Owning Your Own Program by Bill Schalz (2005)


Published


Thank you very much for that introduction. I also want to thank John Leonard for asking me to be here. When he called me I just assumed my dues were overdue or something. First, a little history about the Bullets and what my background is leading up to starting the Bullets team. As Chuck said, I founded the team, the Academy Bullets in 1994. We started the team from scratch. Previously my wife and I coached at the Aurora YMCA for eight years. My wife was the head age group coach and I was the head coach. I don’t mean to slam the Aurora YMCA at all, but I just didn’t enjoy it. One of the big problems I had was the fact that I had a parent’s board that I had to answer to. I had an executive director. I had an aquatic director and I had to answer to all of those different groups. Serving three masters who didn’t have the same goals and didn’t have the same visions for the team made it awfully difficult. Compound that with the fact that in the eight years that I was at the Y we had seven different aquatic directors with some obviously more experience than others, and that made the challenge even bigger. Then in 1994 Marmion Academy was looking for a head coach and aquatic director.

Marmion Academy is a military catholic college prep academy in the Western suburbs of Chicago. It is my alma mater. My high school coach, Jim Kelly, asked me if I would take the job. At that point I was really ready to get out of the Y and I really wanted to start my own team. I thought a lot about it and took the job. I started in April of 1994 with the aquatic director and head coaching position. I think it paid me about $5,000 that year. I wasn’t going to get my salary until November or December so I was not jumping into a financially sound situation, if you will. I did have a lesson program, a Swim America program that I had started. I will talk a little bit about that towards the end. I started that program in 1992 so it had gotten going, but it really wasn’t generating a lot of income. It was breaking even. It was making a little bit of money, but it wasn’t making enough to pay the rent and those kinds of things. Still, my wife and I decided this was the way we wanted to go. We both thought we would be much happier.

Now I am going to talk about how we started the team. I am going to show you some of the mistakes I made and how we set up the program. This is really going to be swim team business 101. I only have 45 minutes which is not really enough time to go through everything. I’ll get into a lot of detail. I am going to try and get through my talking points a little bit early and if you have any questions I’ll be more than happy to answer them. If we go over, that is fine too and I am happy to do that.

So, I have listed some characteristics of what I think a typical business owner is, especially a swim team owner. My first item is you really need to be passionate about swimming. The first couple of years that I started the team, I was married to my wife, but I was also married to my swim team while my wife was our head age group coach. She had coached at another program and we met on the pool deck. We got engaged and then she came and started working for me. She is an awesome swim coach and certainly made it a lot easier. Having myself as the head coach and her as the head age group coach I knew that our age group program was going to be in great hands. We are both passionate about swimming and that really made a big difference in starting the club because it is a lot, I repeat, a lot of work. Tim Murphy was coaching Wilton Y at the time and now he is the Harvard coach. He asked me about ten months into my first season with the Bullets how did I like owning my club? I said well, it is ten times more work than I thought it was going to be, but I haven’t had a parent board meeting in ten months. He just looks at me and goes, “life’s little pleasures”. I was like, “yup”.

I think you need to be a hard worker. Just to give you an idea, I am the CEO, CFO, Treasurer, and I am in charge of payroll and payroll taxes. I am the first one to get there and I am the last one to leave. I am in charge of customer complaints and employee complaints. I am the secretary, and the receptionist and I have to coach a practice group. So there are a lot of jobs. Our club has finally grown to the point where I have been able to get rid of a lot of those jobs and get those out to other people in our program. We have some great people working for us right now. A lot of the administrative tasks, finally after the past three or four years, I have started to get rid of. This year was a big jump because we hired another fulltime employee. Now I have really been able to get rid of a lot of those jobs and it is going to allow me to focus on growing the program, building a pool and doing some other things which I will also talk about. You need to be ready, willing and able to take responsibility. You are 100% responsible for what is going to go on in your club. I tell my athletes that all the time, “you are 100% responsible for your swimming career” and it is the same thing with the club. I own the club. If I hire a coach and he or she does something really stupid such as gets caught with a DUII or something like that (knock on wood, I have never had that experience with one of my assistants) I am responsible for that. I am the one who brought that person into our program. When things go well, I get a lot of credit for it. I try to divert as much of that credit as I can to my people who are working for me because I do have a great staff. On the other side you have to take responsibility. I think if you do take responsibility your customers or your swim team families are going to really appreciate that and respect that. You need to be willing to stop being an employee. This might be the most important part of the talk. I am going to reference a book a little bit later on and I am going to reference it a bit now. Colleges now are teaching people to be employees. When kids come out of college the first thing they do is go and look for a job. A hundred years ago kids went to college to learn the family business. We are really kind of an employee mindset when people come out of school now. This is my personal philosophy, agree with it or not agree with it. I don’t want to get into a debate with a bunch of college coaches.

A lot of people think, oh my God, I can’t start my own team. There is too much risk involved. Well, look at the want ads every spring and every fall and you will see what the job security is in our business. Look at the ASCA website. Every year there are jobs. For some jobs it is the same team year after year after year. It seems risky to start your own club but the Academy Bullets has had the same head coach for the last 11 years. We have had two head age group coaches. The reason our first age group coach quit was because her kids started getting older and she was too busy being a fulltime mom and or being a mom that gets her daughter to her five athletic events of which swimming is not. Obviously, when we are on deck together and somebody needs to be with their family, I really have to think about the employee. You, however, must stop being an employee. It is really an important part of owning your own business. So many people I talk to, they just don’t do it. I think there is a mind-set there. Later I will give you the name of a book that I think is really interesting and really talks a lot about that.

