inventory: 100k*

Established 2004
Employees:10+

Financing:Seller will offer $350,000 / 7% / 5 Years.
4 week franchise training
Reason for selling: Retirement

This is only 1 I am looking at but a 2nd one I’m eyeing(non-franchise) is at these numbers

Asking price: 725k
Cash flow: 320k +
Gross revenue: 1.3 mil
EBITDA: N/A
FF&E: N/A
Inventory: 24k

Established 2008

Employees: 5
4 week training with owner
Reasons for selling: other

What can I do to improve my odds of being approved for a small business loan?

 

[michaeltx]

@poppystar7 Just don’t do it. It doesn’t make sense.

 

[mommybear39]

@poppystar7 Kind of first thing to really understand, people wanting to leave a 9-5 due to the grind, the layoffs, the stress…… running a small business is MASSIVELY stressful. Indescribably so. Instead of stressing about getting laid off and job searching you are now working literal 70-80 hour weeks, 7 days a week, 365 days a year.

Personally I would never pay a million dollars for a pool cleaning company. I don’t know a lot about pools, but these guys don’t drive around with that much equipment as far as I can tell so all you’re really buying is a customer list. If you really want to do this, my suggestion is to buy a used pickup and whatever equipment and start doing it evenings and weekends. Create a website, Facebook, get insured, start reaching out to neighborhoods with pools and doing some targeted marketing. Use google maps earth view find the nhoods with the most pools, pay .37 per house and send postcards to every single home. Put your toe in the water with $15k worth of investment.

Also know that anyone loaning you a million dollars will require collateral full stop. They prefer your personal home. And they will kick you and your kids directly onto the street if you default.

 

[marlovesjesus]

@poppystar7 Why not get into pest control ? Look up Pest Control Millionaire or Anthem Pest Control.

These are companies that grew to 1m+ in revenue in 2-3 years in pest control. You would only have to do the work maybe the first year and then just scale a team up.

 

[dougra2000]

@marlovesjesus I launched a pool design and construction company last year and we’ve done $3.2M in revenue since Jan 2023, so 14 months?

Pool money is where it’s at. Cleaning services are great.

 

[jerrythemaverick]

@dougra2000 Agreed. Pool service business can be solid opportunities.

 

[paulrhys]

@dougra2000 I think it really depends on your location. Where I live, a pool design and construction business is really different from cleaning services. There are a million pool cleaning companies, but design and construction is much more specialized and can charge a lot of money if you know what you’re doing and can get in with high end clients. But every Joe Schmoe has a pool cleaning company or a landscape business, so there is a ton of competition. Not to mention how many people have started to use robotic vacuums and learn to do their own chemicals.

 

[poppystar7]

@marlovesjesus No licensing. And a big pest control company has pretty much a monopoly in my area. I also had to get away due to some personal reasons.

 

[srdtrinity]

@poppystar7 If you need some help reviewing and digging into the opportunities in more detail, I would be happy to help, but to directly answer your question, here are a few things you need to do in order to increase your odds of getting an SBA loan:

1) Update your resume and include relevant skills and experience-- banks look for industry experience and management experience

2) Create a personal financial statement that lists out your assets and liabilities

3) Check your credit score-- if its "fair" be sure to have an explanation ready for why it isn't excellent

4) Talk to multiple regional banks and make sure to prepare for these conversations. Research what the loans look like, what the interest rates will likely be and brush up on your knowledge of the industry.

These conversations with lenders are basically interviews and they play a part in their decision to lend you money or not. Put your best foot forward and make a good impression by knowing the basics.

 

[beta2]

@poppystar7 I help facilitate small business loans. Re: purchasing an existing business, you could get this done with the SBA/financing.

I routinely see such loans approved in about 4 weeks (if all financials make sense and documents are provided quickly) when the existing business has been running for more than a few years and profitable. Based on your numbers, you'd be good to go on this front.

You would also be asked to put 10% down, or whatever makes sense in the case of a seller financing deal.

"Fair". Your credit score is hopefully 550 or more.

Feel free to DM/start chat if you have any specific questions or if you want a free consult.

Best of luck