Owning A Private Swim Club by Ingrid Daland (1994)        


Published


Ingrid Daland is a former National team member from Germany. Size is a past American Record Holder in the 100 meter breaststroke. Attending the U.S. Nationals in 1962 resulted in her 30 year marriage to the current ASCA President, Peter Daland. For over  30 years, Ingrid has been teaching swimming ill private pools, country clubs, and now in their own facility. Most of those years teaching were part time to supplement your coaching salary. Her coaching years started as the age group assistant at the Los Angeles Athletic Club. Size was then the head coach for two teams which she founded. After winning the respective regional championships, and wanting to reach higher goals, she became head coach for Simi Aquatics  in 1980. In her second year size had 13 rookies who qualified for Junior Nationals. Until she stopped coaching in 1987, she had at least one different Junior National Champion at each NO Championship meet. After winning the Junior Nationals team title and having developed and coached a Senior National Champion, it was time to devote herself to a newly acquired swim school. Now Ingrid is coaching high school only, and devoting all her time to running a swim school with two pools and over 30 employees during peak season.

 

All of us at one point in our careers had dreams of being our own boss  and  being  financially  independent.  Most of us have a mental plan of how our future career path  will wind uphill through our lives.  To some  of  us it seems that we have reached dead ends, and  our  jobs  have seen more downs than ups. Since most of our coaches are at the mercy of parent’s organization, which very often are not responsible decision makers, the fear of losing our job keeps us from saying things that should be said and from doing things that should be done. Our lives are in the hand of parents equipped with blinders who are often ignorant and almost never can look past their own child. They literally can cause the destruction  of a coach and his work, and  of course  the salaries  that go along with most coaching jobs are pathetically low. But lucky for all the swimmers we stick with it, because we love what we are doing.

I am assuming that we all know that our product is the main ingredient. Teaching people how to swim, how to enjoy the water, and convincing the general population that aquatic activities are a way of life. You have to believe in your methods, being  SwimAmerica,  Red Cross your own acquired way, whether you  believe  group lessons, private lessons, therapy classes, exercise classes or teams, are your priority, is not the discussion here. What you are selling needs to be your decision, though I urge you to inquire around and be open-minded!

If you have a business degree, knowledge in bookkeep­ ing, financing, etc., you are already ahead of many of us. Maybe you should take a course in entrepreneurship. There are many ways to acquire the business back­ ground knowledge you need. Certainly experience, working for someone else in the same field is a good base to build on.

 

I, for one, have never taken a business course, hated economics, I loathe math, don’t know a thing about book­ keeping. I tell you, if I can go into business for myself anybody can!

 

If course, there are a few key ingredients you must have to get started. I find three components very important: Desire, Opportunity,  and Financing.

 

Desire: The drive, the willingness to work long hours often under sacrifice of personal and social obligations. Desire is also the belief  in  yourself.  Hopefully,  you have a person that supports you. It will be hard enough  by yourself and impossible against the wishes of  a spouse.

 

Opportunity: Opportunity appears differently  to different people. First of all, you need to have time for  research. If a place ready build to operate is offered for sale, this is certainly an opportunity. So is the perfect lot in the perfect neighborhood, ready to  build. Opportunities are also having an interested partner or friend to motivate and advise you.  There also  needs  to be opportune time in your life to take on a new    business venture  and  then sometimes  there are financial opportunities that present themselves.

 

Financing:  This is definitely one of the key ingredients.

  • Financing could be achieved by finding a financial backer or getting a construction or Small Business Administration (SBA) loan or starting out small and build on while doing your own financing or you could simply win the

 

1 really cannot see how you can accomplish much with just two components: Desire with opportunity, but no money? Money and opportunity  with no desire? You be the judge!

 

O.K. You have the desire, so you look for an opportunity. If you are looking only to supplement your coaching salary, you probably don’t want to own your own facilities, but there are numerous people out there that are very successful doing just that.

