My Favorite 5 Business Ideas in the Swimming Industry. Ep. #046

I think you're always going to be fighting gravity to get pool parties there on a Wednesday morning. Right. But if you were to just teach swim lessons Monday through Friday, maybe Saturday morning, and then rent it out for three to $400 an hour, which is fine if there's 12 people there and they're all venmoing each other and then you don't even own the house, that could be a really good model. Welcome to the Kerner office. So my goal here on the Kerner office is threefold. One, help you learn about different industries to help you learn how to grow your business. And three, give you business ideas if you haven't started a business or if you want to start another business. So a few weeks ago I posted about the swimming school industry and how it's kind of a racket because the instructors are not incentivized to teach your kids how to swim because they want recurring revenue. And it blew up. It went viral. A lot of people were outraged. And this guy named Josh Scott popped up in the comments and said, hey, I own a bunch of swim schools in Sarasota, Florida. I could talk about this. So I said, come on the pod, let's talk ideas. So. So I want to hear about your business. Yes. But I also want to hear about tangential ideas that anyone listening to this could start in the swimming industry. Maybe they have a hundred dollars, Maybe they have $100 million. I want ideas for everyone. And so I think you'll like this. You're going to learn about the swimming school industry. And then near the middle to the end of it, we talk all kinds of creative ideas. Renting a house on Airbnb just for the pool, just to rent the pool out. You could rent it out to swim instructors, you could rent it out to parties, above ground pools, putting them inside strip malls, all kinds of cool business ideas. Enjoy it. Be sure to subscribe and share with your friends. Okay, well, I've got Josh Scott here. Josh is the owner of. What's your name of your business again?

Scott have two Swim SRQ and Swim Academy, both on the west coast of Florida. Reason being there's two is SRQ is actually the airport code of Sarasota. And when I started this, I never really thought about expanding beyond where we're at. So I called it some srq. It was a great name. Locally, a lot of moms wear, you know, trendy SRQ stuff, hats, T shirts and whatnot. So everybody got their name.

Yeah.

Then as we expanded, we've gone up north of Tampa, we had to create an entirely different brand. It's basically a clone of the website. Everything's the same on the back end, but we call that one just nice generic swim academy.

Okay. All right. So to put even cleaner, Josh is the owner of two swim schools out of Sarasota, Florida. I tweeted about swim schools last week, and it went viral. And Josh popped up, and he's like, hey, let's talk swim schools. And I thought, that's an amazing idea. So here he is, and here we are. So, Josh, tell me about when you launched your swim school and why you launched your swim school. Like, what was the triggering event that led you to launch it?

Totally, yeah. My wife and I both come from a competitive swimming background. We were both college swimmers. I swam at Syracuse. My wife swam at Cal Berkeley. So swimming and coaching has been in our life quite a bit. We moved from California in 2016. In California, I owned a swim team and a swim school. I was more focused on the competitive side. And what I realized when I created that business, I created a great job for somebody or two people that wanted to do that for the next 30 years of their life. That wasn't me. I wasn't really passionate about the coaching side anymore. I wanted to be more involved in business and growing something and scaling it, and I sold it to my partners, and we moved to Florida. So when we moved to Florida, we had no intention of being in the swimming industry. But around that time, we had our first child, and when he was about six months old, we were looking around and looking at the options for him to learn how to swim. There wasn't really anything that was satisfactory to us. And Swim SRK was born. So we started in one lane of a rented pool, and it just exploded from there. So swimming is one of those things when you grow up in the aquatic world, it's kind of hard to get away from it. It kind of sucks you back in. So that's where we found ourselves.

Okay, so what does it look like to rent one lane from a pool? How do you. How does one do that?

You know, this industry is unique in a lot of ways, and that a swim school means a lot of different things. And for that can mean running out of your backyard pool. That can mean renting a lane. That can mean building an entire facility. For us, we really wanted to gauge demand. So I was heavily involved in master swimming at the time, which is basically adults swimming, training, competing, going to meets for fitness. It's a great social activity, great way to meet people. And I talked to my master's coach and he said, hey, you should go check this out over there. I know somebody who's running an adult learn to swim program. So they didn't work with kids and they had a master lease on this six lane pool and they barely used it. Their model was to do week long clinics. So that left the pool vacant for basically three weeks out of the month. And we essentially approached them and just worked out a deal. I think our first deal was about 500 bucks a month to Lisa Lane. And we grew from there. My wife had a pretty big name in the area from her competitive days, so we were able to get our first 2030 clients simply posting on Facebook with her network. A lot of the people she swam with when she was a kid were starting to have kids at that time. So that's how we started. Then it evolved from there. And we're still constantly on the hunt for quality lane space. We have five locations now, very stable, solid locations. But we've also taken down pools and worked out agreements only to be kicked out because the owner didn't know what they were signing up for with the number of kids coming to the pool. So our model is using hosted facilities. But there's definitely a double edged sword with that. You really. We're at the point where we need consistency so we need to go with reputable people. We have a contract with a national gym chain that is definitely very stable and have been a great partner. We've gone the country club route, we've gone even senior living facilities, we've gone neighborhood pool, we've worked with swim teams. So we kind of know what we're looking for. But we've tried a lot of different things and you know, have great locations now, but we've definitely solidified and then lost locations for various reasons as well.

So is the surprise just that like a ton of kids are showing up and it wasn't what they expected? Maybe the expectations weren't exactly set on the front end.

