SBM #8 - POOL-ology at $4 million

Should You Pivot?

‘Small Business Black Holes’ exists to tell insightful, interesting stories about initially successful small businesses who found themselves in black holes, and through whatever means necessary, climbed out of them. 

Last time, we looked at how some people I just met may have themselves a 9 figure rocket ship of a business: so long as they make some tough choices quickly.

📓 The Overview:

  • Business: POOL-ology

  • Revenue Barrier: $4 million

  • Learning: Deciding when to pivot the focus of your business is when business owners earn their stripes.. 

📓 The Story:

Malcolm Marshall is someone I got to know on X and brought onto my podcast to talk about his business POOL-ology.

POOL-ology started in 2015 as a service, maintenance, and repairs business for swimming pools when Malcolm noticed the fragmented state of the pool service industry in central Texas. 

What does any good entrepreneur do when he sees strong cash flow in a fragmented industry? 

You guessed it: a roll up. Malcolm started to buy businesses and incorporate them into a bigger, full maintenance pool service vehicle: POOL-ology.

That makes sense, right? 

But as with many things in the small business world, the plan looked better than the reality.

They struggled to find people to work for them. 

Furthermore, it was hard to deliver high-quality customer service without Malcolm and his management team rolling their sleeves up and cleaning a few pools themselves. 

When you start a rollup you dream about cutting deals and allocating capital. 

You don’t dream about sifting cigarette butts out of pool filters.  

So after three years of stunted growth, Malcolm realized pool service wasn’t the money maker he thought it would be. 

That’s when he started testing the waters of pool construction. 

This is a common black hole that a lot of businesses face. 

Do you stick with your thesis or pivot? 

From personal experience, I would say there isn’t a right answer. 

This is a big decision for a business owner to make and not one that should be taken lightly. 

And in all honesty, this is where an entrepreneur earns his keep. 

To continue the water references, rough seas make strong sailors. 

Malcolm decided to pivot. 

And yeah, it worked out pretty well. 

Malcolm decided to move to renovating pools, weekly maintenance and equipment repairs. 

Construction is now 80% of their business, with service making up the other 20%. 

They build about a hundred pools a year. 

Revenue grew to $16 million a year. 

Malcolm made the tough call and changed the focus and five years on it looks like a home run. 

But as we saw with my company, Corner Alliance, there isn’t just one black hole. 

There’s always another around the corner.

🧑‍🎓 The Lessons: 

  1. Learn when to stick or twist. 

  1. Pivoting your business is sometimes the best option.  

  1. Learn to adapt with the demands of the market.

📅 Next Week:

Next week we will follow up with part 2 of POOL-ology’s journey and learn about how service providers to a small business can become a block on growth. 

Keep growing,

Alan

P.S.

Do you have a small business growth story and want to be featured? If yes, please submit it here: http://www.fame.so/sbp-story

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