SwimAtlanta – Our Business Model by Chris Davis (2007)


Published


Let me just give you a little brief history of Swim Atlanta. We started in 1977 with 25 swimmers; just wanted to do some summer league programs and did some clinics. The starter team, we were supposed to have our first indoor pool and we weren’t able to get it so we trained the whole first year outdoor, the coldest winter in history. That was a pretty tough year. We were getting up at 3:45 in the morning. Picking kids up for morning workouts, driving them back to school and then going to our regular jobs and going back at night to coach, getting to bed about 11 o’clock. That lasted for about a year. I only say that, not so you will go wow, but for two reasons. One, so you know it is possible and two, if you go out on that kind of a venture, it is hard. It really is. You have to put a lot of work into it and you pretty much have to do whatever it takes to get it done.

We currently have five locations, soon to be six. We are building our sixth. I said we started with 25 kids, we are up to about 1700. Of course you can do the math. That means 3400 parents and everybody knows what that means. Our first year at Swim Atlanta, we thought we were being great, even though we lost money. We grossed $35,000. We currently are 3 million dollar company, so we have grown a lot and done really well. Two million that is probably off of the swim team, a million dollars of it is off of lesson programs.

Our lesson program is extremely important to us for a couple of reasons. One, for the revenue side of it obviously and two, it is just a great feeder for the swim team, so those things I think are very, very valuable.

Let me just try and say a couple of unique things I think about Swim Atlanta and I am going to leave it to you guys to ask questions. Because we are not really a whole lot different than probably your club situation other than we are coach-owned and run. We are a for-profit company. We do have a part of it in a 501C3 that we channel any kind of fund raisers through, which we do not do very much of at all. We don’t have to. We have got it kind of set up so that our parents do not do fund raisers. They like that a lot.

I get asked a lot, how did you choose your sites and basically our first site, we had no choice. It was an SBA loan and kind of hooked up with a gymnastic center and we just ended up putting the pool in that location. Since then, we take a map and put it up on the wall. We flag every summer league team and we stick a swimming line in the middle of it. Hopefully, within a 7-10 mile radius, we have anywhere from 1000, maybe 2000, summer league swimmers to recruit from. That has been very valuable for us.

The second part of that is that we have never tried to build a Taj-Mahal. We have built smaller locations, convenient. If anybody has ever been to Atlanta convenience is HUGE. It is kind of like a restaurant that maybe isn’t the nicest in the world, but it has great food, great service, maybe a little ambiance, I don’t know. But people will go to that place and I think if you have water (that is all you need obviously), if you are coaching and you have great coaches (people that are good with people), people are going to come back. People are looking for places to put their children and if you do the right job with those kids they are going to stay. If you don’t do the right job with those kids they are going to go to soccer. So for us in Atlanta, it is a hugely competitive environment for other sports so we work really, really, really hard to try and get the kids to stay in the sport of swimming.

Probably another unique difference is we have 18 full-time people right now. Eleven of those are former swimmers which is pretty cool, so we have been able to keep people in the family, if you will. We pay our coaches uniquely different and I do not know if a lot of you would be in favor of that or not. My coaches like it because it is a built-in raise for them. They are paid per head, per facility. So as the numbers go up in the facility, their pay goes up. Now if there is ever a facility and we have one that is full, then the way they get raises is that I add the per head price, but that way they are in it with me together. If they are not doing a good job, their numbers are going to go down. If their numbers go down I lose money and they lose money so they have a real interest if Johnny doesn’t show to call him. Call the parents, “oh my gosh, I missed Johnny, we are so sorry where has he been? We can’t wait for him to come back.” You would be absolutely amazed at how far that goes so we pay our coaches that way.

I don’t have anybody who is on salary and we keep coaches around. I have got coaches who have been there for 15 years, so they don’t leave. Maybe that is because it is not parent run, it is coach run and you do not have a changing of the guard and we stay pretty consistent, but I think that is valuable. We probably are ahead of the average too in what we pay our coaches, one. And two, we don’t burden our coaches with a lot of paper work. We do that in-house over at the location that I am at. We let them coach and I think that works pretty well.

The other part of it is, I think we hire coaches good with kids. I would rather hire someone that is good with people; I can teach them to coach. I don’t want somebody coming in that is just going to be really, really, really tough on the kids. They will get kids to go fast, but they are also going to run a lot of kids off. Now the way we prevent that is if they are going to run kids off their salary is going down, so they will think twice about doing that.

Our attrition rate, I don’t know if there is a national average for attrition rates for a swim team? I think ours is lower than that. I don’t know exactly, but our numbers continue to grow every year so this 25%; do we know what it is in other sports? It’s hard to know that. That seems high. I would say we are not doing the job if we are losing 25% of our customers. If we did that in our pool management side of what we do we would be in real trouble.

We never, and again this is probably something unique to us, we never take it for granted that our numbers are going to be high. We work very hard at it during the summers, which is the worst time of the year because you are running doubles. It is hot, but our coaches go out probably two or three times a week in the evenings to summer league meets. After they coach in the morning they go out and do free stroke clinics at the summer league teams. We get rosters from the summer teams. We do mailings. We go to the County Championship meets. We offer a $50.00 referral to any of our parents that bring non-USA registered athletes to the team. We offer $50.00 to the summer league coaches who bring kids to the team and I have written checks for over a thousand dollars. People have brought me over 20 kids; money well spent. If I keep them after the first month we are way ahead of the game for two reasons. One, we obviously have more athletes to work with, but two, we are generating more revenue.