You want to start a club? What do you need to do? What are the most important things? I believe you have to have a clear vision of what you want your team to represent. Also, don’t try to be all things to all people. When I talk about our club, the vision we talk about and our goal is to help kids get to the highest level of swimming that they possibly can. Like I’ve said, in our program I don’t have to go to a board. If we have a couple of kids that are going to Olympic Trials and we want to do a two week training trip in Florida (which we did a couple of years ago) I do not need to go to the board and get permission to do that. “Oh wow, do we really want to have our head coach going away with two kids. I don’t know if that really makes sense.” There is no red tape on our team. It is me and the vision we have of what we want to do with this team. I am dedicated to helping the kids get to their highest level. I leave that to my age group coaches to do the same thing with the age groupers. We will do everything we can within reason to supply what those kids need so they can reach their highest level. That is just NOT always true in a parent organization. Be honest with your families. Don’t tell them what they want to hear if that is not what you are willing to do with your team. Like in any business, if you promise one thing and you don’t deliver, that family is going to go out the door. That mom or dad is going to go out and tell every one of their friends what a jerk you are and how rotten your program is. Word of mouth is critical in our business. It is very critical in the swim lesson business as well. If you want to be a high level program tell them that. If you are going to be a mom and pop, baby sitting service, and if you only want to be a baby sitting service, don’t tell them you are going to be a high level program. Tell them the truth. Be honest and you will find out that the market will come to you. That has certainly happened with us.

Next, what is of absolute necessity is water? I know this sounds stupid/simple, but if you don’t control your water then you do not have any control over your business. I list three levels of control.

1. You actually own the facility or the pool where your team is going to be practicing. That is obviously the utmost control of the facility.

2. Is the situation that I am in. I am the aquatic director of the facility that we rent. I have to keep my principal happy.
I have to keep my athletic director happy. My principal and I went to high school at Marmion together. We are good friends and I have known him for a long time. I let him know what is going on in his pool all the time. My job is just to keep him happy so he doesn’t get ticked off and fire me. I have pretty good control. I schedule the pool and I also coach the high school team there. So, if I am doing a good job there my swim business is in very good shape.

3. The third level of control is really just rent a pool.

That is something that we have just started doing this year. Our facility just opened. It is new. It opened up actually September 1. From the very first meeting that we had with the park district to the actual contract that we signed, our pool rent went up, our pool space went down and our pool time went down. They gave us time that we could not use. We had to actually fight back and tell them that if we couldn’t get the time we needed (because we couldn’t start before 4:00 PM) that we were going to walk away. We didn’t have a choice. I realized very quickly that if this facility starts to book up and starts to fill, we are going to be in big trouble and we are going to start getting squeezed out. So before we are even in the pool, I am actually putting together a five year plan to build another pool. The plan is to grow into that other pool and have a little buffer in case something happens at the park district facility. We have a great relationship with them now. They like having us in there because we know a lot about aquatics and this being their first indoor aquatic center we have been able to offer them a lot of help. I just don’t know if this facility gets really crowded if the other members are going to start squeezing us out. They will realize pretty quickly that they could make more money teaching lessons than they can renting out to a swim team. So those are the three levels of control that are very important.

I recommend a multi-year contract. Obviously the longer term contract you can get on your water the better off you are. You need lawyers and accountants. Especially at the beginning when you are starting the program you need a lawyer. You are setting up a business and there are different types of businesses. You could be a sole proprietorship. I am not going to give any legal advice except probably don’t be a sole proprietorship. There are different types of corporations. We are a subs corporation. There are limited liability corporations and not for profit corporations. When we started the club, people used to ask me are you a not-for-profit organization and I would go no, it is just working out that way. It has gotten better.

When establishing a business it is important to have a lawyer and an accountant help you with these things. They can tell you what the tax advantages are and what the liability advantages are with different types of businesses. You may start up in several communities. You may have three different types of businesses. You may have an LLC, you may have a Sub-S and you may have a not for profit. Some teams do that. If you start a business and you own the pool that might be a different. The building might be a different type of business than the swim team with the swim team and renting. It is important to get good legal advice on that up front. The accountant helps you set up your accounting process. We use Quick Books.

If you have heard of Quicken and Quick Books it would be good. I didn’t do it. I set up my quick books and did it on my own and then when I went to do my taxes my accountant was like well if you had done this, this and this it would be a lot easier to do your taxes. Little things like that, teach you how to do your payroll taxes. We use the payroll service with Quick Books and it is actually very easy to do. I just use my accountant now to look over to make sure that I have not made any mistakes when every quarter I send him all my payroll stuff. He checks my math and things like that. For a very small fee he takes care of that for me.