Yeah, I mean, I always try to set expectations on the front end, but a lot of times there's multiple people making those decisions and the person to make the final call didn't necessarily approve it. So I'll give you an example. I'll give you two examples actually. This area of Florida and Sarasota, you know, north and south, is really just exploding. And we about two years ago, we started at a country club that's about 20 miles south of us. It was a new market for us. We advertised, we were operating three weeks and we got up to about 85 kids at the country club and a couple members complained on Saturday mornings that they didn't have their particular lane or there were kids making noise. So. So the GM just said, that's enough. So we had spent all the resources to really do a great job pre marketing and I mean, 85 kids in three weeks is awesome. That's a really, you know, you could tell there was pent up demand. That was the saddest part. They didn't have resources in that area to help these kids learn how to swim. So that was a situation where we were done after less than a month. And then another time we actually had a great assisted living facility in Tampa where they weren't using the pool in the afternoon. A lot of the members and residents there use the pool in the mornings for their water exercise. But they were having dinner four and five o', clock, they were hitting happy hour up. It was actually a really nice facility. It was a beautiful pool. So we would come in around four and do lessons until eight. But then the general manager left and the new duty general manager said her insurance, you know, carrier advised her not to continue. Even though we have our own insurance, you know, we're definitely by the book on that. There was really no change. They just didn't want us there. And a lot of times I can't really blame them. You know, it wasn't really that much money for them. The best partnerships are where when you're on the same page and you have shared incentives. So for example, the National Gym chain we work with, it's a percentage rent and the better we do, the better they do and they're in business just like us. So it's really aligned incentives. And when I'm approaching people, I really look for win win partnerships just because that's going to be what, what carries us for the long haul.

Yeah, it's interesting how the framing of that is completely different if you're doing a percentage rent. Because if, if you go to this National Gym chain and it's just over kids, the GM is like, nice, okay, okay, then more money for me. Right. Whereas any other, like any other setup it's like, oh, these stupid kids, get them out of here. Right.

And we work. I mean this is still Florida. So there are, there is a large senior community and a lot of times they get used to their specific time swimming. They don't love kids being around when they're trying to exercise. And I get it, it's definitely getting younger in my area. But we still have a little bit of a ways to go.

Okay, so let's talk about that location that you open and then we're forced to close. 20 minutes south, I think you said of Sarasota. How do you do that? How do you find 85 customers in a month? Is that just Facebook ads or something more creative?

Mainly Facebook ads. I mean, as far as client acquisition, the way I look at it, I mean you're always counting on referrals and reviews in this type of business as far as like word of mouth. But I mean from a digital marketing perspective, AdWords is the base that's always running because the intense hire people are actively looking for the service. Facebook ads is a good shot in the arm when you really need to build a list or expand quickly. So because I've done this so many times, I'm really good now at a grand opening special as far as like getting building interest. But I mean, the interest has to be there too. I mean, as good as I can be on Facebook ads. This really spoke to the pent up demand that was in the area because there were a lot of people with children that could not get swim lessons or they had to drive, you know, 30, 40 minutes to us or somebody else south just to get their kid to learn how to swim. So my how I do it as far as acquisition, I really try to, when there's something to talk about, when there's something new, I really try to hit the Facebook and Instagram ads up and then use that to get my base. And then obviously the product needs to speak for itself. No matter how good you are at advertising, you need to do a good job. And then with our industry, it's kind of easier, I think, than a lot of industries where we don't really need to sell. Every parent knows their child needs to learn how to swim. We need to prove that we're capable of allowing them to achieve that goal. And we're a competent provider and we kind of do things backwards. Most of the larger swim schools put the focus in their facility from day one. We've put the focus on our instructors. We've done whatever it takes to pay them double and triple what they can make at a regular franchise swim school. That being said, our facilities are definitely not as nice, but we really speak to the quality of the product and our clientele. They're there for the quality for the most part versus, you know, the facility or any sort of bells. So we make any water work, but once they're in that water, our instructors are Very professional. They do a great job and they're the best in the area.

Okay, so I want to get back to the instructors in a minute, but I'm curious if you mentioned Google Ads. And we have a lot of success with Google Ads as well. Because usually, you know, it's kind of like Facebook ads are a lot more impulsive, like, ah, you know what, I should get my kids in swim lesson. Okay. But Google Ads, it's like they're ready to pay right now for that service a hundred percent. Do you ever let Google Ads competitiveness in a market dictate going to that market or not? Like, geez, nobody is bidding on these keywords in Clearwater, like we need to open in Clearwater or does not. Does that not play into your decision making at all?

No, that's a really good question. I've gotten to the point where I've opened in so many locations where I can tell you if a location is going to be successful based on the demographics and the pool. And the problem with our model is we are limited by the pool, so we have to go where the pools are. And I know that, you know, in our pre conversations we've talked about different methodologies and opportunities and I definitely have a big one that I'm interested in pursuing that will allow us to go different places in a cost effective way. But as of now, when we look for these partners, we're kind of limited by where they are. We're limited where the gyms are. The gyms that will work with us. A lot of gyms don't want swim schools, so I think that's a good idea. But we're so hard up for the spaces we can go in spaces that are actually appropriate for where we want to conduct business and how we can conduct business, that hasn't been an issue yet.

So I guess that is the genius of having a partnership with a gym chain is if you've got three markets and you know that the gym in all three of those markets exists and is willing for you to go there, then you might start looking at the Google Ads keyword competitiveness and say, all right, let's go here first, because I think we'll have the easiest shot at succeeding here.

Totally, 100%.

Okay. So one of the things that I mentioned in my tweet and it was interesting because a lot of people commented and they're like, yeah, what the heck? My daughter was a swim instructor and she made $14 an hour. But now that I do the math, her Boss was making $350 an hour? Yep. Does that play into your calculus where it's like. Like I can afford to pay someone $70 an hour because she's going to be teaching three people that are each paying me $60 an hour. You know what I'm saying? Is that kind of part of your math?