The way I learned that lesson was really the hard way. Our first Olympian was Doug Gjertsen, some of you guys will remember him. He still coaches with us now. He has been there for 14 years. When he made the Olympic team I said “That’s it I have arrived. I can just put my feet up. You will not see Chris Davis doing another stroke clinic in a summer league team. You will not see Chris Davis on a Thursday night going out to a swim meet until 9:30 or 10 at night. I am just going to kick back, put my feet up and just let them come through the door.” Our numbers went down that year. We lost money that year.

I don’t think parents care about the greatest swimmer that you have got in your program. Parents care about what you are going to do for their child, end of story. It’s nice. I would say “Well, you know, did you hear? We just had Doug Gjertsen make the Olympic team.” “Oh that’s great, what are you going to do for my child?” So if you take it for granted and you sit back, I don’t see how you feel like your numbers are going to go up. You have got to be extremely pro-active and get out there and hustle it.

Again it is the time of year, at least for us, it is very busy. It is not fun to do it. The last thing in the world I want to do after a double, being up since 4:40 or 5 in the morning is go to a summer league meet until 10 or 10:30 at night. But I think it is extremely important if you want to continue to be successful for two reasons: obviously, your revenue goes up, your numbers go up. You have got better athletes to coach, you have a better group of kids to maybe potentially get that one fast one that does make the Olympic team.

The other thing that we do is we offer a $50.00 referral to our pre-competitive lesson teachers for every pre-competitive child they move up to the team. As you know, just like the summer league coaches, the people who are teaching lessons have that parent’s ear. If they say, “On my gosh, Johnny has got so much ability, so much talent, you really ought to get him on the team.” People are looking for places to put their kids if people will take an interest and of course our instructors do have an interest in doing it because they make 50 extra bucks for everyone they move to the team. So those are some of the ways that we are able to keep our numbers up and to be able to get them up as high as we have. We also do mailings.

The other thing that I think is extremely important, and it took me probably a while to learn this lesson, is to never burn a bridge. And that includes your athletes because I have a lot of kids that were never at the level that they were going to be at Junior or Senior Nationals or Olympic trials or international meets. But I think by treating all those kids the same as you treat the one that is your stud, those kids will come back to help you one day. The way these kids come back to help me is a lot of them end up being the coaches for the summer league teams. So if you are great with them, they will work very hard to send you kids back to your program. So I don’t think you want to burn a bridge with the kids. I don’t think you want to burn a bridge with the high school coaches. I don’t think you want to burn a bridge with the summer coaches. Sometimes it is unavoidable with parents, but as best you can don’t burn that bridge there either.

Which brings me to the parents, which is the last thing that I think are very different at Swim Atlanta. We have no role for the parents. The only role for our parents is they are to support the kids, bring them to practice and stroke the check. I think our parents like it that way. Pat was at Dynamo Swim Club, way back when we started and the two were very, very different. They have a very, very strong parent group and we actually lost some people to Dynamo Swim Club that wanted to be very active on the swim team. I would venture to say probably some kids came over because they didn’t want that kind of mentality. I think it’s more of the people being so busy, and less that they want to get involved.

We have no fund raisers. We do an Aqua-thon, but it is completely optional. Any money they raise they get to keep in their individual accounts for themselves for travel entry fees.

One of the other things concerning parents; I think it is extremely important that you continue to keep that business relationship, that you don’t get personal. Even at my age, I know I look pretty young, I don’t care if it is a 30 year old mom , I call her Mrs. and the dad Mr. Never call them by their first name, ever. And I know that is hard because they always invite me to do that. But I think it just keeps that professional relationship and it keeps you from getting into trouble if you get too familiar with the parents. Because if you do, they are going to call that marker in some day, I can guarantee it. And you are going to have to end up crossing that bridge and it is going to be a really tough one. And there are going to be a lot of hard feelings when that happens. Again, personal experience, I learned the hard way. For me, I really, really promote my coaches doing that also. I had one coach who recently didn’t and he came back and said, “You are right,” because he had some hard times with this one family. He took tickets from them for football games, went out to dinner and went over for the weekends and that is great, but for me, I think you are better off just to keep it straight professional. I think you will end up being a whole lot happier that way so our parents really don’t do a lot.

Now, when we run swim meets, and we do, at RLSC we have told them whenever there is a need to run a swim meet we will step in and run it. We have parents that volunteer to do that. The way that we are able to fund all of the coaches’ expenses to swim meets is out of our amateur swimming foundation. It’s our 501C3 of what we do and the way we were able to do that is that we just tack on $5 whenever anybody does an entry. So you enter a swim meet, if your entries are $18.00 or $25.00, we tack on another 5 bucks so it is $30.00. They never have to do a fund raiser and that is enough money to send all of our coaches to swim meets. It is about $25,000, $30,000 a year for their per diem, hotel, and transportation. That has worked great for us.

Our parents love it. They are not selling cookies or M&M’s, or doing Aqua-thons, bingo or whatever else. For us it has been great because I think people are just so busy today, just so many things going on, they are going in so many different directions. I think the less you can burden them with that the better.