 

Do you have a pool in your backyard?  Teaching lessons  in your home that could be owning your own business.”  Run it like a business.  Check  on  zoning.  You   are probably illegal in most parts, but if your neighbors don’t mine go ahead. Check into rebuilding your back­ yard entrance so your privacy will not be invaded, possibly construct an outside entrance to a bathroom.. Maybe install  a  portable  changing  room.    Set  strict operating hours, have customer contracts and lay down the rules: otherwise your projected $80 per hour will be whittled down to $5 with all the no-shows, make-ups, telephone calls or just being sociable with the customers. Get liability insurance and keep good records. Pay your taxes.

 

You can also go from home to home or teach in some­one else’s home. There are many different ways of utilizing private pools. It will be a little harder to have many assistants or keeping them (Because what keeps them from doing what  you  are doing.) Your income will be directly related to how many students you teach!

 

You can also rent a facility. These possibilities are end­less. There are country clubs, tennis clubs, health clubs, homeowners associations pools, scuba diving shops have pools, hotels and motels, private academic schools need to generate income from their pools, a municipal facility without a Park and Recreation Department, look around.

 

Some pools you probably won’t be able to rent. Municipal pools run their own programs which are generally not geared to really learn how to swim well, but to serve a large part of a not too interested public at a reasonable price. As far as all the other pools, make an offer!

 

Find out what the operating cost would be. This depends on size of course, indoor or outdoor, type of equipment, bather load to name just a few.

 

Take into consideration, membership or homeowner use and see how many hours you can free for your purpose, sharing lanes might be a possibility. You need to do your homework!

 

A good manager will listen even if they have an existing program. Maybe you can offer something they need or you can do something better than what they have.  Guard against becoming an employee. Stay in control. Establish a check list and find out about each different situation.  For example:

 

  1. Available hours and space ls there enough time for me to generate enough business?  Can I teach evenings?  ls there enough space to possibly hire a helper? Water temperature who controls it?, etc.  etc.
  2. Financial liabilities Besides agreed rental fees, what else is hidden? Can I set lesson and pay fees as I see fit?
  3. Insurance Do I need my own?
  4. Repairs and maintenance: Who is responsible. Can you schedule maintenance around your operation or do they want to vacuum until 10 m.?  Is  the  water  and deck clean?
  5. General operating responsibilities What specific rules apply for each facility?
  6. Employees Can you hire employees? If yes, they need to be on your payroll, your insurance. You need to do all the monthly, quarterly, and yearly tax deposits and forms that are needed. The IRS has very stringent guidelines, as to when you are an employee and when you are an independent contractor! You need to know
  7. Overall control In most cases this set up will  turn into a situation of an employee in charge of aquatics, not your own business. You are truly only  independent,  if you lease the whole facility, and are responsible for everything in exchange for paying a fixed monthly fee or a percentage  of the

 

If you lease a pool, have a lawyer check your contract. In an “as is” contract, you are responsible for repairs, etc. Make sure that additions belong to you. The new pool heater you put in, because there was none, is yours when you leave. If the owner wants to take the lease back, the added equipment shack or the pool reel and covers that you purchased will go with you when you go.


 

This will make it harder for the owner to take over again when he sees how much income you generate. A new percentage may be a good financial arrangement: “When I do well, you do well!”

 

When leasing, you are truly not your own boss, because if your lease expires and the owner decides to put an office building where the pool is now, you are out of business. In our case, you couldn’t just rent another  store front! You do need a pool.  Of course, if you have a portable pool, you could take it with you and rebuild somewhere else.

 

Rita Curtis, a former National Champion and a Southern Californian pioneer in owning and operating a number of swim schools in the  1950’s  and 1960’s, once  said  to my husband, “Lease Never own water!”

 

That is definitely a statement to think about. Check with people you know who do one or the other. Get their input.