Yeah. Yes and no. I mean, I think from day one, we looked at what the industry standard was, and we were appalled by it, and we wanted to do whatever we could to pay, you know, as much as we could up front. And then we backed into our numbers based on overhead from that, and we do a lot of things different. So basically, I'll just tell you from day one, I mean, we're six years old now. We've started at 25 an hour from day one, which sounded a lot better back then than it does now. We have instructors making close to $40 an hour, and we're happy to do that if they can prove they get results. And the way we do that is overhead. What people don't understand is the Boss isn't necessarily making 350 an hour in that situation because of what they have to spend with overhead. The great.

Sure.

The great thing about our model is that we control our costs and we still have great margins while paying our people and our instructors very well. There's definitely different ways you can go about it, and I think it speaks to what you are actually selling. I mean, I think it speaks to the. The model and how you're operating. What is your product? So, for example, everyone does group swim lessons. The standard group swim lesson in, like, a franchise swim school would be four to one. We start three to one with our first three levels for a beginner. And I think there's a huge difference in that as far as quality. But we also offer private lessons. We do about 35% private lessons, which is very rare for a swim school of our size. But my thought on it is that kids learn differently. And I think one of the things that you spoke to that was very. I kind of wanted to be triggered by your post, but at the same time, I'm like, yeah, he's got some points there, you know, so. So, like, when you're incentivized, a lot of these schools are incentivized for the kids not to learn how to swim. That's not okay with me. I mean, we need to get these kids swimming as quickly as possible, but then it's up to us to sell them on activity. And that was one of the one things I want one of the things I wanted to address about your commenters, it's really not a binary system of like swim or no swim, it's the process to get them swimming, which obviously we want to happen as quickly as possible. But then it does become an activity and it becomes a skill that people want to take to the next level and they want to learn stroke. So it's not just a matter of if your child can swim. A lot of people come to us wanting their child to swim, but then they're with us three years because the child keeps progressing and then eventually joins a swim team. So it's like gymnastics. Just because your child can do a somersault, that doesn't mean they know gymnastics. They want to do the next skill. So with that, my, my philosophy has always been that we need to do what's best for the child. And some kids learn better in a group watching other kids perform the skill. Other people do better in a private lesson, but they get one on one attention. I've this actually really opened my eyes to the value of a group because I was always from the competitive world. I was a one on one guy. I always thought the private lesson was the best bang for your buck. But there's a lot of kids, especially kind of fearful kids that might be afraid of the water that do better in a group watching them perform the skill. So my take on it is we have to do what's best for the child and what's best for the client, and the rest takes care of itself. Are we losing clients a couple months prior to your franchise swim school? Maybe. But in my business, the way I look at it doesn't matter because that will come back tenfold on word of mouth.

It's kind of like the unethical way to do this would be what I insinuated in my tweet. And that's like, just keep them coming back. Like, just keep them coming back no matter what. And the ethical way to do this is like, teach them to really find a deep love for swimming, want to progress, and they want to learn this. And maybe you start timing them and it's like, hey, how about you do a lap in 10 seconds now? Yeah. Is that kind of what you're saying?

Totally. And that's been our philosophy from day one when we speak to clients on the phone is we want to instill a love of the water. And because when a child wants to come back, they will take it farther than if they're being forced to come back or just going through the motion. So That's a really core part of our curriculum, is really trying to instill that love in the water. Love of the water. When we started, it was basically just us in the local YMCA and we got a flood of clients. But since then, pretty soon after, actually, we have had two franchise swim schools come into our market. And I have no issue with competition, but I'd rather they not be there. I'd rather have no competition than have the competition.

Yeah.

Of course, the end result is it's done nothing but help our business because it's served as a point of comparison. So people. We. We will get people that will spend six months as a competitor and then come to us. So it's really allowed in our market there to be comparison, which I think is a good thing. I mean, especially if you're on top as far as quality. So it's been really interesting to watch that process because I had no experience with that side of the business and how they run things. Nobody really taught us how to run a swim school. We've kind of had to figure it out on our own, and we've just had our own values based on our background. So it's been really interesting to watch the competitors come in. And there's definitely. You know, obviously they wouldn't exist if they weren't doing a good job and making money, but I think they've had some challenges in this market versus a more urban market. For example, one of the competitors, they tried to poach one of my employees to be their assistant GM a couple years ago. And I know for a fact they weren't profitable after two and a half years. Going into that third year, they. And part of speaking to the model, they needed 700 kids a week to break even. Whereas we're essentially profitable from day one from, you know, using a smaller model. Whereas if we get a location up to 200 kids, that's great, but we're making a good amount of money off that. Whereas they need 700 kids a week to keep the lights on. I mean, that's not even. That's before the owners actually pay themselves. I'm rambling here. That's how it kind of all fits in with the nuances of the industry.

Yeah, I'm thinking, like, if you sign up with a gym that says, we're gonna. And I'm making this number up, we're gonna take 30% of your revenue. And then day one completely fails. You have one private lesson paying 50 bucks an hour. You're paying your instructor 25 bucks an hour. You're literally profitable, right? Not big numbers, but profitable. You didn't have to spend a million bucks building out a pool in a shopping center.

And to be fair, there is a floor in the agreement. So they're making money no matter what. So it's kind of on us to get above that hump. Okay, so we have to pay them a few thousand a month no matter what. But I mean that's fair. I mean it's on us. And we should, I mean we should be able to get the 75 kids we need to break even. I mean that's on us. If you can't do that, then you know, you're probably in the wrong business.

So tell me about like the unit economics of your business. How many locations are you at as much as you're willing to share? Like what is your revenue? Like what do you expect your EBITDA to be like per location after being open a year? Like let's talk about that.