And I will leave you with one last thing and then I will answer questions. For those of you who are considering doing this I would highly recommend it. I have been at Swim Atlanta for thirty years and I can guarantee you I would not have been in the same spot for thirty years if it had been a parent run club. Is there anyone here who been that long at one parent-run club? Who is privately owned? That is awesome and how many years have you guys been there? Yeah, it is a whole lot easier when you go into a meeting with a parent and you know that at the very end of that meeting the worst that is going to happen is they are leaving, not you. And that is a great position to be in. It is an awesome position to be in and yet, you are not trying to lose them as a customer. Obviously, you want them because you like their kids, and you want them to be there because they are generating revenue for the club. So again it is a little bit more of a business approach I think, but you know when it gets down to the bottom line it is a business.

One last thing; years ago, for some of you that are thinking about doing this and maybe are a little hesitant about doing it, there was a friend of mine, Mike Eddy, who was a very, very good coach in Denver. He ended up having 7 kids and couldn’t make enough money so he is a stock broker in Atlanta and he is hugely successful; probably manages 800 million to a billion dollars worth of money for people. Mike has been hugely successful so I called him up one day and said, “You know Mike, you deal with all these multi-millionaires on a daily basis. Give me a common denominator; give me something that separates them from the rest of us.” He didn’t even blink, and he said “Willing to take a chance.” And I think that is true, you have to be willing to take a chance.

I know when we started Swim Atlanta, my partner and I sold everything – everything we had. Cars, houses, we would have sold our wives, children, it wouldn’t have mattered. They would have been gone because we were so focused on trying to make Swim Atlanta successful, so, it can be done. Really, my partner and I were nothing special, truly. We were just regular coaches like you guys and we just were willing to work hard enough.

We were in a great situation in Atlanta. Pat will tell you; there are 35-40 thousand summer league swimmers in the metro Atlanta area so we had a huge recruiting base and that helped a ton obviously. So, I think if you are willing to work hard and you are willing to take that chance, you can do it and I think you would be very, very happy for doing that.

So you guys ask some questions because I got some time here. Go ahead. We own four of them and we rent two. One of them is Georgia Tech, so we have a satellite program down at Georgia Tech. Then we have a bubble over our Cobb location and we have been there for like 15 years now. This most current one that we are going to build is actually going to be in a kid’s village, a shopping center. And our 50 meter pool is also in a shopping center which is great because we get a lot of walk-in trade. The unique thing that we are going to do about the new Hamilton Mill location, which is our newest location, is we are going to make that a 12 and under only facility. Then as they get better they will have to come down to our Sugar Loaf facility, which is about 15 miles from there. So we are going to try and hopefully we can kind of get them in the door, get them into sport and then we are cutting off our recruiting area a little bit from Sugar Loaf.

The other thing that we are doing is we have put in a parent observation and waiting room for the lesson program. We are trying to make it more user friendly for the parents, with a one-way mirror so they are not standing on the deck, interfering with the instructor in the water. We did that, we retro-fitted that with one of our other facilities and it has been unbelievably successful. The parents love it.

Yes? Yeah, they are in-ground. They are all in-ground facilities, gunite pools or concrete or whatever, with plaster. We put a bubble over one and of course at Georgia Tech we rent and that is in a 45 million dollar facility so that is a pretty nice place.

We are an S-Corp. We were originally a C-Corp. (???) limited and actually maybe six or eight years ago I had somebody come in and offer to buy (???). At that time I was kind of tired and had a not cruddy group of kids, so I entertained the notion and I found out that the C-Corp, the tax ramifications are awful. This I did not know originally when we started Swim Atlanta thirty years ago. So you can pay as a C-Corp; you ended up paying taxes as a corporation and then you go and pay personal tax if you end up selling it. So I went to an accountant and he said “You are going to have to do an S-Corp,” so we have kind of retro-fitted to an S-Corp. Now you are supposed to, there are no IRS Agents in here are there? You are supposed to go ten years before you can sell it with an S-Corp. And the plus about being an S-Corp is that you do not pay the corporate tax and everything filters down to you. So if you are an S-Corp and you own the facilities you can depreciate the buildings, you can depreciate the equipment and it all ends up going to you. That really helps you on your taxes so we have since gone to the S-Corp. We are only our second or third year into it, but it is my understanding if you go four or five you can kind of get lost in the shuffle and you don’t have to go to the ten. But that would only be if we ever end up selling and I guess that is possible down the road, I don’t know.

But let me say one other thing. To make it affordable to build these buildings, originally we ended up building all the pools ourselves and that is not hard. Our pools are all skimmer, they are not gutters and that is 30% less expensive to build them and really, now it is easy.

Because we have 30 year track record and like I said, we are a 3 million dollar company, we therefore have banks that are interested. Originally, the only way we were able to do it was through an SBA loan, small business administration loan, and that is where a bank participates with the government. Back then the government guaranteed 90% of the loan so the bank’s exposure was only 10%, so what did they care? They were in for the loan. Now, I think it is 80/20, but if you can do an SBA loan it is a great way to be able to get some money. They put you through a ton of hoops to get it, but swimming pools are so atypical. Your bank is going to look at it like it’s a warehouse. If you dug a big hole, then you got a lot of water in it; if you go out of business what are they going to do with it? It is a warehouse. They have to come in and fill it in, concrete it over, and then what do they do with it? So, that is pretty much how they look at it when you are building a facility like that.