 

I personally know of several very good  lease situations, but also of some gone sour which have really hurt the operators involved. Even  the  most  stable  health  club, the richest sugar daddy, can change their mind or worse yet, go under.

 

When you own your own place, yes, you are independent but you are stuck! The buck stops with you. If an employee goofs, it is your responsibility. If the equipment breaks down, it is at your expense! If the neighborhood goes down, so do you. Know yourself. Are you willing to take chances. I am a very cautious per­ son, though I tend to be impulsive. I don’t stick a nickel in a slot machine or even buy a lottery ticket, but I will gamble in order to explore, to improve, and to find a new challenge. With my business, I am not a risk taker. I’d flunk every entrepreneur aptitude test, but here I am against all odds.

 

As far as the previous ideas about self-employment, I have been there done that! I did it all: I have done the backyard teaching in a home pool; Teaching/coaching in homeowners pools, country club pools, the Los Angeles Athletic club; worked as a team coach responsible to a parents group; I was aquatics director in a country club setting; I also owned and coached my own team in a leased facility and now I am owning and operating my own facility.

 

Now the only  thing left for me, is to build  the   perfect facility to my own specification based on the experiences I have gathered.

 

One of the great opportunities, of course, would be to buy an existing facility, but the cost may be prohibitive. So check into just buying the business and leasing the facility. You don’t need so much startup capital, and you generate income immediately. Work out a possibility to buy the property at a later date.

 

In my case, I bought an existing swim school that had been there for years, even been for sale  for years,  and was totally run down. There was no business left. Two weeks before foreclosure, at the spur of the moment, I decided I wanted  to  make a go of it.  I knew I could do  it.  But how do I go about  it?

 

I needed money. Well, we are both coaches with three school children, no cash flow, and no real assets.  Where do we find the money? We refinanced our house and  used  the equity  for  the down-payment.  I sat down  and  made a business plan, which I should have really done first. Mind you, I was absolutely  clueless.

 

I made a one year projection with an outline of programs generating income and calculating expenses. Then I made a  five year plan.

 

I talked to a number of people to obtain information. Here are a few clichés I had to listen to:

  1. In order to make money, you have to invest money. Sure that is true, more or less. It  does  not  mean  the more money  you invest the more you’ll
  2. Time is money, yes, but don’t forget to value your time. Coaches are generally so  free giving of their

 

  1. It is better to use other people’s money, if you can  get it.
  1. Money isn’t everything, but an awful lot depends on it, and so on and so on, half-truths, all of

 

I assume that none of you are in a financial position to go out and either build or buy a pool on a cash basis, but don’t let that distress you. There are ways. Just like you needed to find out about yourself, in which aspect of swimming you really want to work, you need to find out how you can live with yourself as far as financial matters go:

 

A.     Can you sleep at night having large mortgage payments?

  1. Do you take chances
  2. Are you meticulous about financial affairs,  record keeping, etc.


 

It is best, of course, if you have a spouse/a friend as a helper or at least as a sounding board.

 

Solid inquiries should be made at the:

Chamber of Commerce There are groups of retired business people willing to offer their help. Attend meetings. Ask. Ask.

Bank Officers Get to know the banker you are dealing with. Ask.  Ask.  My suggestion  to you is, talk  to your banker and find out what information they need to process a loan application. You can write to American Bankers Association, Steps to Small Business Financing for further information.

Friends you value Sort out valuable advice. Think in terms of dollars. If  your friend’s dollars  were at stake, would he give you the same advice?

Specialists I had never run a pool, just the programs in it, so I talked to a local pool man. He was kind enough to come and look at  the equipment. He gave me an idea how much to estimate into my project.

 

After being turned down by two different banks, one banker at a third local bank believed in my plans, my ideas and most of all me.

 

He trusted his instincts, that even without a track record, having no assets, no business education, ·an I had was a husband with a steady job. I wanted to keep it simple. I didn’t need a line of credit, because we did not need to support our household from this venture, so all I got was a real estate loan.