When I first started the team I paid my payroll taxes quarterly and that was fine. I was doing it on my own. I didn’t have an accountant. As our lesson program grew we got more employees and as our swim team grew we started getting even more employees. Thus, the amount of money from our payroll was exceeding the quarterly amount. That is because when you pay payroll you actually are collecting money for the IRS and you have to pay that money back out. If it hits a certain threshold, then you have to go from being a quarterly payer to a monthly payer. If you hit a higher threshold you have to go with payroll taxes as you collect them. I didn’t know that. You don’t want to find out how intense payroll tax fines and paperwork fines are. We paid higher fines for not turning the paperwork in on time than we did for not paying the taxes on time. A couple of thousand dollars later I learned a lesson. Now I use my accountant all the time.

I recommend that you not have your accountant or your lawyer be swim team parents. We have very capable lawyers and accountants on our swim team who can do a good job and could have done a great job for us. My concern was that if my accountant’s daughter and I had a falling out and they got mad at me then I would have someone who had a lot of knowledge about the inner workings of our business. He could start telling people truthfully or untruthfully rumors, whatever he wanted. I think that would put me in a little bit of a vulnerable situation. It is my recommendation that you not use a swim team parent for it. That is up to you of course. I don’t think the lawyer part is necessarily as important unless you are using your lawyer for your taxes and things like that. I was more comfortable doing it the other way. My attorney is a family friend. My brother is a developer and I use the accountant that he uses. It has worked out really well for us. It is very important to have people like that around. People do not necessarily think about the lawyer and the accountant stuff, but it is very important.

Office; obviously you have to have an office. My office is the luxurious 4th bedroom in my house. That is all the space we need. Currently I have hired my assistant coach’s fiancée to do a lot of our administrative stuff. It worked with my wife so I figured it would work for him too. We brought Kelly in and now they are doing some of the stuff out of their house. I think eventually we will probably get to the point where we would like to build a facility and get an actual office. At this point, he likes working out of his house and I like working out of my house so we are just doing it that way.

There are some things that I think you need to look at and these are just my observations. Like I said, we use Quick Books with the payroll service. The payroll service is something that you can pay. It’s like $100 a year. It may not even be that much, but then you can do your own payroll and it is actually very simple to do. When you own your team you don’t just have your best times on your computer data base. You need online backup. Most teams use high tech. We use high tech team manager and meet manager and business manager. I think it is really important to have off site storage. We use Iomega. They make the old zip drive and things like that. Iomega has an online storage. Again, I don’t remember how much it is, it is pretty inexpensive. It is under $100 a year. I leave my computer on all the time. Every morning at 1 o’clock, anything that I have backed up, it is backed up online. You are going to have your business records which you are responsible for. I think it is like every up to 7-10 years you can be audited, so you need to have your business records. I have my swim lesson program. I have a swim team and I also have my home and personal checking account, plus our business manager’s stuff. If we have a fire at our house, a tornado, a hurricane, anything that damages that information, I can now go to any computer in the world and pull that information off line and have it ready to go with all my business records. Otherwise, if somebody says well I paid your fees…did they? So, it is critical to have those records backed up and backed up off site. When I talked to my assistant about this he is said just back it up to a flash drive. I said what good is that if the flash drive is sitting next to your computer when your house burns down? There is no value in that so it is very important that you have off site storage.

Web site; a web site is very important. John Lornet out in Colorado is a swimming guy and very involved in Colorado swimming. I think initially he may have had the USA swimming website, but he does a lot LSC’s. I think for about $5 a month he will do your swim club’s website. Our website used to be Academybullets.usswim.net. We actually changed the address to Academybullets.com. I think it is important to do that because your website is going to be how people are going to find out about you. That is the first place they are going to go to get information on your team. The more your website address resembles your team name the easier it is for people to get information about your team. They are going to look on the web and they are going to do a Google search before they go to the yellow pages or the white pages or anywhere else. You need to have a website.

When I started our team, actually up until this year, I did the website myself. I use a software program called Microsoft Front Page. Knowing that you need to have water is stupid, simple. Setting up a website is just as simple. It is very, very easy. It is one of those things that people are kind of apprehensive to do because they have never done it before. Once you get into it and start doing it, it is pretty simple to do. A swim coach for another team in our area helps us. She actually re-designed our entire web site and it looks a lot nicer now. It is a lot easier to get around. I just kept piling stuff into it and she stripped the whole thing down and made it a lot easier and much more user friendly. Now we have a lot more information on the site. We can put virtually all of our information on that website. It really limits the phone calls. People can learn a lot about our club there. That is the first place they go. Since the opening of the new park facility this year we have already grown our team by 30 kids. We send information out with the web site printed on. That is how they get the bulk of their information. I just cannot stress enough how important it is to have a website and have a good website that people can use and utilize. Like I said, John Lornet, he is very, very reasonable.

It is unbelievably inexpensive to set up your website. We have done a lot of different things and he has been very, very good for us. John Lornet and the name of his company is Lornet. I actually think on the bottom of our main page of our website there is a link to Lornet. I am pretty sure because I think he puts those on the bottom of the pages. We have a swim lesson program too. Most of the people that I know that own swim teams also have a parallel business or a complementary business if you will.