But anyway, going back real quick to building the pool, it is not hard. I went to South Central Pool Supply, which is a pool company in Atlanta and said, “Who is the best guy that you work with that digs pools?” Well so and so called so and so up and I said, “Who do you really like to cage your pools? That is, putting all the metal in and the plumbing.” He said, “Oh man I won’t work with anybody but X.” So I call him up; “Oh yeah, love to do it.” Then you got your concrete guy, which is not a big deal, and then you got somebody that puts the tile on and the plaster and you are in. Somebody will have to set up your pump room. It really is not that hard to sub it out. Our 50 meter pool we got bids of 375-450,000 dollars to build. We ended up building it, plus a separate 35 x 20 teaching pool and the pump room, heaters and everything for $240,000. Saved us $150,000, which was huge.

Q: How long ago was that? Five years ago. So, there is a lot of markup and actually I just re-shopped during the newest pools, just because it was going to be a six lane, 25 yard facility. I re-shopped it to see if I could just go to a one-stop shop and not have to screw with all this having to coordinate. We could have even been the general contractor at that point and it was $15,000 more just for the shell, so I thought for $15,000 I can make a few phone calls.

Yes? Yes where the 50 meter pool is, it is in a shopping center also, we have a 50 or 75 year land lease. I figure by then I am not going to care, it wont matter to me.

Q: Are all your pools covered? Covered in terms of a building? Yes, an air structure, we sure do. That is the other thing that we do, I don’t know where you guys are located in the country, but we cover our pools every night. You save 30-40% off the utilities. You will lose that much to evaporation and heat. You lose more heat through evaporation than you do radiation. So you just cover those pools at night. And we just use those little solar blankets, the blue ones with the bubbles that you can get for $75. We just go short course with them and the kids put them on and take them off and our gas bills are way less than before. I know Mecklenburg Aquatic Club because I know Jeff Gaeckle there pretty well, we will compare notes. I know for a while at Dynamo Swim Club, we were way under them. They now cover their pools. It has made a huge difference.

Did you have a question? Brand is a great idea. You know, if I say the word soda you usually think coke, if I say a tank suit you would think Speedo, even though TYR and Nike would not like you to think that, so we advertise some. The other thing that we did is we came up with those license plates and I give those things away free in order to make sure that people are putting them on. You can go anywhere in Atlanta and see them. I have seen them as far as up in Maine when I have been up there, on somebody’s car. It is kind of cool to see your club on a car when I am running or something. The way that I got people to do it, they are not just going to do it we do a drawing every month for a hundred bucks and if you have a license on your car, or the magnets, you can do either one that I give away free. I don’t sell them and I figure if they are willing to put them on their car, it is great advertising for me. We do a drawing once a month for anybody that has got it on there and then we send them a hundred bucks. And every year we have a time trial meet we do in September, we have the magnets and license plates where they buy the heat sheets and we explain what is going on and all the new people stick them on their cars.

And what was the second one? Probably the easiest way for me to figure out is by the number of complaints I end up getting for whatever reason, whether it is a swim lesson mom that is ticked off. We put 12,000 kids a year through the lesson program and they can’t get what they want through the swim school manager, somehow I end up getting them, which is extremely pleasurable. I think you can garner knowing what is going on by how your numbers are doing and the amount of complaints you get. Years ago one of our locations when we started back we were 45-50 kids under what we had always been and none of the coaches seemed to know what happened. So I got the list of 50 people that had left and I called every single family and said, “This is Chris Davis with Swim Atlanta. I see you are not with us this year. Would you mind sharing with me what we could have done better to keep you with us? I am sorry you are not with us anymore, I heard you are swimming at Stingray’s or Dynamo’s.” And every single one went to this one coach so I pretty much knew then – under quality control I fired him.

Before, I was not, everybody was on a salary. I was not set up the way we are set up now so I think by the way it is set up now, my coaches are more interested in going out and doing the recruiting, because they know if their numbers are down they are not going to make as much money. Or they also know if their numbers go up they can make a lot more money. So I think from that standpoint that has worked great for us.

And let me say one other thing too. On the lesson side of what we do, if I end up with a bad swim school manager, and occasionally I do, that year it might be okay, but our next year is awful. Our numbers will be drastically down because the word of mouth out there is that we run a swim lesson program at one of our facilities. If you get another good swim school manager in there and she does a great job that year, then the next year is a great year so it is so important that you get the right people that are working with you and buy into your philosophy.

Did you have one? Yeah that is hard to do, only in that, she wants to know the range of what you get per head. Basically, I look what the market should be for a coach. I looked at how many numbers at our facility, I looked at how many numbers I thought was our peak. If they matched, if they really went out and worked at it then I just kind of backed into that. That way, if a good age group coach should be making 35 – 40 thousand based on our numbers there I might start them just divide them by that many numbers and it is an average. They pay in 9 months for 12 months of swimming, which works great for us because then all our kids do not go back and just do straight summer league because the parents already feel like they have paid for everything. So then we stay in touch with them and then our bills are ongoing during June, July and August so you got the money there to pay for them so I think that works pretty well.

