Systematizing Your Swim School for Fun and Profit by John Coutts (1997)


Published


It’s always a pleasure to come to America. I love coming and visiting your country. Today is my 58th trip here. I’m going to be here on the way to Mexico a little later on in the year; I’ve been coming up here for a long time and today John Bainbridge and I are going to be talking about how we run our school in Sydney, Australia. John is an Australian living in California. He’s been there for twenty years and I’m going to let him introduce himself shortly. I asked John if he would join me in this presentation, because trying to keep people’s attention for three hours is pretty difficult and I thought as he lived in Australia, it may be good for him to use it here – an Australian’s perspective of what it’s like for him to run a swim school here in America.

We’ll just kick the presentation off by telling you a little bit about ourselves. I’ll tell you a bit abut myself then pass you over to John who will introduce himself and then take you through the agenda and what we are going to cover here today. I was born in New Zealand originally and I’ve been involved in swimming since I was seven years of age. I swam for New Zealand in the Montreal Olympics in the 200 and 100 butterfly. The year after the Olympics I decided that I still wanted to continue to swim, mainly because I wanted to continue to travel. The only way I could do that, not having the money, was to compete. Of course the younger guys were catching up on me fairly quickly, so I switched to marathon swimming. I raced on the marathon circuit from 1977 to 1992, finishing my best performance in the World Championships in Italy. I’ve been teaching swimming since I was 16 years of age and I worked with age groups from babies right through to adults, and I coached right up to the National team . I did not actually make the National team because I was a reserve coach but that was the year that I quit. I certainly coached quite a few National Champions. I’m now the General Manager of the Carlile Corporation which operates out of six facilities in Sydney. Along with Forbes and another partner I am one of the owners. In fact, I have ownership in two businesses and another which we are just about to start. I’ve been married to Sally for twenty years. I have four children, they range from 4 years up to my oldest son Benjamin who is just coming up to 20 – 20, 15, 9, 4 – the family’s fairly well stretched out. And of course I am your speaker for the next three hours. I’d like to call on John now just to come up and introduce himself. He is going to take you through the agenda.

JOHN BAINBRIDGE: The slides have already told you I am an educator. I was a Physical Education teacher in Australia from 1967 to 1975 and was an Athletic Director of a major boy’s high school, very close to the school John now manages and part owns. I was also a swim coach in Australia; I actually worked at the Carlile Organization but not under Forbes. The pool at Killarney Swim Center was owned by Frank Guthrie when I first started there as a swim teacher working their Learn To Swim program for a number of years up until ’75. The pool was bought by Terry Gathercole in the last couple of years of my stay there so I worked with Terry as well, in their Learn To Swim program. I was also a swim coach with Southern California Aquatics in Orange County for a number of years and worked in age group coaching there for about 5 years. I was of course a swim teacher and very interested in infant swimming as you’ll hear about later. Also, I am a husband and father, like John. I’ve got two young children from my second marriage who are now 9 and 7 and had the opportunity to have those children born under water, so you can see my fascination with water has gone to some extremes. Also I believe my wife and I are a kind of partnership. If you are ever working with your wife, you know what I am talking about. It isn’t always rosy to work with your wife in a situation, but at the moment she is now out of the business much of the time, working and concentrating on raising our two children who are dyslexic and we are working with them getting them to be able to read and write.

As I mentioned before, I was NSSA chairman and I have been doing that since 1989. Part of that job has allowed me to travel around the world quite a bit, presenting papers and it has really helped to expose me to how other swim schools are run in other parts of the world. I am fascinated very much with what’s going on in Japan, the way they systematize their businesses. I am totally impressed with what they are actually doing in Mexico City. If you get an opportunity to go down there, look up Nelson Vargas’ school. You’ll see also a very well run business.

As John mentioned, I am your other speaker for the next three hours and we hope we can keep you awake. There is a lot of work we’ve got to get through and I hope it can be interesting to you. Let’s have a look at what we’re going to cover today in our agenda. What we’ve got is about a three hour presentation for you. It’s going to be broken down into two fifty minutes segments. I’ll do fifty minutes and I’ll probably finish around Systematizing; take a short break to stretch your legs, answer any questions you may ask.

On John’s part, it could be fifty minutes, it could be fifty hours. If you know John, he can talk really well and this thing on Gerber that he is in to has really got him “by the ears”. The Personnel part and Program part I am going to present. That part of the program will be another fifty minutes then we’ll take a short break for lunch and come back in the afternoon: look at Budget, Record Keeping, Marketing, then we’ll do a summary. But there’s a lot of information we’re going to cover today and it’s going to take us some time to do it. Each one of the topics could be a one-day workshop on its own at least, and some of them even more. There are some topics like Programming that we’re not going to spend a lot of time on because I know all of you, or most of you out there, are doing programs already but, we are going to touch on some of the things we think are important in a program. The whole guts of what we’re doing today, I think, is really trying to expose you to many ideas which we think will help in building up your business and systematizing it. I think we’ll move to the next one so I’ll pass this back to John and he’s going to go in to a little more detail on his background.