Like I said, we have started a lesson program. I am the aquatic director at Marmion I have full control. We run a summer lesson program that up until this year we have had about a thousand kids in the program. That is just in the summer. For the first time now we are going to go year round. In the last month our swim team and swim lesson expenses have gone up about $100,000. We have hired a full time coach and a fulltime lesson director. If you include the rent we are now paying for the new facility there is a little bit of pressure on these guy to grow the team and to grow the lesson program. We also have plans in another year that involve our local hospital which is building a wellness center. Ironically, they are building it right down the street from our parks district facility. They have asked us to run all the aquatic programming. As a result I went to the facility summit at USA Swimming and learned a lot about vertical exercise. I know that USA Swimming is working with American Exercise Associations so if you do some of that stuff, there is a great opportunity not only in swim lessons, but in adult fitness and things like that. All of it is very lucrative. I know some other coaches are doing that now. Our lesson program has just been awesome for us. There is a team in California that does 2 million dollars a year in lessons. If you own your lesson program and you are doing two million a year and you are making 10% off of that, which you should easily be able to do, you are making 200 grand a year. There are not a lot of swim coaches that can do that. That is my goal. My goal is to get our lesson programs going and build a couple of pools and get it up to 2 million dollars a year. If I can do that my salary is going to come completely out of the swim team. My head age group’s salary is going to come out of the swim team. He is going to be making more money than most of the coaches in Illinois. I will just pull all of those salaries out of my swim team. Now I can use the lesson program money to hire more coaches and hire better coaches. Our lesson program will really help our swim team get quality people in there.

There are other things that people have done. I know that Rick Curl has got a thousand kids on his team. I think one of the things that he does is in pool management. They go into a pool. He then manages the pool, brings a coach in, and starts a team there. That is how he has grown his swim team. He makes the money on the pool management too so there are a lot of opportunities out there. There have been swim coaches that started swim shops, swim suit supplies and things like that so there are a lot of options out there to do.

The swim lesson program has some distinct advantages to the swim team. Not only is it going to help pay my salary, but it gives us an opportunity to hire our senior level swimmers who are doing doubles all summer. We only run lessons for two or three hours a day, four days a week in the summer. Our senior level kids practice in the morning, teach swim lessons, take a small break of 30 minutes and then they do their afternoon practice and they love it. It is tight. I mean they are busy from 6 AM in the morning until 3 PM in the afternoon, but then they don’t have to come back at 5 to 7 PM at night. They like practicing in the middle of the afternoon because then they have the rest of the day to themselves. These guys have spending money and it is not taking away from their training. They have a summer job that does not interfere with their training. When we have different kids going to championship meets, we adjust our swim lessons for that and make sure that these guys can go off to their meets. The week before your championship meet, you do not teach lessons so you can get a little bit more rest in. I have full control over when and how much they work. I listen to them. We do not do six hours of lessons a day because that would just be crazy. Now that we are running year round lessons we are starting to hire outside people. We will expand our lesson program and hire non-swimmers for those other lessons. However, we are still going to have that avenue for those kids to make money and they will really like that. They like the fact that they can make money. It is a great social outlet for the high school swimmers and college swimmers. It has also been great for bringing kids into our program.

Last year I was talking to Jim Wood out in Berkeley Heights. I have to give him a plug here because he had a program called “take your mark” as his pre-team. We started a “take your mark” program and had like 12 kids in it last summer. We have started again on Wednesday and we have 20 kids in it. I am very confident it is going to continue to grow. We already are getting kids out of that “take your mark” program looking to come into our swim team. That also gives another group for our 8 and under coaches to coach so we can provide more money for them. I stole the name and everything from him. The early signs are that it is going to be a great program for us.

I took my daughter to Disney World when she was three years old and I couldn’t get her in the water without a jacket on, because she always wore a float belt when she took lessons. I came back from there and I wanted her to learn to swim without aids. The lesson program just was not that strong at the Y so we started our own lesson program outside of the Y. I took some grief from that, but we were well north of the Y. We were advertising even farther north so we really were not in a big conflict with them. Obviously we were getting some people that would have taken lessons there, but, you know, it was just something we needed to do. I felt we needed the lesson program if we were going to help grow our swim program. It has been great on every level. Everybody will tell you that when you first start a lesson program “man people are going to be knocking down your door”. Yeah right, I think we grossed $1800 the first summer. Now we have a thousand lessons that we are teaching at $75 a piece. You can do the math on that.

Another thing that you have to have is great coaches. I read or heard or saw somewhere that if you get all your advisers for your business together and all the people that work for you and all the people that you count on, that when you look around and you are the smartest person in the room, your business is in big trouble. I firmly believe that.

My wife Robin is a great coach, always talking to kids, always working with them. She was a tough coach and kids got really, really good swimming for her. Then, when they came and swam for me it made my job a lot easier. When Todd Capen, who is my current head age group coach, still had another year to go at Northwestern I was counting the days for him to get out of there. I knew from his swimming days that he was a great leader in the water and he was going to be a great coach for us. He has done an outstanding job at the age group level. He was a big catalyst for me to really help get the program from around 100 kids when he joined our program to where it is 180 now. When he came to the program my own kids were kind of getting to the age where I wanted to spend more time with them. It was really a challenge. I was a little reluctant to grow the program and put myself in a position where I might have to do a lot more work and spend more time away from my family. When Todd came in he had a lot of energy for the team. We did a lot of things and he really got me moving again. He took on a lot of the work and took up a lot of the slack helping our program to grow dramatically. Largely because of Todd doing such a great job at that part of the program I was able to focus on the lessons and other things, as well as the senior group. So, I cannot tell you how much and how important it is to surround yourself with great people that are really going to help your program thrive.