 

Pools are considered a one use property. Banks do not want to loan money for ventures like ours. If they get stuck with a pool repossession, they can’t do much with it, so they are taking a big risk and as we are finding out everywhere swimming pools and swimming schools don’t fit into any category. There are no statistics to go back to, so most loan officers are very cautious.

 

You could get a real estate loan for the lot. Maybe get a separate Joan for improvements, which is being handled differently. The bank will pay vouchers directly to the contractors, and you will pay only interest on the amount used, when it is used.

 

You will need operating capital, start-up money  and  if  you are giving up your job, money to maintain your household until you generate income.

 

Finding financing is not as tough as it seems. The United  States Small Business  Administration has  a lot of money set aside to help start and continue small businesses. It involves a detailed application with personal histories, business plans, detailed financial records, locations, projections, etc. The application goes to a committee and there it can sit. It is a very good loan to get, you just need to have time and patience.

 

Minority help is everywhere. Your SBA loan application will fare better, if you are a member of a minority. Remember, though there are more women than men, we are considered a minority.

 

Even if you don’t think you’ll need it, establish a line of credit. This gives you a certain amount of money that you can tap into quickly and pay only interest on when you are actually using the money. Always  pay  these lines of credit back as quickly as possible. With a swim school being a seasonal business in most instances, a line of credit is of great value.

 

Another way of funding your project is a backer. You can have silent partners. All they want to see is a profit, but generally they have no say in the business.

 

You can form a corporation and sell  stock. This can also have benefits from the liability point of view.

 

You can form a partnership and work together with someone who’ll help you financially and who will also work in the business. The problem here is, if a partner­ ship goes sour, dissolve the relationship immediately, it will not get better. Dissolving a partnership is always messy and disillusioning. It is worse than a divorce, because there is always money involved, job security, ego. Get a lawyer to advise you.

 

And in the last three instances also have a lawyer draw up contracts. Don’t trust a handshake, no matter how good you think your friendship is at the moment.

 

Whether you buy an existing facility or build  to  suit  check into government regulation before you put your money down.

 

Then dive into the wonderful world of government regulations, local ordinances, health department codes, etc. to name a few.  Do your leg work:

 

Zoning: Can you operate your swim school in the cur­ rent zoned area. If not, can the zoning be changed for you? Don’t assume that buying an existing business automatically gives you the same basis of operation. Frequently, new regulations apply with change of ownership.   This  is  true  for  all  the  following considerations as well, to name a few:

Operating hours: Can you open at 6:00 a.m. and stay open until 9:00 p.m. In some areas (residential for example) the city won’t let you open too early or stay open too late, because it may disturb the residents. If it doesn’t apply to our projected hours that’s O.K., but what if you want to change maybe later?

Lighting: Tall lights or bright lights may be necessary for you to extend your hours to generate more business, but does your neighborhood permit it, or can you modify the lights or the rules?

Parking: Most communities are enforcing strict parking rules. In a residential area people may bet very upset if your customers occupy every spot up and down  the  street. Needless to say, your customers are not happy having to walk what seems to them miles, even though there are only a few steps involved. Having to literally drag an unwilling child ten more steps can turn your clients away. In our community, an ordinance asks for 7 extra parking spaces for every  two feet of  water.   Why?  I fought for a variance on the grounds that this is an existing facility and no way to modify due to topographical condition.

chance of getting injured is slim. Probably less than that for office personnel, but as usual pools and pool employees are being lumped into other categories, and that makes the instructors insurance six times higher than that of office employees. I pay about $15,000 per year on insurance and that does not include any medical plan at all, and I don’t know what this fair city of Washington is going to do to me and all of us small business owners in the way of health insurance.