Yes sir? From the concession, now I made a mistake and let a parent weasel her way in and help us out on a voluntary basis initially and then she worked more and that was a huge mistake. I am a 12-14 hour a day guy. Well, it was just I and my partner, that is why I had to work those other jobs because we were losing money. And we were outdoors and the gas bills in the coldest winter, we were struggling big time, but we don’t – and I think our parents like it that way. I think I really do because the way I looked at it is we are selling a product. Our product is swimming or swimming lessons and if they are not pleased with the product they are going to come and see me and then I can explain why the product is the way it is and they may have a very valid point and they may not. But we are always trying to learn to make our product better and make people happy, because obviously we want them to stay with us.

Yes, pro-rated, and you can because then that gets expensive in February; you can then carry it out maybe through June. Add another month on so the way you would look at it is 9 months over 12 months. You would multiply that number by 9, divided by 12, that would give you your monthly and then you just divide that by the extra months that you have. You can make it work and we have a sheet for different months so you can immediately say “This is what your fee is going to be.” I mean, they might get it by the time you figured it all out and there might be a half month or something, but we don’t stick them with that. I refund them, no questions asked. We offer a 10% reduction if they pay in advance and you can see from the brochure that I brought how our fee structure is and how we have our set up. We have tried to be creative in our 6 lane, 25 yard pools. We have got 250 – 300 kids out of some of those pools just in terms of scheduling and that works pretty well.

Q: For a small town we have got in the area of probably 12,000 and if we, expand out into other swimmers’ areas we probably would end up with maybe an area of 18,000 to work with for our young kids. But we have been around for 48 years, private sometimes, but you can’t run more and very family-oriented for such a small area. We got it started and what you said about parents being so busy these days, I am very lucky because I got a dozen moms helping me and I now manage the women’s swim program in the summer. I run the treasury, the membership, I do the billing, payroll, and I screen calls due to problems, in addition to all the head coaching. I hope they are paying you a lot. Right, and my pay has not gone up in four years. We have a large grant present with AT&T. They help out a lot so if we went private and not know the way because they only make grants to 501T. Well you could be a 501-C3. What I was going to ask is the transition, first of all, because of the long history, how would you go about that. To this board, who has been around for so long and say we are going to take 501-C . Typically, in a 501-C3 or a non-profit organization the only difference between that, and a full profit organization is you have a Board of Directors that does not get paid. That is the major difference, but then the Board of Directors still control the hiring and firing of you or anyone else. What I want to know is separating that out- or so, yeah, the head coach could be on the Board of Directors and you are paying yourself then. That works, but I probably would have a profit part side of that. Then you own it and you control it. You know, an S-Corp is not very expensive to set up or an LLC, either one, whatever works for you.

Bob? We have them in four of them. Two of them we do not and we will have them in the fifth. Like I said, we run through about 12,000 kids a year for the lesson program so it is huge for us and our swim school manager is set up exactly like the coaches. They get a base salary and then they get a certain amount of dollars over a certain amount of kids that come in and then they are tied into the net every year so if they increase the net they get a percentage of that, so they are very interested in every dollar that is spent also.

Q. Are you the CFO as well? Yeah, I guess. I have a girl that works with us that logs in all the checks and stuff. You are talking about 1500 checks a month, but yeah I control it all. Well I end up paying service – I have to code my checks every month. I send them off to someone and then they make sure it all balances and they let me know how far my checking account is out of balance.

Q. At what point do you ever pay for that kind of service? It is not all that expensive; it really isn’t for what they do. For us, and that includes payroll because they do payroll for us also. I think it is 5 or 600 dollars a month. It is not that bad because I do not write that many checks and we only do payroll twice a month so it really isn’t that bad.

Yes? Yes, each facility is probably very similar to all of yours. Like an island unto themselves, except that the head coach has age group coaches there. They have a lesson program there and they pretty much have autonomy to run that location unless I start getting a lot of complaints and then we sit down and talk about why they are doing what they are doing or what they may need to be doing differently. I am pretty patient with the coaches – I want them to succeed and to do well.

Q. Do you offer health benefits and 401k? We have a 401K and we match .20 on the dollar for the 401K. That has just been probably the last ten years and then we pay a certain percentage of the health insurance if they want to get on with us. Luckily, we have a pool management side of what we do. We are in 18 different cities and probably 50 of those people in a different city got onto this one group plan and we were able to piggy-back on that because it is expensive, everybody knows it is expensive, that helped us a lot. You have to be fulltime to get that.

Q. How many non-coaches or non-teachers do you have? How many non-coaching and non-teaching? Well, Emily is one and we have some people that come in and clean, two? It’s not very many. At my facility, probably like you guys, if there is a toilet that is clogged, I go down with a plunger. If the person did not clean the night before and I am the first one in, because a lot of times I am, I clean the bathrooms. “Swim at your own risk” we don’t have any life guards. Now, we have it posted, “No life guard on duty” and just recently we do not let anybody under 16 unless they are in a lesson program, because we had a couple of problems with little kids. We let them come in free to practice and then we do not let anybody under 16 just come in and play. It is just not worth it, because the parents just drop them off for a baby-sitting service for $3 and they just run wild.