I will try to get through this kind of quickly because I want to leave some time for questions. The last couple of things that I want to leave you with is what I titled “Pull the Trigger”. I have probably talked to over 100 people about owning their own club and nobody ever does it. I have seen people that are in great water conditions so that they could easily start their own program and just for whatever the reasons are, they just don’t do it. My wife used to get so mad at me because I would lay out an entire blueprint of exactly what we did and how we did it. I would talk to people for a couple of hours. She would get so mad at me and she would say, “Why do you tell them everything you did? Why are you telling them everything?” I’d reply, it doesn’t matter, they aren’t going to do it anyway. I really wish people would, but they don’t. I really think that a big part of it is the employee mentality, cutting that umbilical cord.

Your job is getting out there and doing it. As I said at the beginning, starting any business has risks involved. You know, if you are not a very good swim coach you are probably not going to have a very good business. If you are lazy and you do not attend to running the business, if you just want to be a swim coach and you do not want to attend to the other details of your business, your business is going to struggle or fail. Still, as much work as this has been for me, the value of it is that I have been working for me and my family. I have been doing this the way I want to do it. At the end of the day when I look at our program I have nobody to blame, but myself. It is my responsibility and it is what I want to do. I am running my team the way I want to. Our team has grown by leaps and bounds. I brought in great people. I don’t have to ask permission to do anything in our program. We do it the way we want to do it. One of the interesting things that I have found in our program occurs when people come to our team. I was concerned whether people would want to swim for a coach owned team?

I have seen other teams and how much control the boards have and how much control the parents on those boards want to have. The interesting thing I found out is yeah, people do want to swim for a coach owned team. They want to swim for a coach owned team because they are tired of the politics. We have so many kids on our teams that swam for other teams where their parents were presidents of the boards. I have actually heard when a swimmer comes to our team, the other coach say, ah man, that family is a nightmare, good luck with that one. Actually, we didn’t have any problems with them. That is not to say we have never have problems with parents? Yeah, we have. I would say in the first three years of the team we probably kicked five families off the team. In every situation it was because of their parents. They wanted to run the show. That is not the way we do it so we asked them to leave. I don’t think I have done that in years. I have told families if we are not doing what they want, there are a hundred clubs in Illinois, 110 clubs in Illinois and there are 80 in Chicago. I mean, every ten feet there is another club in the Chicago area. I tell them to go find one and swim for them. I am not in the business of turning swimmers away or getting rid of swimmers, but his is the way we are going to run our program. I tell parents all the time if you come up to me and ask me a question, I may not give you the answer you like, but I guarantee you, if the next person comes up and asks me the same question I am going to give them the same answer. That is just the way we run the team.

Let me give you the name of a book. The book is called “Retire Young – Retire Rich”. It is written by a guy named Robert Kiyosaki Have you ever heard of “Rich Dad – Poor Dad” series? This is one of the books in that series. I read this book last year on the flight to the facility summit in Colorado Springs. I ended up camping out in my room between meetings and just reading this book. I read it cover to cover before I ever got back home. I think I have 40 or 50 pages dog eared in this book. The book really talks about the difference between the employer and employee mentality and why owning a business really isn’t as risky as some people might think. If you start a business and it fails – okay – don’t worry about it – start another one. Learn from your lessons. It was one of those books where I was just like “yes”, absolutely every time I turned a page. It was a lot of the stuff that I had thought about even before I started the team. I had an opportunity to go to Marmion in ’92 and I didn’t take it. It was not until ’94 when I really felt that my situation at the Y was untenable. I ended up taking this job. It is a lot of work. I do a lot more work at swim meets than I did when I was an employee. I know that I am doing this to make my team better. It is certainly more fulfilling as a coach. So, if you have any questions, I will definitely take questions now. I would have to say a final thought. Just pull the trigger. If you have got the option to do it, get it done.

Yeah we do fundraising but very little. I think now, depending on how much income we get on these new families and if we have enough families we may do a swim-a-thon next year. We run a swim meet in January with about 7-800 swimmers. We require every family to sell $100 worth of ads for our meet program. They sign a contract when they register for the team that if they don’t fulfill their requirements that they will be charged $100. The families also have to work the meets. We get 95% of our families working the meet, no problem. We have the usual situation where 5% of the families do 50% of the work or 80% or 90% like any team does. Still, we do have a great group of families that do that work. We bid on and will be hosting our Senior State Meet this spring. We have plans to bid on our Age Group State Meet. I don’t go to the parents and ask them if they want to do it. We just sign them up for it. We encourage them to do it.