 

Uncle Sam, of course, is holding out his hand every­ where: property taxes, including every chair, desk, computer or loose item in the business. You will have pay­ roll taxes, monthly, quarterly and yearly, with your contribution being around 10%, Medicare  (in  California), and your own personal income taxes. Don’t forget to subtract the cost of your accountant. It seems a bit expensive, but you will need  one.  Get a good one!  It took me three tries. A good CPA will save you a lot of money! It is one more way you are forced to keep good records, which is very important. Believe me,  the IRS will check up on you.

 

If you thought you could write off  a  lot, check  again. The laws are changing constantly. I cannot write off any travel expenses of a relative.   For example, my  husband Handicap access:   Handicap access is a law.  There  go at.       is coaching our masters team, and any travel expenses least two of your best parking spaces.· Your shower facility is down to one. The two  toilet stalls  are  now only one. Some communities ask you to access the water by installing swings or ramps. If you are not on level ground, even the slightest elevation, you could be in for major expenses ($56,000 in my case, including access to my equipment room. It does make it easier for the chlorine and coke deliveries.

 

Signs: Can you advertise on the street where people can see your sign? How big could it be? Check your ordinances. There are probably a lot  more,  and  these  are only building codes which vary greatly in every town, county and state. So research.

 After knowing all your codes and regulations, start in on your insurance and don’t think you can do without it. That would  be foolhardy!

Of course, you will need fire, theft, and vandalism insurance. Liability insurance is a must. For your own  peace  of mind and your livelihood this is a necessity. It is not cheap, so do shop around. I got  mine  down  to $6,000 due to swim school networking.

 Worker’s Compensation Insurance is mandatory and quite high.  For example, we know that an instructor’s occurred due to National or World Masters Championships with our swimmers are not, I repeat are not deductible. I am sending my daughter,  who  works for me and is on my payroll, to the National  Swim School Association Conference together with my head instructor to Fort Lauderdale. My daughter’s  expenses are not deductible (she is a relative), though my head instructor’s expenses are O.K. You figure  this out.  I  gave one of my valuable employees two $550 tickets which I cannot deduct, unless I put it on her payroll and she  has  to pay  the  taxes.   That  means she  is out about $300 NICE PRESENT!

 

As you can see, a lot of detailed thinking goes into your plan to minimize your surprises. Surprises and mistakes are expensive, but we all pay for our education. You probably all have at least one facility in mind that you would want to build or take over or renovate.

 

If you have no personal ties, no obligations, and you could go anywhere you wanted, how do you choose a location for a swim school.

 

Go to the library. Check out the results and publications of the census bureau. Ideally, find a town with a population of around 100,000 with other communities nearby, easily reached  by express or fast highways.

 

It  should  be  a  predominantly  middle  to upper-middle class community.

 

The median range should be on the young side. an age of mid 20′ s is excellent. Mid 30′ s would be O.K., mid 50′ s is not desirable, if you want to teach! Of course a young community will generally not be an upper middle class area, but they have the kids!

 

Remember, we are getting the perfect  lot. It  is flat, so we don’t have to worry about grading and extra building expenses for handicap access. It is big enough for a parking lot and some landscaping.

 

The lot should be near major  thorough  fares,  accessibility is of importance, as you’ll draw from larger areas. Shopping in the area makes it more attractive.

 

If you pick a shopping center, make sure it is an upscale one, not one with a lot of teenage hangouts, fast food places, and convenient food stores.

 

If you like countryside, make sure that it is not so remote that the trip is too far and a customer cannot tie it in with any other errands.

 

Is the climate favorable? We all know of windy corners or dark valleys or fog holes. If your dream is handicapped by early mountain shadows, solar heating might not be feasible. If an indoor pool is considered, that  again, wouldn’t matter a whole lot.

 Are you going to move closer or live right on the proper­ty? Do you have a long commute?

 

There are a lot of considerations. There is no perfect place, but assess the pro’s and con’s. What can you live  with and what is insurmountable. Are some of the negatives really not so bad or are they going to cost  you  in terms of maintenance or customer traffic? Are the good points really that good or are you paying too high a price for a certain feature.