Totally. I mean Collectively we have five locations. We are a seven figure swim school. Margins vary between 30 and 35%. The way we do it, if comparing that somebody with our model, that would be a franchise. There is a franchise that uses our model of use it. I mean, I mean, I guess we use their model. They were around first, but they use the same model of hosted facilities. They're about 25%, 20 to 25% margins. And that's because of the royalty fee. So it's essentially the same business. When you're building a swim school, for the most part, 20% is the goal. If you can get up to 25% margins on a built facility, you'll definitely have private equity calling and looking to be acquired. That's a really good number. We are a seven figure swim school. Like I said, we have five locations.

We shoot.

I mean 200 kids of L location is great for us. The actual EBITDA per location varies widely because of the lease deal. So for example, some of the gyms I have, it is a percentage rent. So we can never really, I mean the downside is we can never really get away from that as far as the better we do. I mean I look pain in rent last month just on the gems and it was like, it was like when you pay a lot in taxes, it's like, oh crap, I'm paying a lot of taxes. But then you have the luxury of paying that much in taxes. Like, oh, I actually made the money to pay that. So we have two gems that have that percentage deal. We have a gym that's a flat rate, which has been a great location for us. We actually refurbish an old pool about five years ago. It's an outdoor pool. So we had to do all new mechanicals, new filtration, things like that. We spent, you know, over six figures in that, and we have a base rent on that. So when we get a. But we pay. I'll just tell you, we pay $1,500 a month in rent. We pay, you know, 900 to a thousand in utilities. We do all the chlorine. I mean, looking at it, we're probably about 3,000 to 3, 500amonth all in. So that's the incentive. Right. If we can really blow up that location, all that profit's ours. Our fifth location is super interesting. And this kind of just speaks to my wife and I. As entrepreneurs. We're constantly looking for opportunities. So we really would like to build eventually because we think we have the model to do it and do it profitably. But construction cost, interest rates, real estate, it's all just super high right now across the country, but particularly in our neck of the woods. So we looked for buildings with existing pools. We were able to find a building that's actually a residential house with an indoor pool. Founded about two years ago, it was on the market. Long story short, it came back on the market, we got it into contact and, you know, we wanted to make sure we could run a business out of it. Florida actually passed a law during COVID that nobody can prevent you from running a home based business provided you meet certain criteria. So what we were able to do, one of those criteria is the people that work there have to live there. So we're actually leasing it to our instructors. They are teaching lessons out of this facility and we can bring in up to three additional employees. So it's a super boutique location, indoor pool tied to a residential property. And it's become a great location for us. So that's a little bit different because we actually own the property. So it's not as profitable as a standalone facility, but we are paying down the mortgage over 30 years, which is a huge win for us. So, yeah, our kind of appreciation can make any sort of water. Yeah, we just need to pool.

Yeah. What about like, I mean, because you're in Sarasota, is there like a bay or like an something outdoor that you could use, like in the ocean? Not like the. You know what I'm saying, right?

Yeah, yeah, no, no, we've thought about that. Two issues. One is insurance. Nobody will insure you for that. Insurance has become very difficult in our industry. A lot of big carriers are dropping swim schools for liability reasons. And two, even our outdoor pool isn't really ideal because of weather in the summer. And this was something coming from California. I never really had that perspective because we would see lightning like once every three years in the summer. In Florida, you have the risk of lightning literally every day. So our indoor pools, that doesn't affect us. We can keep going. Outdoor pool, obviously you have to clear. So we're transitioning where we're not really looking for more outdoor pools or outside exposure. I think if you were in like San Diego, I would totally do an outdoor pool because I think you get in for much cheaper and you could do things to make it warm with the ambient temperature and obviously you can heat the water. But in Florida it's just tough. It's a lot of stress. I don't regret a thing about how we built it up, but it's definitely taken a couple years off my life monitoring weather and shifting things around.

Yeah. Okay, so let's say this. What if you were young entrepreneur, you'd like to swim, you swam in high school, you want to start a business, you live in Phoenix, Arizona and you want to do a model like this. What would you advise them to do? Like knowing everything that you know now, could you use something like swimpli to find someone's pool?

Yeah, I mean swimpli would be a great model if you could get the person to agree to it and you had the proper insurance. But that's the thing about our industry is anybody can enter, especially in Arizona, California, Texas, Florida. A lot of the franchises have struggled in Florida for two reasons. One being anybody can teach some lessons. So the model client, a lot of clients actually prefer you going to them. I mean, we'll really all would. And we were in that business for a while and we still do it, but we purposely like really inflate the rate just to make it worth our time. Because the problem with that model from somebody like me is you're hiring instructors and instructors driving 30 minutes to do a 30 minute lesson and then vice versa. So you're getting four hours of lessons in and an eight hour day. Conversely, if you're an independent person, like if you're somebody who loves swimming, I would absolutely do that model. And you could make a great living doing that. You can make a hundred thousand dollars a year, probably working nine months out of the year going to backyard pools or having people come to your pool. If you want to Scale it, then that presents a whole new set of challenges. And that's where somebody like me would be now. And the next step for somebody like me would be to take to graduate and if it was financially feasible to build. But I would say if I was a young entrepreneur, I would absolutely start with mobile lessons. There are websites that serve as platforms. They do take a significant fee, but I think if you can just market yourself, you'll get plenty of clients. And that's the thing too. We talked about kind of the, the downside of the industry. If you were somebody like you're talking about or even somebody like me, I would set up right next to a franchise swim school and offer private lessons because that's your differentiator right there. If they're doing 4 to 1, 5 to 1, 6 to 1 in a group, you can charge a premium for that one on one attention. And it's. It may not necessarily be something that scales and you can't do it in every market just because of weather and lack of access to pools. But I think if you're in Arizona like you referenced or any of the states we mentioned, you could absolutely create a very solid business just going to people's houses and then you could figure out where you want to take it from there.