One thing that I am going to talk about tomorrow in my age group talk is about how we want to make this something that the kids want to do. I think it is the same way with the parents. We encourage them to work the meet. When we hosted our Senior State Meet, before the Sectional Meet, it was a great meet. That was the meet where people went to try to get junior cuts. All the swimmers in Illinois went to it and it was a great meet. We kind of billed it that way to get people in there. We hosted a meet in Wisconsin, our Age Group State Meet in Wisconsin. It was two hours away and we had 90% of the people show up and work. Some people that didn’t come to work, claiming they had family emergencies or something like that. I assumed they were real. I didn’t think about that until now. Truly we had great attendance.

Q. I just started this year with my own team and running Quick Books as well. You mentioned business men you also use also. Is there need for both?

I think for the escrow and stuff I did need both. I couldn’t figure out a way to get it right. When I started the team 12 years ago I couldn’t find an easy way for Quick Books to keep the escrow separate. I didn’t know if I could put it on a separate spread sheet. I didn’t know if there were other things. I probably could have done it differently, but with a business manager right there it seemed like the easiest way to get it going.

Q. Do you have any parent leadership group or parent organizing groups?

We don’t. Now that our team is getting bigger and we are in two different facilities, maybe we will. Jeff Pease, down in San Diego, and I have talked about this a couple of times. He has a parent booster board that he works with. It is an interesting concept. He has the swim team which I believe is for profit and he has a booster board which is not for profit. They are directed to provide X-number of dollars to the club. Initially when he set it up he said you guys need to raise this much money and that is what they did, whatever it was. If Jeff said $50,000 they raised $50,000 a year. Then they changed it and said, you have to raise $50,000 and anything you raise over $50,000 the board gets a vote. Jeff in turn gets a vote. As long as they both agree to spend the money then they spend it. He said now they are raising $100,000 a year or maybe not that much, but he said they have dramatically increased their revenues. He said the only time (this was a couple of years ago) that they have ever vetoed a request of his was when he wanted to fly his senior team to Hawaii for a training trip and they wouldn’t do it. I am contemplating it. I am just waiting for all the dust to settle with all the stuff we are doing right now. I think that is a direction we will probably move in.

Q. What is the name of Jeff’s team?
North Coast Aquatics.

Q. You mentioned your fee structure and how you are structuring your fees. Do your parents ever feel like they are fund raising just to benefit the coach? How do you handle criticism for that area of we are paying all this money and he is just getting to keep it?

I tell them to go somewhere else if you don’t like it. No, I am kidding. When I used to coach for a parent board I would go in there and hear so and so really has a problem. We have some complaints from parents. You know absolutely it is this parent that has the problem. Now, they just don’t have enough say. We did have a mom a couple of years ago (you know there are parents who want to know where the money is going). She wanted to run this raffle for us and it was her baby and I said okay, run a raffle. I don’t care. I did say you know we are running an Age Group State Meet and that I need to have workers for the State Meet. I can’t have you pulling my workers away to run this raffle. So she ran the raffle and a lot of people wanted to know where the money was going. I told her it is going for the team. I said we simply need to spend money to run a program. We even just had someone try out for the team and they wanted to know where the money went. My assistant coach called me up, Todd. He asked me this. I have a mom who wants to know where the money goes. I am like, in the checkbook. I mean, what do you mean where does it go? Well they want to know how we spend the money. I said, well, we have pool rent. We have coach’s salaries and beyond that it is none of her business. We are running a business and this is the cost to run the business and this is what we charge for this service and if you think that what we charge for that service is too much then go and swim for somebody else – okay? We have people that we are turning away every year. This is what we charge. It would be like going into a hardware store and saying, well, if I am going to pay you a hundred dollars for this lawn mower, where does that money go? How much profit are you making? Well, it is none of your business – really – so that is kind of the way we handle it.

We try, if we do a big event like that, we try to do something special. Our high school just tore out their pool and rebuilt a new one. So, we helped with the timing system by upgrading the timing system from what they were going to pay. We try to do things like that. You know, we are always buying equipment or something. We can say hey a 20 thousand dollar fund raiser and look at the new pace clock.

Our fees for lessons are right around 8 something a lesson. When we charge for our eight lessons in the summer it is $75. In the fall we just do one day a week of lessons. The way we structure our lesson programs in the summertime is Monday through Thursday for two weeks, 8 lessons. The kids come every day for a two week block. We have four two week sessions throughout the summer. Our evening lessons are two days a week for four weeks and that is going to be $75. Last summer I think it was $70. This summer I want to say we had about 70 kids in the water at a time with about 30 instructors, 25 to 30 instructors. Our ratios are under 4:1. If you just took the number of swimmers, divided by the number of instructors, it is under 4:1. It is over 3:1. I cannot remember what the exact numbers were. Actually I can tell you because we ran a lot more evening lessons so I think we had like 30 total instructors and we had about 20 that worked in the day and about 10-15 that worked at night. Some kids worked both.

Mostly each year we give them a 25 cent raise. If I have a really good instructor we will pay them more. Our site supervisors make about $15 a lesson. Those are mostly my swim coaches that do our site supervision. We do Swim America, I love the program. I know people ask why do you do Swim America and I am say because it is an awesome program that is why and I really like it. They teach three lessons in two hours so they are making around $10 an hour. Like I said, it is good money for the kids and the time works well for them.