I am glad you mentioned that and I had almost forgotten; we have the lesson program that is ongoing. We have hydro classes. We have lap swim. Two years ago we started a home-school program. Some of you guys may have already started that too. And what we did is we offered the home school program in the middle of the day. It starts at 1 o’clock, goes to 3 o’clock. We offer them a reduced rate, kind of like off-season rates, and we went out and hustled the home school. At our location in Sugar Loaf we have somewhere between 75–100 kids now just in the home school. They like that for two reasons. One, it doesn’t mess up their day. Everybody can be home at night sitting down to dinner at the same time and with the swim team kids that never happens. The other part is I found that home school parents want home schooled kids around other home schooled kids. They do not want them around the public school hooligans so by offering that, we started I think our first year at 30, but we are closing in on 100 and it has become hugely popular. And again they get a reduced rate because that was dead time for me anyway and we have probably almost 100 at my facility, 30 and 40 at the other facilities, so that goes into our numbers.

Q: What about insurance? We have that and the way we have it USA swimming insurance covers all the kids that you have. But then we have an audit every year where our insurance company will come in and we can separate the dollars from the swim lesson side to the swim team side and then we end up paying a premium on that insurance. Then we have professional liability insurance, also. Again, we piggy-backed on with our pool management side of what we do so we have some pretty high premiums, but we also have some high increments, like 3-5 million dollars.

For the home school, what we did is, every one of you will have some home-schooled parents or kids that are in your location. Go to them, it seems like you have one or two driving forces in the home school. It is almost like they have pods, kind of like orcas. They do their little things all together and if you can get to that one mom and she will buy into what you are doing, she will do it all for you, she will hustle it for you. She will tell everybody it is a great idea, “I will drive,” all those sorts of things, but that is what we did.

We really didn’t. They do have some web sites you can advertise on which we did, some home pages and stuff. We got some kids from that and then after our first year, those kids went back and did so well at the summer league level they romped and stomped. So we were absolute heroes and all their buddies whose fannies they were kicking now wanted to join, so it really took care of itself.

We are all lumped in together, so if you are coaching red and blue teams your numbers are based on the entire program at that location. Yeah, we went through that. That wouldn’t be fair because I wouldn’t want to move my kids up because now I am losing money and this other guy is going to get the money, so no, we are all in together. That means everybody gets in there and works together and tries to get at each site, each location is separate, right.

Yes? Not for that part of it, no. We just don’t do it, swim at your own risk.

Yes? The PE part, yeah. It is a great source of revenue, it really is and they are just out there waiting for something to do. So if you go out and hustle, your numbers will go up.

Q: For the part-time coaches, you have to pay them hourly? Yes, hourly, the part-time coaches are paid hourly. They are not on the other.

Yes? We do have it, it is not as large as I would like it to be. At our location at Sugar Loaf we probably have 50-60 people.

Q: How do you ensure that your part-time coaches are doing their job with the team coaches? The head age group coaches would watch that, but at least at our location, again, I think it takes care of itself because you will get the complaints, or your numbers will go down. And if you look at the numbers going down, we have rosters. We generate rosters for each location out of our location. The rosters come in once a week and Emily, who works with me, will tell me “Blue team at John’s Creek is way down, they just lost 15 kids.” Well then I get on the phone and say, “what’s going on?” So we get pretty pro-active and find out pretty quickly and then again, I am not above calling some of those parents and saying – “why aren’t you still swimming?” And the one time that I did, everyone said this particular coach made my child feel awful about themselves so then I end up firing him and he had a core of 35-40 kids that ended up taking to another location. They thought he was the greatest thing in the world. Since then, I have instituted a non-compete and all of our people sign that or they don’t work with me. The way that we have got it set up I think it would hold up in a court of law. Plus my pockets are deeper in terms of if it goes to legal, than probably the coach’s would be.

Q: Do you have a contract with each of the families? For the families or for the coaches? No, no contracts. It is month to month. Like I said, if we have somebody who comes in and pays for the whole year, and half way through they pull Johnny out, we refund the money. I would much rather, even on the lesson side, and even though I butt heads with the swim school managers on this; I would much rather refund the money. Even if those people are being idiots about it and have them at least being out there not saying awful things about us, it is just money well spent.

Q: What is your goal? Like, what is your numbers goal? Do you have a plan to grow and grow? As Atlanta is growing, I am growing. It seems like what I have done, and I may have done this subconsciously; as Atlanta grows and as most communities grow, they grow North. And as we are growing North, I don’t want someone to come in and trump me so I add another location North. So that is what we have been doing. I have always protected my flank by putting up another location before someone else does. At some point in time, I am going to get tired of that and not want to do it because with this new location it is going to be just in an unbelievable location. Just zillions of kids. The average housing, the junk, the double-wides, the stuff you wouldn’t want to live in up there is $450,000. So it is in an area where they can certainly afford and there are just zillions of kids so I think the numbers are going to go way up in that location.

Well, I mean we have some people that will come in and help. On the time trial we do not even make it an approved meet. We just run it, but we will put in electronic timing and we got a parent that will start the meet that likes starting it. The other meets that we end up running, one is the Betsy Dunbar. She was a lady that died years ago and everybody loved her so everybody volunteers for that meet in her memory. Then when we run the State Championship meet, the LSC sends officials for that and I sub out all the computer work to a guy and I end up paying him for that. It is really business-structured, running the swim meets. I don’t have to make money running swim meets so if I can break even I am a happy guy. Then we help the community a little bit so I know that a lot of people have to run meets for their budget so we are just in a different situation.