Yeah. So I live in northeast suburbs of dfw and have you ever heard of Emler Swim School? They're kind of a big name here.

Yeah.

And then so there's one in Allen somewhat nearby to me. And then one just opened like three minutes down the road. Big Blue Swim School, you heard of them?

Oh yeah. There's a franchise war with private equity and Dallas is actually one of the hottest markets in the country as far as saturation. There seems to be a lot of swim schools to me. I don't know how they're all doing. Imler's incredibly sharp. They acquired, the CEO acquired that when they had about 12 locations. So the original founder of Imler did a great job, got a great price on it probably eight, nine years ago now. And they are private equity backed and they're off of the races. So all those people that you're talking about, the biggest blues, the Emers, the safe splashes, they are really trying to. They're calling everybody, they're calling owners like me. They're really trying to build their portfolio. And Embler's, they're doing a great job. It's obviously a different model than what I'm doing, but they're playing the game well.

Yeah, Emler opened in this Like a strip mall down the road. And then Big Blue, they opened in this. It was an abandoned kind of a big box warehouse. It's the same place that it becomes a spirit. Halloween every October.

Exactly.

So there's like a Target around the corner, but it's just. You could just tell it's one of those strip malls that's overbuilt. We were talking about this before this recording, but I went and looked at the franchise disclosure documents of what it costs to build one of these things. And I can't imagine what it would like, what, mid six figures to add a pool inside, like an old Kohl's or something like. That's a lot of money.

Big Blue came on pretty aggressively about three or four years ago. And they released a statement back when we were like a year in. And I was freaking out because they seemed like they were going to take over the world. But they're probably the most expensive model because I believe their model is two pools. And their whole thing is if you have a family of three or four, like all the kids could do the lessons at the same time. And with that you need X amount of instructors, X amount of classes offered. So they're about convenience. They build big pools. I mean, I would say an average franchise, it would be anywhere from like. I looked at the franchise disclosure for a smaller one relative to Big Blue, and I think it was 1.3 to 2.6. As far as to build it, Big Blue is going to be even more than that just because they really do a good job with their facilities. But it is a massive undertaking. And that's something even in the industry. I can't wrap my head around that. And I don't think they couldn't have the volume of students in a place like Sarasota to justify that. So I think that it's. They're very. I think Dallas makes sense. I think they're very. They have a lot of locations and I think they're based out of Chicago. I think they have a lot going on in like Virginia, by the D.C. area. So those markets make sense. But when you're that big, you're limited on where you can go, at least in my opinion, as far as to justify the build out. Because I mean, that. That could easily be $5 million build out.

Do you ever use, like, I don't know what it's called, kind of like referral marketing to get new customers, where it's like a parent comes to you and like, hey, I want private lessons. And you're like, well, it's 70 bucks an hour. Ah, I can't afford that. And then you could say, well, if you bring three friends and you're okay with like group lessons within friends, it's 40 bucks an hour. That could be a smart way of just acquiring more customers. Right? Is that just like table stakes for the industry or is that a more unique way of acquiring customers?

Yeah, we haven't really found the software. I've experimented it and dabbled in it. I haven't really found a consistent and effective way to do that. We've done referral bonuses for the most part. People aren't motivated by that from what I've seen. I know the franchises. What they'll do is they'll give away free lessons to influencers. And that's like a very big thing. And we've actually had people come to us after their four month package ran out and they were the influencer, they didn't pay for. Then they start to pay us and their kids actually learn how to swim. So, yeah, that's very common. As far as posting and then generating the reviews, giving lessons away for free, we probably could. There's probably something there. But I mean, as far as the referral mechanism, we haven't really found the software to track it other than referral codes on our website. And we just haven't really needed to. I mean, I think this is the type of thing where people recognize the quality and they know their kids need swim lessons. So it's definitely something. If I could do it in an efficient way, I'd love. I'm always down to test new things and I really think that could be valuable. But we haven't really had the need to do that yet.

Yeah, what about. We were talking earlier about like the ethical and unethical way to keep your customers. Right. What if you had a handful of kids that they've learned how to swim, they're good, their parents said, thank you so much, you're amazing. We're moving on. Could you ever offer like a, like an organized playgroup, like a group swim where it's like, all right, listen, you have been paying X bucks a month, but instead, why don't you just pay this and like every Thursday we'll get together and we'll just have like a pool party, like an organized pool party here. Is that viable?

Let me answer that two ways. One, if you look at the average swim school, they do birthday parties, they do open swim as an additional stream of income to pay for the facility. The way our pool contracts work out we can't do that because we have to be with. They have to be with the instructor. So just based on our model, it's not really applicable.

I meant like with an instructor being. Sorry.

So what we have done is we were sending a lot of kids to the local swim teams. We have two great swim teams in Sarasota. They do a great job. But they were coming from three, four or five kids in their class to 40 kids in a group with one coach. And they would come back and like, what the heck is this? So we actually created a pre competitive swim team. One, because it's a great bridge to the actual swim team. It will prepare them more. Two, from a business side, it holds on the clients longer and they like us, they like our instructors. So we do have that. Like I already said that most of our classes are either 3 to 1 or 4 to 1. We actually have a 12 to 1 group that is a. We call it a pre competitive swim team. It's for kids that want to go to a swim team one day but just want to work on strokes a little more, build up endurance. It's also for kids that have no desire to compete but like swimming. So we've kind of done that in a way. As far as open swim, I haven't really seen a viable model to make that work as financially. I mean, birthday parties can work, but it's kind of this. The hassle that we haven't had to deal with based on our model. But to answer your question, we have done the. The pre competitive swim team is a bridge to an actual swim team.