I have never signed a coaching contract for me or any of my coaches in my life and I am not going to start now. No, I have never had a contract with my coaches. I do everything by hand shake. Like I said, most of my coaches are kids that swam for me. They know what our structure is like. Some of these kids I have known their entire lives. I have coaches at different places and I am all over the place. My coaches submit their hours to me and they tell me what I owe them. I hope they are being honest with me. Our coaches are making decent money right now. I think our age group coaches make pretty good money and our full time staff make good money. Especially Todd, his salary is going to be tied into our lessons and as our lessons grow his salary is going to grow. He has the potential to be making 70-80 thousand dollars a year if our lessons get that big. That is my goal for him. Who in this room can hire a head age group coach for 80 thousand?

Q. How do you handle health insurance and some kind of retirement and is that something that everyone is responsible for?

No. My fulltime staff we just do it individually with them. If I had a corporate account I could but we are too small right now. I have a business account. It would cost a lot more money to do it that way as a group insurance policy. It would actually cost us more money. My two fulltime coaches are in their late 20’s so their insurance is so cheap that we just do it individually with them through Blue Cross/Blue Shield of Illinois. I pay 100% of their health benefits and it is a PPO. I figure they are not making a ton of money right now so we try to do some of those other things to help them out as much as possible. I do not want to deal with the percentages of it to be honest with you. It can be less hassle just to pay their insurance as cheap as it is so we do that. We do not have retirement, but that is huge for me. My son is at Virginia Military and he is going to go into the military. I have already sat down and talked with him about saving money now. The military is a unique structure in that you can put $25,000 a year away and still have plenty of money for beer and whatever else he is going to be spending it on. So, I am big on retirement. As we start getting the growth and everything I really, really want to get a retirement plan for these coaches because I think it is so important.

Q. Do you have any of your team’s money invested for long-term gains or even short term things like CD’s? –or- Do you keep all of your cash in the bank and just work with it?

We haven’t grown that much cash yet. We really haven’t. Probably part of the reason is because in the summers I think I had 15 coaches working for me. Every single kid who ever swam for me wants to come back and get a job. I am just a sucker for that stuff. The way I spend money is not on me, it is on my coaches. That is just the way I do it. So again, I am hoping that we are earning 2 million dollars a year so that we are bringing in money faster than I can spend. I hired a full time coach before I had the swimmers to support that coach. I really knew that we were going to get this growth and it was an important step. I also thought if I had this little deficit it would force me to work a little bit harder to get over on top of it. It was the same thing with the lesson program. I don’t have time with what I am doing to run the lesson program. I don’t have time to be at our school during the school day and run lessons two days a week and be there every Saturday and every Sunday when we have swim meets to go to. So, I hired Steve Siler to do that for me. He is a training process right now, but I am confident he is going to do a great job for me. Now I can focus on my senior team and on the overall running of our business and not having to deal with the day-to-day operations of the lesson program. That is why we don’t have any money, because I keep hiring people.

Q. Have you ever heard of anyone taking over or buying a currently non-profit or an old organization or does everyone who owns their own business start from scratch?

No. Actually I have heard of coaches that have taken over. Where is Dave Stevens? Is he in the room? I think Dave Stevens did that. I know that I have talked to coaches who have taken over programs. I talked with a team about how it would work if this coach were to take over his program. We really went through his by-laws and looked at it. Basically there were some interesting things, but the parent’s board couldn’t sell the team. They would have had to have given him the team. It would have just been a transfer and then you would have to deal with the money that was in the account. I think this team had about 50-60 thousand dollars in their account. I don’t remember exactly how much it was, but they had a pretty good chuck of money in the account. We had talked about it and I said well, if you did this, you may have to have reduced fees for your membership. Lets say you had a hundred kids on the team and you had 50,000 (I am going to screw this math up, I know I am and I know people in this room know I am going to screw it up too). Maybe you would have to give a $50 a year discount for five years or whatever it is per season to pay for that. We had looked at different ways for this coach to be able to do it and the coach ended up leaving and didn’t do it. It would have been interesting to see the mechanics and actually see that go through, but it is tough from not for profit to profit too.

You know we set up our business as a for profit company, knowing that if I ever wanted go to not for profit it would be easier than going from not for profit to profit which is almost impossible.

No, he wouldn’t be able to own the team. He could be the executive director of the team or something like that and there would be a board. He could probably even set up the board so that it was him and some non-swim team families. There would probably have to be some changes in the charters of the swim team to do that, but it is certainly possible to be done. You just have to get the parents to let go. It is a negotiation. I believe if there is a will there is a way.

Jim Woods told a great story. He bought one of the Olympic Trials pools. He looked at 20 pieces of property and finally the 21st piece of property is the one that I think that he bought. I think that he is ready to roll with that now. Every time he thought he was close to a land deal it fell through. Here you have a 50 meter pool from the Olympic Trials sitting in a warehouse and you are motivated to get it in the ground and you will to get it done. I think that it is a negotiation process.