JOHN COUTTS: I’d like to start off today by telling you a little story and I want to go back about 10 years ago, back to when I was living in New Zealand. I was coaching, I was teaching, trying to support a family. Those of you that coach know there isn’t a lot of money in coaching. Working exceptionally hard and of course being a fairly competitive person, I wanted to do the best job I could. I woke up one morning, I don’t know what it was, I was just heading towards 30. I suppose there’s that time in your life and I said to my wife, “It’s time to go”. We’d been married for about ten years at this time so she was used to living with me. She said, “Go where?” I said, “I don’t know. Australia, America, Germany, Canada; it’s time to move.”

Our business had grown as big as it could. I started it off working by myself. At that stage, we were up to employing about 5 people. I taught up to 10 hours a day some days, I coached early in the morning, I worked at night and of course I’m on home on the weekend. So I wrote to Forbes that I’d like to come to Australia. I really needed a challenge. He wrote back, “What you need to do is get over here and have a look around. You need to come and sell yourself. I haven’t got a job for you but you really need to come and look around the country.” So, from May 1986 until August for 3 months, I went from one side of Australia to the other. I went and looked at every swimming school from Sydney to Perth. I didn’t always introduce myself to the owners, because I wanted to really know what parents thought about swimming schools and swimming lessons and there were certain things I decided I’d try and find out. Sometimes I would just walk in, sit down with a mother and ask, “Which one is yours? How long have you been coming for, and how far have you traveled?” And of course having been involved in teaching for a long time, it didn’t take long for me to get involved in the conversation.

Some had been coming for five years. In some cases, some had their ‘floaties’ on and couldn’t put their face in the water. I was horrified! I wouldn’t say some cases, that was an isolated case. Far and large what I saw, I liked very much. But I could see there was a lot of room for improvement. Forbes was smart enough to say to me, “Before you go home, come back and see me and tell me what you’ve seen,” which I did. At the conclusion of my trip, I went and had a two or three hour talk with Forbes. I told him I was amazed at what I had seen and got back to the place where I was staying. I think it was the following day he called me up and said there was something about me he had liked – my enthusiasm. He said, “What do I have to do to get you to come and work for me?” I said, “Simple. Offer me a job.” Which he did. I don’t think at that time Forbes actually had a job for me. I think he probably created one because at that time, the fellow who taught me to swim, who incidentally the year I went to the Olympics, he was a coach at the Olympics; he was actually working as Forbes’ manager at that time. To cut a long story short, I went home, packed up the family, and we moved to Australia with two suitcases just over 10 years ago.

The business we came in to had been purchased by Forbes in October of 1985 and of course this is now January of ’87. I had to take a drop in salary not because he was miserable but practically because business couldn’t afford to pay us any more than he offered us. I was happy with what we had been offered and in principle Forbes said, “It is basically up to you. You build this business up and you will do well out of it.” I remember the look on his face when I said, “We’re going to turn out $1.3 million from this school.” At that stage, we were doing about $240,000. I remember that look quite vividly because it was the same look my mother gave me when as a rather ordinary 11 year old, I told her I was going to swim in the Olympics. You see, I actually knew something then that Forbes didn’t know. I already sat down and worked out what the potential of the place was. Forbes had just put in a second teaching pool at that stage. I had drawn up the small teaching pool and in this case I had worked out how I was going to use it.

This was just in our morning preschool program, Mondays to Fridays. One baby teacher here in one little corner of 144 the pool. Your total is based on taking 7 children every 1/2 our, 6 lessons a morning makes it 42 children a day. Your total from the baby club was 97,000 from one teacher. That second pool, 16 meters by 3 lanes, 16 m x 7 m. Now this was your total in this little space here. It didn’t take long to realize when you look at the big pool, this is something we all know but it was interesting to do the exercise. When I looked at the advance side for example: with 3 coaches, this particular group – not at terribly high level could only bring in 88,000 using the whole 25 meter pool. I went through and worked on the whole program. I figured out at that time we could do over 2 million, if every one turned up on every day allowing for a closed pool two weeks of the year, we always close over Christmas allowing for public holidays, your total was just over 10 million and I knew that everybody can do at least 15% of your total. I knew a million was possible but I wouldn’t set fairly high targets so I’ll set the target of shooting for $1.3 million.

You see, I’ve always used the analogy that the swimming business is similar to an airline. Airplanes don’t make money sitting on the ground nor do swimming pools. If they are empty, there’s no revenue coming in. Planes only make money if they keep the planes in the sky. You’ve got to actually look at the pool as an analogy with the plane. Every half-hour, every 45 minutes, every hour, there’s a plane taking off. It features the captain. Is the plane going to be full or empty.? Energy costs don’t change. It costs the same amount of money to heat and treat the pool. Mortgage doesn’t change, gas bills, electricity bills don’t change. The only thing that changes is the wages.