Okay. Now, I don't know if you're anything like me or not, but anytime I'm running a business, I always see these kind of tangential opportunities. Right. Like let's talk about Google Ads. So like let's say you're not planning on opening in Georgia, but you see, wow, no one is bidding on keywords in Georgia. I could start a Google Ads agency just for swimming companies where I, you know, I charge a percentage of their ad spend. What business ideas or opportunities are you seeing that might be tangential to exactly what you're doing that you think that listeners might be able to take advantage?

Are you familiar with go high level?

Yes. Yep. We're using it right now. Yeah.

Oh yeah. So I use it as well. I've used it for years in my business. I actually have a few swim schools on my white label and I've really introduced texting to them. As far as the lead flow, I've done It based on just referral. I don't really have the time to market that. I think there's a huge opportunity if somebody wanted to focus on that or work with somebody like me to develop the back end because we are a very old industry and just the fact. Oh you mean I can text people? Like I have automations when they like sign up so that kind of blows their mind. So that's the kind of industry we're dealing with and it is a big opportunity. So like I have, I basically give people my intake sequence when somebody you know signs up for more information on our site, you know, they get the email, they get the text and our job is just to start a conversation and then somebody takes it over from there. So I think there is a huge opportunity with something like that. I think there's an opportunity with a short forum agency as far as creating videos, the content that sells itself and there are some people doing a very good job in the space. It's like showing a two year old swimming across the pool or showing the backflow. I think that a lot of owners need help with that. As far as how do I edit this video? I think so any sort of short form agency, any like Definitely AdWords, definitely SEO. I think as far as a package that's very important. I think the hard part in our industry is what people can pay. I think that you have a vast, vastly different level of owner from top to bottom. The higher ones are definitely already in that private equity where they or franchise where they do it in house. There are a few large independents but you do also have people that are just doing it their backyard pool that may not be able to spend a couple thousand dollars a month doing it. So that would be the negative. But I do think there is a market if you can make that affordable and prove the value. I think this is a huge market and really kids activities in general. I think kind of segueing that that's just something the software piece and the agency piece that's something that you know, you sparked in my mind when you just said that. But when we talked beforehand one of the things in my mind where I think the way the future of the industry is going to be spaces with different activities that a parent with three children can bring their child to get their swim lesson, do gymnastics and get tutoring. So I think that the main feedback I get from parents is they're busy, they're shuttling their kids all over around, around town. They want spaces that have multiple uses. So that's where I think the opportunity is for entrepreneurs to create those spaces. Or if you are, let's say you're a gymnastics owner and you have a gymnastics facility or a tutor facility, if you have extra space, being able to offer additional services, putting pools in. And kind of where I think the industry is going and where we're working on is an above ground pool model that you can pop up anywhere. They do exist, but we think we found the supplier because traditionally, let's just say we're, I mean take big blue out of it. I mean they're huge. Take your standard swim school where you're approaching a 5,000 square foot retail strip center. The landlord isn't necessarily going to be thrilled about you digging a hole in their ground. So, so, and a lot of times what they'll do is they'll make you hold 50 to $100,000 in escrow if you ever go, if you ever leave or go bankrupt during your 10 to 15 year lease term, they can fill in the pool because obviously it's going to be difficult to lease that space. We've been working on a smaller model. I don't look at it as like, oh, how do I fit in this 5, 6, 7, 8,000 foot space? I want the smallest model possible with the lowest overhead. And there are a couple swim schools successfully using above ground pools. And that's something that we are working on. When I say build, that's kind of what we're looking at. Taking a 3,000 square foot space. Good signage. Hopefully it's more of like an industrial or office flex type product that is on a main thoroughfare. You get the signage but you also get the high ceilings. Putting an above ground pool in and being the op, being able to operate that way, you still keep your margins high. You can still pay your instructors, you can still take the similar model that we have, but do it in a way where you don't need 700 kids, you can make it off 300 kids and have a great location. So that's what we're looking at right now. I think there's a lot of opportunity converging with like child care, early education, gymnastics, the people that already have the spaces where we just bring in the pool and do a similar model of hey, here's 20% or whatever the percentage works out to be. This is an added value to your clients. If you're an early education provider, you have 200 people at your school, they can now have swim lessons. That serves as our base to cover our cost and we will market, bring additional revenue into your facility and market your facility to expose it more to people. And that's where I think synergistically, I think that people have to get creative because of the costs have risen dramatically in the last few years that the building, as far as building these sub schools have gone down because you have to look at the interest rates on the debt that you're borrowing, the cost of the actual facility, traction costs, it's all at an all time high. So people have to get really creative about how they're going to do this type of business moving forward. And that's kind of where I. The above ground pool model is something that I'm passionate about and that's what we're working on. But I think just going back to where I started, the synergistic approach to youth enrichment, youth activities, I think that's going to be super important as well.

Yeah, man. Okay, Now I'm excited. Like, I love this business because there's so many different levels to it.

Yes. Right.

Like if you're 16 years old, you're. You can go make really good money like walking across your neighborhood to your neighbor's pool and teaching lessons. Or if you're 56 years old and you've got seven figures, you could build out a standalone building and make really good money with more risk. Right. I love the above ground model. It reminds me of I had my call in show and a guy was asking about the flow riders. Have you seen those? Like the surfing things?

Yeah, yeah, yeah.