 

Shuffle all the pieces and they will fall into place. Many things are decided and are taken out of our decision making process either by chance or by tie ins with other situations.

 

Well, now we have the money. We have the place. What do we build?

 

Your own plan is of utmost importance. I am assuming now we want to build a full service swim school. We’ll have  members  who  swim  for fitness,  water aerobic classes, swimming lessons, swim team, birthday  parties, and other revenue producing programs.

 

Now the climate and populations  tendencies  are  playing an important role. In colder climates you have  to  be indoors or at least in a facility that  can  be  converted, either by tenting, putting a dome over, or sliding roofs. There are many varieties out there. I am in Southern California where people  don’t  want  to  be  indoors  all year long. They also don’t think of swimming lessons much in the cooler months, even if you offer an indoor facility. In my area, people associate swimming with summer, when  their own pools are   heated.

 

A friend of mine who has two swim schools on Long Island, New York, says that December is one of his  biggest revenue months, in indoor pools of course, and his summers are slow due to vacations. In my place, the months of May, June, July are by far the biggest, and in December, you could be as lonely as the Maytag repair­ man.

 

Since we come from a coaching background, we are having a team. If  we are only  having one pool, it would,  of course, need to be six lanes wide by 25 yards long (it could be four lanes only or only 20 yards long) but that would  limit our team sizes and  levels.

 

A better set up would  be  two  pools.  One for  teaching and therapy at around ninety degrees, and the larger one for fitness swimming, exercise classes, advanced lessons, masters and age group teams with a temperature of about eighty-two degrees.

 

As far as configuration of the teaching pool, there are many ideas and you need to come up with your own idea. At the National Swim School Association Conference we discuss points like this all the time, and I have seen fellows who come with blueprints, etc. and leave with totally renovated plans!

 

Two pools gives you the option of operating only one in the slower season and cutting down your overhead.

 

If you want to make real money, you  probably  don’t want a lap pool at all. You would teach lessons only at peak seasons and close for part of the year, cutting down your cost and making a pleasant life for yourself.

 

If startup money is a consideration, you might want to begin with a small pool only. Operate in peak season only. Enclose it at a later time. You could rent a mobile trailer for office and locker rooms until you can afford to put  up permanent  buildings.   Later add a  big pool and permanent structure. Plan ahead so you have a mini­ mum amount of tear down and rebuilding cost, and you can utilize existing structures.

 

The locker rooms should be simple, well aired, easy to clean, moisture resistant and child  friendly.  Tiled  from top to bottom is ideal, but costly and can be done later. I found two toilets and two showers adequate for both the men’s and women’s bathrooms. Have a team room if you like.

 

The office needs to be large enough, accessible, and centrally located, so that if only one person is on  duty, she  can overlook the  whole  facility.  You  can  allow  space for a small shop, exercise room, and you will need storage space.

 

The equipment needs to be adequate if not oversized to ensure clean water. That is another whole subject.

 

If you are planning on an indoor pool: Do you want it indoors year-round, some of the time only? Do  you want sliding doors? Check out your needs, climate and customer’s needs (some areas have wimpier swimmers than others!)

 

There is great variety. You can get bubbles, canvas with a metal ribs holding it up, or a structure held up by steel cables, or a movable vinyl and glass building, or solid buildings, in expensive and reasonable price ranges.

 

Get local building code approval before beginning  any­thing.

 

Your pool itself, presents quite a challenge. Have you ever checked out how many different types are out there? There are a lot of above ground pools, and many are very sturdy and affordable, providing your health department and building department approve. The in ground pools are constructed of vinyl, aluminum, granite, with different kinds of finishes like plaster, fiberglass, rubber, etc. I could go on and on. A good gook to get is Pool & Spa News by Leisure Publications. It contains company names and products of anything you would need for your pool and equipment. It is worth the investment.