Yes? He asked “Do we have swimmers jumping sites?” We do. They have to clear it with their existing coach first depending on the reasoning. I think there has only been one time that we disallowed it and that was by me years ago and probably now I wouldn’t care. We do have that and you have to be careful, especially if it is higher level kids. A kid gets upset with the head coach, he is trying to do something, “Well I will just go over here and swim.” Usually when that happens they just show up and I will call the other head coach or senior coach and say “Hey, Johnny showed up at the pool, what’s going on?” “I threw him out of workout, he was doing x.” “Well, what do you want me to do? Do you want me to let him swim or you want me to throw him out and tell him he has got to talk to you?” “Oh well, let him swim, but tell him he has got to come back to me before he can go back to you.” So that is how we handle it. We just communicate really well.

Yes? No, they are all under Swim Atlanta. Correct. So when we go to a meet we are one team. They are all registered. You will have kids who will never go to a meet during the year, they are just there to try and get better for summer league so that they can be a stud next summer. So they won’t do meets or they might do one meet or two meets. Obviously their coach encourages them to go a meet because that is the only way you can really tell if you are getting better and the parents can tell if they are getting better, but we don’t put any heat that they have to go to meets. But they all have to be registered because of the insurance part of it.

Yes? We used to and then Atlanta traffic has gotten so awful we had people that just couldn’t show up. There would be an accident or something so we just do it on the phone. We get on a conference call once a week and then we just go over the things that we need to go over. Typically, on those, I try never to trump the coaches. I am one vote. If it is on the money end of it I can trump depending on the expenditure, but if we are voting to go to X meet or we are voting to shave at this meet as a team, I get one vote on that and I think that has worked pretty well. The other part of it is since each location does its own thing at that location, I do not steal their swimmers. I would look like a really good coach, I don’t mandate that every good swimmer from each location has to come and swim with me. So that senior coach gets that really good swimmer and takes that person all the way through, like Kathleen Hersey right now is in our Roswell location and she stays there and trains with that coach. I think that is how I have been able to keep coaches around.

Well yeah, if you look on a per group basis and you are looking on a per hour basis, which I have done all that, you are right. The red team, the blue team pays a much higher rate than say your senior level or national level kids. So I guess in part, a little bit, they are funding it. The lesson program is huge for us and we usually net about 50 cents on the dollar, the way I figure it out so that does go into the kitty. We would not be nearly as profitable without the lesson side of the program. And I have done that for two reasons. On the hour thing, when someone comes to me and says “I pay you so much money and you know it is so expensive if you go on an hourly basis” you go “Whoa you are not paying anything.” You are not even paying as much as it would take to go and play putt-putt golf. The attrition rate has kind of taken care of itself. We have enough kids that filter on through to the higher levels, but they do not get over-full. If they did then we would create another program for them, but you can see, I don’t know if you got a brochure or not, it has just worked. We have not had that problem. We really haven’t.

Q: What do you do for Swim Atlanta when Chris Davis is not there any more? Well, I have got two sons that are coaching with me; I don’t know how interested they are going to be in putting in the kind of hours. You know, you just do it for so many years and, you just do it. I have done it for so long I don’t know what I would do, really. So I think there are a few people around the country that I know that I have had a long relationship with that I know could come in and run Swim Atlanta if I just showed them; it almost runs itself. It almost has a life of its own and I just kind of clean up behind it. It has almost gotten that way. Anything could be for sale. Like I said, we had that one offer and it wasn’t that great of an offer for me to end up selling. You would probably be smarter to bring someone in to run it and then you just occasionally come in and go “Well in the good old days we did this” and then at the end of the year you get the profits.

This might be outlined in the hand-outs as such, but you run your learn-to-swim program when? Regarding their practice, does it take certain hours? Yeah, we run them from in the morning through the evening and we give up lane space and we do have our swim school managers and our coaches fight over water because that is how they make their living. So a lot of times when I have problems, I am refereeing that fight between them, but we are able to schedule it and make it work. There is only one location that we have a waiting list on the lesson side in that location and we also have a waiting list on the team side. It is a great problem for us so that is the only one that we really have a really, really bad problem. And then the other way I look at that though is, I will look at that lane and see what I can generate. On the lesson side on how many numbers they run through, or I put the swim team in there and how much money that brings in. And then it is kind of a no-brainer; whichever one can generate the most money then that is the one you go with.

Q: And how do you staff that? The lessons? My swim school manager hires and does all of that.

Q: And normally what sources of? A lot of it is our own people. What we will do is, especially some of our older kids, they are 17 or 18, 19 years old when they come back from college. We will piggy-back them or co-teach with our best teachers so that they are learning the way that we want to teach. Then once we feel like they are confident enough and good enough to do it, then we turn them loose with the class and that works pretty well for us. Is that what you are asking? Okay.

Q: Do you guys offer private lessons? Yes and no and the no side of it, he asked if we were offering private lessons. We do at one location because she has been able to really watch it closely. I will go around on Sunday sometimes and just check the different facilities. Or I may end up mowing the grass at one of the facilities, whatever needs to be done or fix something that the other coaches couldn’t do. And invariably what has happened is I have gone there three or four cars and one instructor is there and they are stroking a check to that instructor for private lessons and that instructor does not understand that to my way of thinking, that is stealing. It is. So, it got so bad for a while we just totally did away with private lessons, but in this one location, she has been able to come up with a system that it seems to have worked and I go to that location at different times just to check and it has been clean. So, there is a lot of money out there for the private lessons. We do no private lessons on the swim team side. We get asked for it a lot, but we don’t do it. For me, if someone asks me for a private lesson it means I am not doing my job so I will bring kids in on Saturday or Sunday on my own time and work with their stroke or something, but I do not charge for that because I think they are already paying for that service. And then if you opened it up that is Pandora’s Box too because then they will start stroking a check straight to them for private lessons. I just do not think it is good.