So what do we do? We made a lot of changes. We weren’t generating a lot of income so we had to do a lot of the work ourselves. We painted the place, we built new seating, and we painted some murals on the pool. Most swimming pools are pretty drab. These were all fibre walls here, so we thought: “Let’s put a little bit of coloring into the place. Killarney was built in the early ‘60’s so it’s a fairly old facility. The second teaching pool that was being built, we painted some nice murals in there and tried to create a little bit of atmosphere in the pool. We built the second teaching pool, as I said, we increased the water temperature to 32 C – I believe 92 for you – we put our staff in a uniform, we rebuilt the reception area, we got a little bit creative in our advertising. We tried to use some humor. Forbes is very well known in Sydney in Australia, so we used the caricatures. Our organization, when I arrived, was teaching the grandchildren of our first clients so we tried to play on that. We tried to use pictures that were very different to capture the public’s eye.

We provided informative customer hand outs. We introduced a swimmer of the month and we put their photograph on the board in reception. We gave them a bathing cap, we gave them a certificate and a letter to take home and we made a lot of fuss over them. We offered free tea and coffee to our customers, to their Mums and Dads while their children waited. We started recording lessons and listed attendance’s, and we started to analyze them. So I can show you from the day I arrived, every figure in every group. We wanted to start to learn a bit about what was going on in our business. We assist all new clients, and we offered 100% satisfaction guaranteed. If you’re not happy, we’ll give you another lesson. We wouldn’t give you your money back, we’ll give you another lesson.

Here are some of the problems we faced. We will go through quickly and in all honesty. I was a swimming teacher and a swimming coach. I wasn’t a very good businessman. We basically learned the hard way. We did all the work, we played, we worked the weekends, we cleaned the toilets, we laid the bricks, we painted. You people have done all these things. I know. We didn’t delegate enough. We started problems as we grew, because we didn’t have the structure in place to teach teachers to teach. The plant couldn’t keep up as we grew. The filters couldn’t keep up with the lines so we had to put in new filter. The boilers — if we had a break down we couldn’t get the pool back up to temperature so we had to spend a lot of money putting in new boilers. I should give credit to Forbes too, because apart from our hard work, if he were not prepared to put the money out and believe in us, then it never would have happened.

Both our pools were really too deep for teaching some of the younger children. So what did we do? We backed in the concrete truck and we put $8,000.00 worth of concrete in the deep end. We retiled the pools, we started to document our teaching methodology, and we started advertising in house. We introduced a little red light, we put that in our small teaching pool. We introduced supervisors. We put supervisors on deck. We assisted every child that came in to the program. Whenever a new customer came, lights flashed in both pools telling the supervisor there was someone at reception. So we had somebody come and greet every client. We also had an orange one put on. If the teacher had a problem and they’re in the pool and they wanted a supervisor, they could flick a button. There were orange and red lights going all over the place saying, “Hey, we’ve got a problem here, we need your help.”

We built our program around once a week lessons. In New Zealand I was used to teaching every day and that was one of the things that really impressed me when I went to Australia just how these children didn’t drop out of the program. They stayed in there. Forbes had been working on once a week lessons for quite some time. We reinforced that even more. We charged a monthly fee rather than terms. We introduced a new certificate system with no beginning and end so there was no question about doing a course of lessons and saying, “See you next summer” or “Now you’ve got your certificate, you are now ready to move up 145 into the next group.” So there was a chance for people to go on. We educated our customers year round and we kept the pools warm.

One of the ways we solved the problem with staff was to advertise in-house. We have a very strong group particularly in the mornings, the Mums that work for us now. We are starting to develop that even further.

I’ll give you a little bit of a breakdown now on our program. We are doing this financial year, $1.4m in one facility – that’s our biggest facility. In three years’ time we’ll peek out at about $1.7m. What I want to do is give you a little bit of encouragement today because John and I are just like the rest of you. We didn’t just fall into these positions, we started off and just started working by ourselves but these things are possible. Our babies in preschool – 1 to 5 program – now contributes 35% of our total program. Our beginners are 6-7 years old children that are learning to torpedo or dive and learn to side breathe. They make up nearly another 1/3 of the program, lower level squads up to say junior squads that’s place for another 30%. In John’s facility, he tells me preschool makes up to about 75% of his program, the under 5’s. He is governed by the use of the facility that he has.

Last and not least. The last thing that we did is we continued to keep looking. We continued to keep traveling but luckily within Australia and overseas to have a look at what people were doing. I think that some times it used to be much to Forbes’ horror that I was going away again but I used to sit back and often ask myself, “I wonder why he was so successful.” Back in the late ‘40’s, ‘50’s spent a lot of time traveling and looking at what people were doing and I figured out that’s probably no different for us. There is yet to be anywhere I have ever been that I haven’t actually learned something. It was on one of these trips about 9 years ago in America that I bumped in to John Bainbridge. I’m just going to pass you back to John who’s going to come and tell his story, and then I’m going to get on and finish off the next part of my presentation.