 

Some people have waterslides, wading pools and spas. Check out your expenses versus possible revenue.  Are  you thinking about necessities or amenities? Are you interested in revenue, or are you giving a public service?

 

Keep  in mind,  if you  work  full  time in your facilities certain  items  may  not make  financial  sense,  but if it makes your life a lot easier and  more pleasant, it may   be worth considering.

 

One of the  most difficult  aspects of owning a  business,  is being an employer. Most small business owners are pretty terrific in what they  are producing  or  what  they are doing, but hiring and worst yet firing people is the most difficult and most hated job. If you are lucky, you have one key employee in each department and they can make life a  whole lot easier for you.

 

You’ll probably wear all hats in the beginning.  One hat I should advise you to let someone else wear is book­ keeping. You need an expert there. As I said before, a good CPA can save you thousands of dollars and your office person answering phone calls and signing up customers probably shouldn’t do your books. You need cross references. Whoever takes in your money, shouldn’t keep your books. Try as you might, you can’t keep your eye on everything. You’ll be head instructor, head coach, head maintenance person, head office man­ ager, head troubleshooter.

 

When business gets going, of course, you hire people. I suggest you stay with what you love, if it is coaching, then coach and hire teachers; be it teaching, then teach and hire a coach. If you’ve never seen yourself as an office person, then stay out of there, even though signing up new customers is the most important job at hand. Stay visible and accessible.

 

Be the boss. Delegate, but don’t be afraid to pitch in if it  is necessary, to benefit the customers, or go and  help out  a valued employee. You might have to alter your own plans to keep your staff  happy.

 

Create a chain of command and stick to it. Screen and train your employees or have a supervisor do it. Don’t forget to supervise the supervisors. There will always be a dud. Get rid of that person sooner rather than later. Second chances, usually don’t work. Trust  your instincts.

 

Listen. Don’t interfere in front of customers, or better yet, have a good job description for your employee  an  you do not need to interfere you just need to  reinforce.

 

Try not to be moody, temperamental, or inconsistent. Be fair and don’t play favorites. Know your weaknesses and try to improve what you  can.

 

If you have reached a good bottom line, and you have climbed out of the financial cellar, reward loyalty.  Pay  for  good  service  and  look  into  a  good  reward system.

 

Seasonal help is expensive to train, so give them a rea­ son to come back. Look into profit sharing or retirement plans.  Give out little awards along the way.

 

Don’t fall into the trap and hire instructors and call them independent contractors. One of my swim school owner friends  was  caught  by  the  IRS  and  had  to  pay  over $120,000 in back employment taxes and fines. This was only for several instructors she sent out to private homes. This did not even include people that worked on her premises. I know of an architectural firm that went bankrupt due to back taxes and fines claiming the architects in the offices as independent, which they actually were to a large degree. Even now, if you presently work for            cash, but if someone  else “really” employs you, be careful. In your handout is a Form 937  a 2DO point reference for independent  contractors.  If you can answer yes to even one statement, you are an employee and your employer needs to pay all taxes or you both will be in serious trouble. The IRS will check your sources of income and write offs.

 

When your business grows you’ll probably hire a receptionist first, next a full time head instructor, and depending on your facility and your own abilities a plant manager/maintenance person. Other office people and instructors and coaches will probably remain part time unless you run a pretty steady year-round program, which is obviously ideal.

 

The source of your employees is different with every situation. If you have colleges in your area, they are an  ideal source. I personally found “moms”,  part  time adults not a good resource, though some swim schools swear by them.

Make your part time seasonal people feel like full time people. Train them well. Treat them  well, pay  them well, if you can. They’ll come back. I have three seasonal people five years now, two part time people seven years. In fact, I only have one really full  time  person and I just made her salaried this year after three years of part time work.

 

Your employees will be your most valuable assets and your biggest headaches. Learn from mistakes, don’t be closed minded. I have learned a lot from my employees. Due to the informal nature of our business, like dress code and dripping wet kids everywhere, it is sometimes hard to be the employer/boss and to make sure rules are followed and company policies are enforced and upheld.