Q: Is it Chris Davis Swim School or is it Swim America or what? Swim Atlanta Swim School. Yeah, it is not Swim America, it is really kind of a cross probably from everything over the years and some of the stuff that I give you. I will show you different skill levels in the different groups that we offer. Probably very similar. We did not like Swim America, isn’t that kind of a station to station deal? You learn how to blow bubbles here and then you would learn to float on your back here? We have gotten a lot of negative feedback from other programs that are in Atlanta that do that because they really want their kid to be with that one instructor all 8 lessons or 10 lessons or 12 so yeah, we don’t run them. The instructors? Yeah, exactly. We will have them team teach with our best instructors and then when our best instructors say “that is a good teacher” they are ready to go then. And we will pay them while they are team teaching. Oh no, depending on how quickly they learn. Usually they just go through a session, maybe two sessions, teaching the different classes and then they are pretty much ready to go. It is not rocket science teaching them. Yes sir?

How much does your club get involved in putting equipment into the system? What do you mean by equipment? Like suits. I have Castaway and Friends Unlimited that just straight rent from me so I have an area of anywhere from 500 square feet to probably 750 square feet and I just count it as retail space. I am probably shooting myself in the foot on that, but then I didn’t know how you could really keep a handle on what they did, so I just straight rent. You come in, you run it, you sell it, I don’t have to mess with it. I did that years ago on the suit side and it was a nightmare. I wasn’t very good at it so I don’t do it and they do a great job with it.

Yes maam? That is a great question, are we willing to promote team unity? We do bus trips. We do training camps. We do certain meets that we go together and we really have to be very careful of that because it really does get to be Sugar Loaf against John’s Creek against Roswell. Years ago when my partner and I were together, we are pretty competitive people or I guess we wouldn’t be coaches, when we built our second location in Roswell we would start going back and forth. “Well I did this set, we were great today.” We did this set and he would tell his guys “We are going to do it 5 seconds faster” and I would tell my guys “Well that is BS.” We outwork those guys and it was a huge wedge. We were the EF’s, and you can guess what the F is, and they were the NF’s and they would not even room together so we have got to stop this NOW. So then we spent a lot of time doing more team things together to get it to work.

Well obviously, they get a lot of the information on the website that way. We have little individual mailboxes set up at the pool with the kid’s name on it and you get information to them that way and then we are just very responsive. For my coaches, if I have a pet peeve, it is if a coach does not return an email or a phone call. I return all of mine or I try real hard to. So if a parent has a question, they will, we try not to do it while we are on the deck coaching. Although as you know, they will still come up to you on the deck while you are trying to coach and you have to be real polite and say “can I call you back or whatever.” But I think for being as big as we are I think we do pretty well. Occasionally, I will get complaints that a coach is not returning their email or phone calls and then I will speak to the coach, but not very often. They can go and do it. I have had that happen with a person who has never gotten a kid even to the State Championship level, but for some reason they thought she was the big guru on breaststroke.

Q: Does that interfere at all with that person’s ability? Yeah, it was my swimmer that that happened with. And she was either getting from that other lady or her father or both so yeah. But basically what I told her is “you are just going to get confused, especially with breaststroke, so you need to really just pay attention to one and you decide who it is going to be. If you want to tell me it is that lady or your dad, no problem, I won’t talk to you about your stroke, but you are 100th of a second off the Senior Nationals doing it my way. You make the right decision.” That doesn’t happen very often or at least we don’t know about it. It is interesting that you say that. We just picked up some kids from Austin, Texas, Randy Reese’s team. And the lady came to us on the deck and she said, “I was doing private lessons behind Randy’s back and he never knew it,” so I know it goes on. I don’t think, for me, if they are paying me to do the job I should do the job. If I am not getting the job done then I ought to go into my own time and get the job done. I think they are paying for a product and if it takes a little longer with one kid and it needs more of a one-on-one, then I don’t see how they should have to pay for that. I know other people think they ought to pay for all of it.

Q: Is Martin still with you? He runs the management side of what we do. He got kind of burned out on coaching. We had tried for, gosh, three years to get somebody to take a chance with us. I was talking to Mike Getty to take a chance and nobody would on the pool management side so he had kind of a bad Senior Nationals and said, “Now I am done, I am tired of caring more than the kids care.” So we decided that he should end up doing the pool management side. We would hire another coach, who happened to be Bill Behrens. Some of you will remember him and then Jim and I lived on my salary and we gave Jim’s salary to Bill Behrens. That was the year that I got letters from the school saying that my kids qualified for free lunches and that was kind of hard to take. But it worked out well because we had lost money on our pool management the first year also; we didn’t know what we were doing. People got some pretty good deals, but then we figured it out and we probably, nationwide have 5-700 pools that we manage; 3000 to 4000, lifeguards so it has gotten really big, way big.

Great guys, thanks for coming. You are welcome if you ever have a question or you need any help ever, email me or call me.

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