JOHN BAINBRIDGE: As John mentioned, I taught in Australia in that pool that he now runs. When I was teaching in there with Frank Guthrie, we had a bit more space for our Learn To Swim program, and when Terry took it over, he was more in the competitive program. I remember vividly teaching in that pool in the afternoon when his advanced squad was in there, and had people like Beverly Whitfield swimming in the lane beside were I was teaching. These kids I was teaching were 3 and 4 years old. As they go by I would have to grab the kids out of the gutter almost and bring them into the lane we were teaching in. So things were fairly primitive back in those days and even prior to going to that school facility in Killarney, I used to teach after school in the summer time. The first year I was teaching in their recreation program in the ocean pools in Sydney. Often they would drain the ocean pool, so we would have to take the kids out of those pools to around where the surf was in the rocky areas – you have 3-4 year olds, 15 or 16 of them trying to teach them to swim. Things were very primitive back in those early years of learning how to teach swimming.

That wasn’t my primary focus in Australia, it was sort of a part-time job after school, because as I mentioned I was an Athletic Director of a High School. But, I stumbled into swimming when I came to the United States in 1976 to write a Masters Thesis at Long Beach State. I was going back to Australia originally, that was my plan and further my career and getting a Masters Degree and further move my way up in the education system. As a side line, while I was studying in Long Beach State, I got involved with babies swimming with a lady that used to teach survival back floating, a lady called Greta Anderson. I got some background knowledge and a lot of experience in how to work with infants. While I was there teaching in that pool, one of the clients of the babies I was teaching, was involved in the development of a health club and he said, “It might be an opportunity for you to start up a swim school.”

I was going through a hard time in my marriage, I had two children at that point, 6 and 3, who were with me in the USA. To make a long story short, my wife left me and went back to Australia and I was there still finishing my Masters degree for about another six months. So I looked at this facility and thought maybe we could do something and I proposed the program. I started the school not knowing anything about how to run a business or how to employ people. I was only there actually on a student’s visa so I was illegal here in America, but I actually started this business and I didn’t think it was going to go on because I thought I would probably leave and go back. I met a girl in six months here in America and I thought I might want to stay. I did go back to Australia but I ended up getting divorced, wanting to come back to America, so I left Australia with 2 suitcases and $3,000.00. My girl I was with here in America kept the school running for a few months, while I was back in Australia getting matters tied up. So I did come back with a couple of suitcases and few thousand dollars and started the swim school. At this point I was still an illegal alien. I came back on a Visitor’s visa and started the school with my girlfriend, or wife-to-be, and we got it going. She was humming and hawing about getting married, not getting married. To cut a long story short, I ended up having 3-4 schools and was still an illegal alien because she wouldn’t marry me. But eventually I did get married and got to be legal but that is kind of how my career started here in America. I am a ‘wet back’ from Australia.

But as I said, we did start the first school in ’79. I have worked with a health club chain of people called Racquet Ball World, and they started their first health club in ’79 146 that’s where we got our first school started. It was successful and in 1981 they decided to build another one so I got to design the pool with them. I had the pool for the members, a lap pool, and a small teaching pool which was only 18 ft. wide by 32 ft. That was my exclusive use and I had use of one lane – I’ll get into this later when we get to talking about the program. Hey! You can run programs in limited space. We opened another one in ’82, a fourth one in ’84, a fifth in ’87.

As I said, my background wasn’t business, it was teaching but at least I did have an administration background, having run a big High School. So I did stumble through it. I did try to get Manuals to develop everything else but my business background was pretty weak. It was a real struggle to keep those businesses going. I think I want to share with you some of the figures on this growth and what happened to it. This was ’79 when I first started keeping actual records and we had two schools open. As I said in ’81 we had three and so on, so that’s the number of schools we had. They shut down, they told us I was selling this 5th school in Canoga Park this year, so I bowed out of that one and then we went down to four and then we actually went to three. We opened up this fourth one in Buena Park’s which is now 6 months behind in paying the lease. In those days they used to collect all my gross and pay me 75% of it to run my business, and they left me standing in this facility here for 6 months without any rent, so I had to shut that one down so we went down to 3. Then we picked the other one back up again, the Buena Park one. Now the Canoga Park was going to be sold and actually didn’t sell, so we’re back in here. So we’ve got 5 schools starting back again, now in July. Working with this company has been very interesting, to say the least. I don’t own the facilities, we lease them and we pay a percentage lease to them and now we collect the gross, and pay them so that’s a lot better deal.

But looking at the gross income rises, the reason I am showing you this, is up until this point in about 1986 around here, when we had 4 or 5 schools, I could see that my profits — this is what I actually lived on, this was what I was actually drawing — was ridiculous. I had 5 schools, probably 50 or 60 staff with this amount of profit, at the end of it was just not working out. So I got more interested in riding motorbikes and going on trips and letting my wife run the schools. We got very disinterested, disenchanted, in the swimming school industry. But, there was a big turning point that happened around 1988 and 1990 and 2 significant things that I think influenced my life in the way our schools are run. It was the forming of the NSSA, the National Swim Schools Association, which started in 1988 – 89 of which I became vice president in the first years of that organization.

One of the real keys that spurred me on to get back into this business was meeting this character right here, John Coutts. He certainly goes on travels everywhere and wherever he goes he looks up the Yellow Pages and finds the swim schools, or I think Forbes told him we had a reasonable baby program over in America so he dropped by on his trips to Disneyland with his family. We instantly hit it off and he told me he worked at that Killarney Swim Center. I knew that Center. He told me what kind of money they were making. I thought, “Oh bbb’s. I know what that pool is like.” I didn’t say that to him. But he kept showing me his figures and I thought I’m going over there to have a look at this. There is something going on here. So, I did catch a plane and went over there. It was a zoo and it was working, so then he told me I had to do certain things to change my program.