He was saying, like, I want to start a flow rider business. Like, where should I put it? How much do they cost? And we were just brainstorming and it was like, man, if I were you, I would go to a small town water park because 95% of them don't have flow riders and just put it on some square footage and say, I'm insured, don't worry, you can upsell this at your ticket counter. Like, all right, tickets are $34 for a day. It's $39 if you want access to the flow rider, like piggyback on their traffic. So I'm thinking about your above ground model and it's like, oh, brilliant. Like you could go to a trampoline park that, you know, those kind of had their heyday and they're still around but they're probably not as busy. But say, hey, why don't you just give me this corner and I'll put an above ground pool in there and I'll insure it. You'll insure, like we can have double insurance if you want. And I'm just going to piggyback on your traffic and I'll give you a flat rate per month. Whereas if no one ever comes, not only will I pay you, but I can just pack up a move if this isn't worth the hassle. And I'll give you 25% of all of my ticket sales and you just mention it as an upsell at the counter. Right. And I, I don't know if Trampoline park is the right model. You could do what you just said and just find a strip mall with 3,000 square feet and just. And then if it doesn't work out, you could literally just sell the above ground pool on Facebook. Marketplace.

Totally, totally. And I was this close in St. Petersburg to partnering with a gymnastics owner that had, you know, it was either 20 or 25,000 square foot facility and we had the space picked out. She loved the idea. She had thought about a swim school before, but she had to basically kill a program to get it in. And it was the like youth boys program of 7 to 10 year olds. And she just wasn't ready to do it. And she really liked the idea. We had the space mapped out because I thought, hey, you're already paying for the Lee. I mean, you have a long term lease on the space. You're already paying for the space. It's right here. I can bring in the pool, I'll pay for the pool, I'll take care of the permitting, I'll do all that. This is just added found revenue for you because this program would be, you know, 10 times more profitable than the program you're running. And she loved the idea but just wasn't ready to do it at that point. Which I get it, you know, she served. It's part of the community. You don't want to like limit opportunities in another sport just to make money. So I totally understand. But yes, that's the path I've been taking for. I've really been, you know, looking for those opportunities for like the last 18 months. Insurance is definitely an issue. I've approached whole childcare providers, like a lot of, there's franchise preschools, there's independent preschools. A lot of them are basically a house that wouldn't work. But a lot of them are, you know, two and three acre properties that have a big outdoor play area. So I really think that's going to be the way of the future. I think people need to wrap their heads around it. I don't know if everyone's ready for that. But I also think once we can do a deal and get into one, that really opens up the opportunity further. I've had conversations with several investors and private equity groups that invest in child care facilities and it's definitely being kicked around because if you can get into one of those, you can get into 40 of them as far as their location. So there's definitely some meat on that bone. I think it's going to take the right owner and the right team to put that together, but I think there's a lot of opportunity. Great part about the above ground pool too is it turns into a. There's tax benefits because it turns into an asset. It's a piece of equipment versus digging in the ground that changes the value of your real estate tax assessment versus an actual piece of equipment that you can now depreciate. So there's a lot of. There's just, there's multiple benefits to this model and like you said, if it ever goes bad, you just take your pool and leave.

Yeah, I tweeted like a year, I don't know, eight months ago about youth sports training facilities. Did you ever see that by chance?

I didn't see the tweet.

Yeah, I live in kind of a rural area, but like there is massive demand for places for 16 year olds to go to like throw a baseball or to throw a football with a personal trainer. There's. Because the gyms don't know what to do with these guys. No one knows, no one wants to mess with them. And so I actually have a building in my backyard that's air conditioned. And I. My tweet was basically like, should I open a youth sports training facility? Because one of my friends approached me who's. Who does like travel, baseball and he's like, I promise you would be sold out before you opened. There's so much demand. And everyone was like, yes, yes, yes. That's in my area too. My area too. I could totally see you piggybacking on that. Right. And just saying, give me a corner of this. Parents are already coming here to drop their kids off for baseball, softball, soccer, basketball, like literally wrestling, like all the sports train in these facilities. I think there's an opportunity there. I want to read you a tweet that I forgot about until five minutes ago. I tweeted this back in January. I want you to tell me if there's something viable here. I won't read the whole thing. I'll just summarize it. But I said if I were 22 years old, again, I'd move to Scottsdale, rent a house with a nice pool net, ten grand a month. Here's. How did you know you can rent pools by the hour on swimpli and Pierce Base during the summer? Nice. And I did all the research. Right, I did all the research. Nice pools can rent for 300 an hour and the ones that allow parties are booked solid all day, every day, yada yada yada. The weekends get 70% of the bookings, conservative, 200 per hour, yada yada yada. Anyway, I just kind of went down the line, like you could sell them food, you could rent, rent towels, and you'd of course have to get the landlord to agree to that, which is like hard but not unheard of because landlords agree to have someone else Airbnb their house out. This isn't much different. Do you see an opportunity for something like that as well?

Yeah, I think, I think there's something there. I mean, we've looked into swim a little bit and I thought that could be. We've. We just wanted to run it as a bigger scale. So I don't think a backyard pool would really work for what we're doing, but I think there's definitely something there if you rent the house. So take advantage of the weekends. When you can get your highest cost per hour, you cut out a little bit. But I believe you said the weekends were the most popular, is that right? So then, I mean, if that's the case, you can run swim school during the week. It could be a multi use facility and a lot of, you know, hoas or what you. I've learned in Florida, we luckily have that law that allows you to run a home based business. It's not like that everywhere. But you really have to watch out for HOAs too. Even in Florida. Most of our communities are HOA. I live in an HOA community, so you can't do it there. But yeah, I think if you could find something that wasn't governed or didn't restrict you in any way, I think there's a huge market for even. Honestly, our biggest days are Saturday and Sunday morning. You can even run a swim school 8 to 11 or 8 to noon and then rent out after that because I don't know how many people want to rent the pool in the morning. I think there's. I think that's a viable idea.