Anybody else? It depends on the time of the year. This year it is actually at the beginning of the season when we are doing all the registrations and all that other stuff. I am in the office all the time. Then I come back from morning practice. I sit down at my desk. I look at my watch and it is 3 o’clock. I have to be on deck at 3:30 so I have to get back to the pool. I get done. That is the way it used to be with me. I used to be constantly in my office. Somebody calls you and they have questions about your team, well there is a half an hour. Now with Todd and Kelly handling that stuff we are going to move the swim team phone over to their house so that business line is over there. I may never have to talk to one of our families again. At different times of the year when you have registrations or you are getting ready for tryouts, there are a lot of phone calls and things like that. It is a lot of hours. Things will be settling down and I’ll still have work to do in the office. I have to do payroll and pay bills and things like that. There are days that I really don’t need to go into the office at all, especially since I don’t have to answer the phones and check the messages. I have other people doing that at this point. It used to be it was I who had to answer phones. I mean that was how people were ten years ago. Even though there were websites and everything, everybody was still pretty much phone oriented thus constantly on the phone.

Q. Do you have any promotions?

We do. We do advertise in the papers for our tryouts and things like that. One of the things about negotiations with our park district was that because we are kind of their home team we get to advertise our program. That goes out to 170,000 people. I don’t know how many households it is. When Provena Hospital opens up their wellness center we are going to be running all of their water classes for adults and kids. That message is going to go out to everybody in Provena. A lot of that is going to go to the same houses but now we will pretty much blanket our entire geographic area. We do some direct mailing. Now we are at the point that we are really trying to grow the lesson program. We are probably going to put together a direct mailing within the next month to hit all the people that are not going to be covered by those other areas. We’ll start to put together kind of a more consistent direct mailing program for our lesson program.

Q. How much are you paying the park district for rent per hour?

$10 per lane, per hour. When we first sat down I had them convinced that since these kids paid taxes to get the facility built and that they were required to be members (although we did get their membership reduced by 30% or 33%), that they were, by charging us rent they were really triple taxing us. I got them from 10 to 5. Then he went back to his executive director and it went right back to 10. I was a little ticked about that, but what do you do?

Q.) what are your fees for your levels and do you go with monthly, quarterly, or annually payments?

We bill seasonally. I think our senior team is $900. In Illinois, if you are a high school swimmer, you have to absolutely train 100% with your high school team. You cannot train with the club team during the high school season, so they pay I think $500 or $550 It is basically half the season. Then we have our bronze group which is our 8 and unders and some of our 9 and 10’s. I don’t even know what they pay. They pay like $500. They also have a hundred dollars of their fee go to pay for the park district membership. Then I think our next group is like $750.

Q.) how many seasons? Three or four?

We do two seasons. We do a fall and we do a spring registration. Jeff Cooper at Oakland Livewires gave me one of the greatest billing tips on the planet. When we do your registrations you can write up to three checks and post date those two checks. I get the checks. So, if your team fees are $1200 you give me three checks. I think our first registration date was like September 3. So I get a check for September, October and November 3. We hold onto those checks. I have a small fireproof safe that sits on my desk. I throw all those checks in there. Each month I pull them out and I deposit checks. We do not have to run around and chase people for billing. I just found out that Quick Books now has email billing or invoicing so we are going to take advantage of that too. One of the things that I hate the most is licking envelopes and stuffing. When you have all those envelopes to stuff it is way too time consuming. If we can do it by email we will probably do it every couple of months. Then we will do each season. We will send out our bills and we will keep our registration forms online too.

Q.) Have you considered credit cards?

No. We do use credit cards for our swim lesson program. Actually people can go online. Our swim lesson website is swimwithbill.com. You can go online and register and pay with a credit card, but the credit card fees are about 4-5% when you get done with all the transaction fees. I suppose we could tag on something. I just don’t want to charge our families $50 more so I can pay the bank to do the credit cards. By postdating the check the families have the ability to make payments. If the family comes to me and says, hey listen, I can’t pay my fees right now. Can I pay you back next month and can we extend it out six months? I go yeah, that’s fine, until you rip me off. You get burned occasionally on something like that, but you know, it is very, very rare. I am going to give people the benefit of the doubt if they need help. We had a family of a swimmer who had been with us for a few years and they were in really hard financial times. He was a full year back in dues. Now he has finally gotten those caught up. All I needed from him was I am working on it, you know, just the communication. It was when he didn’t talk to me for six months that I got nervous, but you know, we got those fees back. We will help families as much as we can.

Q.) Do you offer any scholarship programs?

No and part of that is because I don’t have an infrastructure like the schools do. So I just have not done it. We have never turned a swimmer away. We did at one time we have a family that could not afford it. In fact we had a couple of families so we went to some local business owners that I knew and got them to support them with $500. So we have done that.

Q.) Do you have sponsors?

We have one sponsor. McDonalds Corporation sponsors our meet in January. One of the big things they give us is those little food cards for our meet so if a kid wins an event they get a value meal or they get a burger or something like. So we fill them with poison after their races, but they are a local McDonald’s. They are our sponsor. If we had a boosters board I think they would be better equipped to handle that and get out there to the community. To be honest with you, I am a little uncomfortable with getting a lot of sponsors. You talk about raising fees to pay your salary and then you are like, hey, give me some money. I would just feel like a beggar doing it so I am not comfortable with it. Maybe I would feel comfortable if our booster board wanted to do it and they felt that they could generate some money or do scholarships or other things. If there was a reason to get the sponsorship money we would probably do it.

Anything else? Alright, thank you very much. I appreciate your coming. Thanks.

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