We were doing private lessons, and we were doing them in sessions and he said that’s ludicrous. You need to go to groups and you need to teach in monthly sessions. You don’t call them sessions, they pay monthly but no beginning and end to your program. Then when every person called up on the phone we would say, “Yes, now you need to do group lessons.” In going through that first summer we just had the same number of people calling, who did the previous year, but for everyone of those persons who wanted private lessons we were getting $15.00. Putting them in a group lesson, we were only getting $7.00. That was really smart when you think about it! So we went through that summer. I kept calling John, “It’s not going to work. The numbers I have won’t get us through the winter.” We were worse this summer than we were the previous summer. This was 1990. Coutts said, “Just hang on, just hang on. Just keep going, keep marketing to the clients.” So through that next winter we did actually keep numbers, I didn’t go under. I was ready to, I tell you I had my immigration papers ready to go back to Australia. My wife was all ready to go. We were ready to be out of there in 1990 but we did hang on and our schools did grow and we have grown from that point quite significantly. So if you look at 1990 when I ran in to this character and needless to say we have grown, and grown, and grown so we are at the point now we’re over $1.1 million in our schools.

I got out of the water, by the way, around 1993 so I haven’t been in the water for 4 or 5 years now, and I can now work on the business and not in it. And basically that is what John and I are going to try and talk to you about, today — what you want out of your life. Remember, I was thinking, “This is nuts. I don’t want to do this, this is crazy.” I sort of went and walked about, rode dirt bikes (got pretty good at that too) but I didn’t get into the business until I could see that there was something at the end of the line that could free me up to do other things, besides stress out and worry about a business. So, that’s what’s the guts of our talk is today — it’s to try and show you a dream and let you track some systems that we’ve developed and in particular what John’s developed through the systems at Gerber.

About 2 years ago John discovered someone who’s changed the way we view our businesses. I’d like him to come back here now, and tell you the story which we think is the key to a successful business — systematizing your business.

JOHN COUTTS: I want to tell you about a guy called Michael Gerger. I was in Adelaide visiting a friend, another swim school friend. My wife and I were sitting around the fire on a cold winter’s day and he said to me, “There’s a video I think you should look at” and he popped it into the machine and his wife was talking to me and I was 1/2 watching the video, 1/2 listening to what she was saying and all of a sudden something clicked. You’ve got to understand I am a person, from a motivational point of view, I’ve never really had to read books or listen to videos. I’ve been able to motivate myself, but something this guy said just clicked. All of a sudden my attention was really focused on what he was saying. I said, “He’s talking about our business.” He wrote a book called the E Myth, the “Entrepreneurial Myth” which is on why small businesses fail and what to do about it. I took the video home, watched it about 4 or 5 times, rather enthusiastically, then I went out and bought his book. I heard he was coming to Sydney so I went to his seminar. I had a quick count in Sydney. I think we paid $400.00 a head and he grossed, I think $300,000.00 for the day, just sitting on the seat talking to people. There were doctors, there were lawyers, there were panel debaters, you name it, they were there.

So after a little bit of persuasion with Forbes and also the other partner, Richard, I convinced them for our company to sign up with Gerber. So what did I learn from him? Well, statistics were pretty frightening when you look at them. According to the IRS there are 18.1 million businesses in the U.S.. Of the 18.1 million businesses, only 100,000 of them employ more than 100 people. In other words, 18 million of the 18.1 million businesses are small businesses. What are your chances of surviving today? Well, every year 1 million of you people go in to businesses. By the end of the 5th year, 800,000 have failed. I think about 50% in the first year; and that’s not all the bad news because of the 200,000 left after the first 5 years, 80% of those fail in the next 5. In other words, only 4 out of a hundred people make it past 10 years. Let me say that again because it is pretty frightening. Only 4 out of 100 businesses make it past 10 years. If you’ve been in business more than ten years can you hold up your hand? Oh, good. You guys are going to make it. So the fact is, the odds are so much against you succeeding, that if people realize what they are letting themselves in for, they’d really just keep the job they’ve got.

But Gerber argues it doesn’t have to be that way. So, what causes this failure? Is it lack of capital? Is it the economy? Interest rates? Can’t find good people? Partner? Mother-in-law? Father-in-law? Wife? Husband? All the reasons people give you. Well, he said, it is none of these things that cause businesses to fail. The problem with businesses is the people that run them. We’re the problem. I could relate to that. Not our people, it’s us. We don’t know what the hell we’re doing. So the problem is people going in to business simply don’t know what they’re doing. Gerber suggests the reason most businesses don’t work is because the people who own them are doing the wrong kind of work and they’ll never change until people change the way they think.