You could do midnight pool parties, right? Like, yeah, the wild crowd. I was hoping you could hear that and level it up. And I think that's exactly what you Did. Because I think you're always going to be fighting gravity to get pool parties there on a Wednesday morning. Right. But if you were to just teach swim lessons Monday through Friday, maybe Saturday morning, and then rent it out for three to 400 an hour, which is fine. If there's 12 people there and they're all venmoing each other, and then you don't even own the house, that could be a really good model.

No, I think it's a great model. You're giving me some ideas. Because we've looked at that. I mean, if we. If for whatever reason, we can't build in the timeline we want to do. I mean, there's markets I want to be in on the west coast of Florida. I mean, we might look at a similar model just because we know the laws now. We've got to verify by lawyers. We've spoken to counties, so we know what we can and can't do. But that's definitely been on my radar. If we do need to rent a house, don't need to. Don't need to buy it. You can rent it. Just make sure you get the landlord approval. I mean, that might be a viable option for us. Not necessarily with the pool parties, but with the kids swimming. Because eventually, like I said, I mean, we can make any form of water work. It's just a matter of what the scale is. And there's going to be headaches and challenges either way, but we know how to overcome that. And a backyard swim school is probably one of the best models there are. There is. As far as, like, overhead and. And simplicity.

Yeah. And I also like the backyard model because I think it. Parents go into it with the bias. I mean, this is how my kids learned. Like, so my kids, we have a ton of friends with pools, and they were like, hey, we've got this girl teaching swim lessons, and your kids want to come over and just venmo me 50 bucks. Like, that's how our kids learned. And it was great. Anyway, I like this business a lot. So if people want to find you online, Josh, where can they find you?

Yeah, so the company swim srq.com on x. I am swim school guy. I'm really enjoying my time on X. I never really got into this to be an influencer, to have a following. I just really found it probably like six to eight months ago. And I really enjoyed the small business community talk. I really enjoyed learning from people like you. And I was kind of a lurker. And I just post when I think I can add Value. But I'm really enjoying the community and this was a cool opportunity just to be able to speak with somebody like you and really respect what you're doing. And I really love the community that is on X. So that's probably the best way to, to connect with me.

Yeah. And I would think that if you keep building your brand, like you could start selling kind of like licensing packages of your exact model to other parts of the country.

Totally. You know, and I'm looking for partners mainly with like spaces. If there was somebody that owned a gymnastics facility or somebody that wanted to do this, I don't think I would go to franchise franchising route. But I like that you said licensing because I do think that there's a lot where I could do to.

Yeah, basically.

But have it be yours. And I'm happy to partner in anything like that. It's. It's funny, I mean, I'm nowhere at your level on X. I think I just cracked 400 followers. I'm not really trying to be. Have a bunch of followers, but I've already been approached by, you know, several private equity firms, had great conversations. So it's just really interesting, the power of the network when you can, you know, in somebody like my case, where I'm very niche. Right. I don't think there's too many swim school guys running around out there. So like when people, you know, I've talked to people that are making investment in, in peripheral spaces like childcare, gymnastics, things like that, it's just been great conversations to have. Have you worked in the private equity space or have you done a lot with private equity before? Because I. It's all new to me and I'm finding it very fascinating.

Not a lot, no.

Yeah, yeah. A lot of people love the concept and they love me as an operator, but I find the ironic thing with private equity is they want you to be 1 to 2 million dollars EBITDA before they make an investment. And in my mind the reason I would sell right now is to be able to actually build something to then sell again in five years once we really grow it. And if I get to a million to $2 million EBITDA, I doubt that I would want to be part of private equity. So that's kind of the ironic thing that I'm finding right now where they seem to need operators more than anything, but they have very specific criteria about entering the space and I think anybody on the outside right now is going to have a very difficult time getting in the swim school space right now. Because there are three major players that have the relationships to then, you know, build on that. That's been something very new to me over the last year, and it's been very fascinating to see how they approach deals. I think they're very intelligent people, and I've really enjoyed the conversations, but it's very new to me from my background.

Yeah, same. So if anyone's listening to this in western Central Florida, Sarasota, and you've got a pool, or you know of a pool, or if you know of a venue, reach out to Josh. I remembered what. When my mind went blank, I remember what I was going to say when we were talking about having, like, the swimply renting out a house. It would be really smart on day one, when you rent out that house to sign an option to buy it at a certain price. Like, you could even say, hey, listen, I don't know how this business is going to go. I'm going to pay more than market price for rent because you are taking a risk with me. But I would love for the option to buy your house at. Call it 10% above appraised value. Because, I mean, think about if it's a $500,000 house, but you have a business that's pumping out 300 grand of EBITDA from that house a year, it's worth a lot more than 500 grand to you. To the owner, it's still worth 500 grand.

And that's the situation we found ourselves in when we bought a house with that indoor pool. Because we knew, who wants an indoor pool in Florida? I'm literally the only person would want that in Florida. And very interesting. Like, this is gold to me, but I'm not gonna. They didn't really know anything about us because we told our agent. I'm like, don't say we own a swimsuit. Like, don't make a big deal about the pool. So we got it for, you know, retail, maybe a little less, but they didn't know how valuable that actually was to us.

Yeah, you need to have, like, Zillow alert set up for indoor pool just to see if anything pops up on the market. We.

The amount of time that I've spent on Zillow, LoopNet, Crexi, Redfin, all of those. Just. We've found some very interesting properties. And I mean, but you can see why when you go to the cost of actually building one of these facilities, if we can find something with a pool that already exists, I mean, that's like gold to us. So we spend a lot of time on the listing sites for sure.

Well, Josh, this was fun.

Yeah, thanks for having me.

I appreciate you sharing all your ideas and sharing your numbers and. Yeah, thanks for the time.

Absolutely. Absolutely. Thank you for having me.

Okay. Hope you enjoyed that. Please like and subscribe and share with your friends and we will do more podcasts here soon. Love you.

Bye.