As a boss, you have a lot of power. Make good decisions for your business and for yourself.

I am right now in the fortunate position that I have a good staff, but I am not yet daring enough to let go of the reins. Several of my friends have more than two facilities and spend very little time in  each  of  them. That takes a certain personality; maybe if my name were not over the door, I could expand and after spending seven years getting my current place the way I want it, I am thinking daily of the possibility of opening another place.

 

So now I am at the very beginning again: I am looking for a place (have several locations in mind) I have financing, but I am nervous about staff. The profit mar­ gin in swim schools is not that great, and if you don’t have a responsible managerial staff, it’s hard. There are several ways you can make expansions work.

 

The best way, I think, is a personal financial stake by the manager. Let’s say, it is my own location, my financial responsibility, and after all expenses (taxes, operating payroll, etc.) are paid, I’ll take a certain percentage and the head manager after getting a regular salary takes the rest. Better yet, if the bottom line is estimated  to be about $100,000, the first year, I take $80,000, the man­ ager takes what is left. If the business generates an increase of 20%, I still get my $80,000 but only 20% of the increase, which will leave me with $84,000 and the manager gets $36,000, good for the manager and for me, because my assets are growing (with the mortgages and loans paid off, the value of the business is increasing). We both win! Particularly if there are clauses in the contract that he has first refusal in case of the sale of the property, or a way to actually buy the property.

If  anybody  here is interested, let me know.   I  have  the seven year itch to move on.

 

A good staff will make running your programs easy. Your programs will be dictated by your own preferences, but don’t be blinded by what your market should really be. Be familiar with the percentage of your different programs: The percentage of income compared  to the total revenues: The percentage of expenditures, wages, and cost, compared to the total expenses.

 

Don’t be afraid to cut a program. If it is not producing, chop the dead branch of your healthy tree. If the aerobics class has four loyal participants, but can’t really get going after several different approaches, cut it. Don’t moan. Find a new program.

 Sometimes, we keep a program for sentimental reasons. If you can afford it, keep it, but at least modify it. In my facility more than 80% of the gross revenue  are from lessons. Less than 5% is from the swim team.  Salaries of coaches on the other hand  are  between  40% and 70% (depending on season) of the team  income.  Swim instructor’s wages are below 30% of the lesson revenue (but there you need to figure most of the office workers salaries into it.) Financially, it is not sound to  have a team, but I see it as a service to our lesson graduates, and a service to the community,  and  you  should think the local “big” team would  be  grateful  for  us  to turn over an average of twenty five kids with excellent skills and work habits. We decided  that our facility  and our purpose lie in the instructional end, and why  compete with another team in town,  when  nobody  offers  what  we do.  We try to be the best at what we are  doing.

 

Every area is different. We have a lot of competition in our-area and we listen to our customers. That in itself dictates the programs we run. For instance, in looking over my first business plan, I was pretty close in predict­ ing the overall expenses and revenues,  but boy was I off  in which programs generate what percentages of the income. My baby and me classes never  did  what  I thought they could do. My aerobics classes are a flop, regardless of instructor, time slots, types,  etc.  On  the other hand, our birthday  parties have taken  off.

 

To be a good employer and boss, make time for your family and  yourself.  Nobody  is  indispensable.  Life is too short, and Peter, wherever you are · Yes, there is life beyond coaching and swimming.

 

When you are closer to your swimmers and know them better than your own kids when every weekend is spent at swim meets or at work and your vacation is a trip with the team to Hawaii you  need to re-evaluate your  life.

 

Last, but not least, owning your own business is extremely rewarding. It can be a lot of work, a big headache, and can take over everything in your life if you let it. You are in charge. You take the risks. You make the decisions. The buck stops with you.

 

I love what I am doing. You wouldn’t know it the way I moan at times. I love to go to work, and I am in charge of  my life!!

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