Who is it then that starts the business? Again he suggests it’s not an entrepreneur. That’s what the ‘E-myth’ is, the ‘entrepreneurial myth.’ The person that starts the business is a technician suffering from an entrepreneur seizure. What does that mean? Well, the doctor opens the medical practice, the graphic artist opens the graphic design business, the carpenter opens up the joining shop, and of course the swimming coach or swim teacher opens the swim school. Each and every one of them believing that because they know how to do the technical work of the business that they know, how to run a business that does that technical work and that’s 180 percent from the truth. Knowing how to do the technical work, knowing how to teach and coach, has got nothing to do with knowing how to run a business that teaches and coaches.

So what can you do to stop yourself from becoming a statistic? What you need to do is you need to go to work on your business, not just in it. If you’re working in it as well, while you’re in it you work on it at the same time. You need to create systems so your business becomes process dependent, not systems dependent. Because if you’re going to build a business around your own personal skill then, he said, you’re out of business the day you don’t want to do it any more. Why create systems? So you can duplicate the things you do well. So you can train your staff to do it your way, the way you want it done. To free you up to give you more time for you to work on the business and so you’ve got something to sell when you don’t want to do it anymore and also the business doesn’t have to rely on you. The system is the solution and that’s what we’re going to talk about today — systems, not the people. If the business depends on you then you don’t have a business at all. You have a job and it’s the worst job in the world because you work for a lunatic. You work for yourself.

Where do you start? Let’s assume you’re going to build a house. Your husband and yourself, you’ve decided to build a house. OK, it’s a good idea, you’re going to build a house. What’s the first thing that you would do? You want to get a picture of what it is that you wanted to build. Then you might have to find an architect. A builder, an architect, you would have to find someone to draw it out for you. And then you’d have to arrange the contractors and so on. There is a logical sequence for building a house and so too there is a logical sequence for building a business. That’s what we’re 148 going to talk about now.

We’re going to focus on 5 things. First of all, your personal objectives. Then your Strategic Objectives, the Organization Chart, Position Agreement, and finally after we come back after taking a little bit of time to stretch the legs, we’re going to have a look at the Operations Manual. This is a pretty heavy topic and I don’t expect you to absorb all of this information, but I am not going to be talking to you about something that we physically have been doing and what a difference it has made to us. So, let’s look at those points individually starting with your Personal Objectives. You need to start by asking the questions, “What do I want? What do I want for my life?” You need to ask yourself “What do I want to do between now and my COD?” Anyone wants to know what your COD is? Crap Out Date. Like it or not, we’ve all got one. I Just couldn’t help but thinking the other day with Princess Diana; how sad that was that someone who is loved and respected all over the world and how just all of a sudden it was over.

Gerber sent me one of these worksheets to fill in. It’s rather interesting. I sat down with it, I did it by myself, I asked my wife to do it and then we came together and we were pretty pleased because we pretty much both wanted the same things. What sort of money do you want to earn? Professional growth for development? Education? Family? Major purchases? Travel? Pleasure time? Retirement? and anything else. Anyway, we sat down together, we filled them out. I was just about ready to send mine off and I realized I had filled it out wrong. The question was, “What do you want to earn?” Now I felt I was right. I am in Killarney with Forbes, and Castlecove owned by Forbes and Richard and myself, and then we’re doing a new project. That time we weren’t but we’re doing a new project going in another city in Adelaide; so I was fairly conservative with my income. And then I had a look at it and I thought, “That’s not the question, the question is “what do you want to earn.” So I thought, “OK, I like traveling, I’ve got a large family which they cost quite a lot of money to take them away and probably one of the most important things for me… I put too much time into my work and not enough looking after myself, so I want to improve my health and fitness. I came back to the income side of it. I looked at the figures that in 5 years that I’m almost sure that I’ll be earning, and I said to my wife, “This is B.S… That isn’t why I go to work. So we said, “All right, to do what we want to do, what do we need to earn?” So I went back and did the figures and I found out I actually earn enough money now to do all the things I want to do now. It scared the hell out of me because I thought what the hell do I want to do in the future? I came to the conclusion in the end it was probably OK that I didn’t know, because I have always been happy doing what I’m doing and if I’m not happy doing something, then I change directions.

I found this to be fairly powerful. I did this a year and a half ago, I have actually achieved everything I set out to do in the first 6 months in the first year, and I’ve got through about a third of things I wanted to do by the end of the first year. Still a few things that are missing but I’m going to continue to keep working on those. Once you’ve got the picture in deciding what it is you want, then you need to look at what your business needs to look like to give you more life. That’s what we’re going to do. That’s called Strategic Objective. First of all, before you go in to business, the first question is “What do I want?” The business is only a tool, it’s only the thing that is going to give you more life. It is rather interesting, isn’t it? Most of us go in to business to be free, to be your own boss, and the reverse happens. I could laugh at this, because it happened to me. You work 7 days a week, you work 16 hours a day. Doing it, doing it, doing it, doing it, you’re not looking after yourself and the complete reverse happens.

Your Strategic Objective is a picture of what the business is going to look like to give you more life. It is a picture of what your business will look like, not now, but when you’ve finished — when you’ve finished it. So you can do a little bit of dreaming here, just like you did in your Personal Objective. My Strategic Objective for the Killarney Swim Team is $1.7 million with profits of $400,000 after all wages, bonuses, etc. We know what that business is going to look like when we have finished. In the year 2,000, we know what our people will look like, we know what changes we are going to make. Like the blue print of the house you’re going to build because unless you know what it’s going to look like.

How will you know where to start? What goes in to your Strategic Objective? You need to know what your gross revenue will be, what your gross profit will be, what your net pre-tax profit will be, who your customers will be, what your people will look like in terms of the uniform they’re going to wear, and whether you’re going to be local, national, or international. We’ve decided with our company that there’s enough business for us in Sydney for the rest of Forbes’ life, Richard’s life, my life, and probably our sons after us. We don’t have any grandiose ideas of expanding all over the show. We are opening up in Adelaide soon. We’ve done that for a reason, because we’re trying a different concept and we’re doing it with someone else basically testing waters out of our hometown to see whether the ideas we have will work. Now you have a picture of what you want to get out of life, and we know what our business is going to look like to give us more life.

Let’s go here and organize our business so it doesn’t become our life. Let’s look at the old chart. Every small business needs a chart and you need to think of your business functionally. Try and look at the functions of the business, not the person, because the biggest problem in small businesses is that we build business around people and when 149 that person leaves, the business collapses. Before starting with Gerber, building the job around the person was probably the biggest mistake that I made. What happens when you have a good swimming coach or good teacher and you build everything around them and they leave, and then you’ve got to reorganize everyone’s job so you need to look at the function first.

There are three major functions that should be included in every organization chart – Marketing, Operations, and Finance. Marketing — you have to get the customers in. Operations — what you do in your business. Financial System — you’re going to use to monitor and evaluate the health of your business. I’m just going to pop on our chart. This is all part of our Strategic Objective. I should say we found a few things on here that are not going to work either, so you do modify this thing as you go. There is a Board of Directors and a General Manager. If you were just starting off and there was just yourself and your wife, or wife and husband, or two partners, even though you might be in a number of these boxes, you still need to do one of these because as you grow and get bigger, you’re going to move out of the box and you’re going to leave something behind for the people you recruit or employ.

One thing I learned from Gerber is that you can’t effectively manage more than 5 people. As I stopped to think about it, I thought :’Gee, I’m in charge of about 15 people, as well as running a swim school. No wonder I never seem to get anything done! So we have a General Manager who is in charge of Finance Manager. Training Manager, we have someone doing this part time, targeted to have someone full time in the next year and a half. Field Manager is in charge of the managers of each of their pools. At the moment that is myself, shortly within a year Rich Cahalan will move out of this position into Field Manager’s position. We have Corporate Services Secretary, she does all of the Training Manuals and all of the Systems we’re putting them together and Marketing Manager.

Now I used to think we can’t afford to have a Finance Manager, our business is too small. Before I did it or Carlile did it; and then figured these don’t have to be full time jobs – so we have an external accountant and we now have an internal accountant who just comes in and works every Monday it made a big difference! Our business is really starting to function a lot better and certainly becoming more and more profitable. The Marketing manager — again we do it ourselves but eventually we’re going to out source these to someone who works at their own little company who works for themselves. We’ll just use them as we need them.

Those of you that know John and Judy Bonning – they just joined us just recently, John is the Operations Manager. There is someone looking after maintenance, people looking after each of the programs and we have our own Finance Administration Coordinator. These people, by the way, happen to be all of the Partners’ respective wives. We have 3 companies. This company is made up of a number of pools and we’re just restructuring that at the moment, and we have future schools and we’re getting fairly close to expanding, but when people come at the bottom, we want to turn them on to let them see there is an opportunity for them to move up the ladder.

So once your chart is completed you need a Position Agreement for every box on the chart. Let’s look at what goes in a Position Agreement. The Position Agreement is a document. Basically it’s a job description. When we put the word ‘contract’ up there, our staff didn’t like the word ‘contract.’ So we said “Well, what do you like?” They said “What about ‘agreement’?” They thought ‘agreement’ was OK. For every one of those boxes on the chart we started developing as a Position Agreement. Position Agreements are from 6 to about 10 pages long. It is a document that describes why the job exists, who is the person accountable — in other words, who their boss is — the work that they are required to do, but it doesn’t tell them how to do the work. That’s what’s wrong with a lot of job descriptions – it tells you how to do it. It should just identify the work you have to do. And finally Standards. Any standards by which we are going to measure the person.

I’d like to clarify with you the difference between work and standards. Let’s assume our Hygiene Maintenance person, or Hygiene Maintenance officer, one of his jobs is to test the pool for chemical balance every day. So that identifies that’s his job – to test the pool. It doesn’t tell him when but in the Standards, it actually tells him how many times a day it should be tested, and when it should be tested and if it is out of balance, what needs to happen.

We’ve looked at Personal Objectives. In other words what you want out of life. We’ve looked at Strategic Objectives — what your business needs to look like to give you more life. We’ve looked at Organization Chart, we’ve had a look at Position Agreement and now we’re going to have a look at Operations Manual. This is what Operations Manual looks like for us. In our company, we have had 25 of them were put together. This may seem like a rather daunting task. It has been fairly hard but we’re coming fairly close to completing them now. Basically, there are five sections: There’s a Position section, there’s a Company section, there’s a Policy section, there’s a Systems section, there’s a Logic section. For every position within your company you know what you expect of them. We’re going to have a look at what goes in to each one of those sections.

First of all, the Position Section. There are 3 sub sections and the first one is the Position Agreement which we have already talked about. Here, when we open it up, the very first one here would be the Position Agreement. The 150 second one is the Employment Agreement and it is a legal document we have had a solicitor draw up. This is only the front cover. It is about an 8 or 9 page document. This basically protects all of the systems that we’ve put together so someone working for us can’t take those systems and take them away and use them elsewhere. The third subsection of the Position Section is the Compensation Agreement. In our company, we employ 3 different types of people: we have full time staff, we have part time staff, and we have a lot of casual people. When I say casual, we have casuals that have worked for us for 10 or 11 years. It is the same job, they come every week but by having them on as casuals, we don’t need to pay holiday pay, sick pay, and all the other things that go with it. Generally, the hourly rate is a little better to compensate for that. For permanent and part time it includes superannuating or retirement and basically this is always promising, nothing else. We have down at the bottom, not withstanding the above, any specific other arrangements duly signed by both parties, shall be taken into account. We have a number of people that are on bonus arrangements that would be included here. It also spells out just what the agreement is, how much we agreed to pay the person.

Let’s have a look at the Company Section. That consists of 3 subsections. First, Organization Chart: It also has the Company’s Philosophy in there; that’s about a two -page document. Summing it up is basically something Forbes wrote a long time ago, “Our aim is not to produce champions but to provide an atmosphere where champions are inevitable. Swimming is a means to an end to build selfconfidence, self-discipline, integrity, and courage for life.” So your company’s philosophy will go in there, and finally The Company’s Story, and this is the story about your business: how you got started, where you are today, and where you see your business going in the future.

The second is the Employee’s Handbook and that is something like this. Anything that’s on our letterhead, there is always 2 copies of — 1 goes to the employee and one back to us for our files. Our Employee’s Handbook goes through such things as: equal opportunity — we let people know that we won’t discriminate against color, against sex. Everyone of you, if you are prepared to work hard, has equal opportunity; probationary period and evaluations; pay periods; staff and family discounts; superannuating or retirement; holidays and time off; absenteeism; any rules of conduct, tardiness, in-house communication, leave of absence, refreshments, common courtesy, phone calls, home and work, health and safety, and termination. That’s all covered in the Employee’s Handbook.

The third subsection covers any policies for the company in that position. The third section is the Policy Section and that has a section on dress code – what everyone would wear and any standards related to dress and grooming.

The next section contains 4 subsections and this is the Systems Section This is really the nuts and bolts of an Operations Manual. The first section is what’s called Action Plan. Now you see before that a job description talks about the work, but it does not identify how to do the job. Well, in Action Plan, any work that is routine is spelled out in the Action Plan. This one is for locking up, closing up the facilities. I think that closing up at Killarney there are 24 steps you need to take. Now the reason you go to the effort to document all of it is because as people move on and times change, it is impossible for you to physically remember to pass on all that information. This is the easy way of doing this job. For every single job we do within our business, we are starting to document or write Action Plans where we can. Often when people talk about systematizing they say “Yeah, but that’s years off.” I won’t argue that it’s completely reversed in most real world situations. This is what we did, to give you an example, with our receptionists. We got all the receptionists to come in and we said, “You work on the reception, tell us what’s wrong with the job.” No one said anything. We said, “Come on, there’s got to be something’s wrong with the job. What don’t you like? What bugs you? What annoys you?” So then up goes one hand and by the time we finished, we had a list of 50 things that didn’t work. Then we got them to prioritize what bugged them the most. We got them in order and when we had them in order then our receptionists, not us, went about actually documenting an easy way or a way to do the job so it would work. Once you do that, then that’s the way everybody does it here so you are not building around the person. You are building a system. You are building expert systems and when it doesn’t work anymore because you’ve grown or gotten bigger or you’ve introduced a new computer then you change it. It will take us about another year’s work to finish the Action Plans. We had to be very committed to see this project through. This is so our business could work and so we’ve got some control over it. So we can get away and go to conferences and we can be at conferences when everyone else is busy so we can work on our business, we can have a look at how we can improve it.

The next is Scripts. This is how we answer the phone here. This is the script we use dealing with different people. We know what to say because we’ve been using it for years. When we take on a new supervisor, they don’t have anything in their bag of tricks so we’re going to give them a script. We’re going to teach them how to handle different situations, how you answer the phone, how you answer the most commonly asked questions.

The third section is your Recruitment System. We actually have a Recruitment System. I am going to talk about this coming up shortly. I am going to talk about what we do there. That section, the Recruitment System, only goes in the Manager’s Manual – just the people that employ people.

What I haven’t told you is if I employ 5 people working for me, which I do, in my Operations Manual apart from having everything for me, and yes, I do have one, there is one for the General Manager too. So what happens when I’m not the General Manager anymore? The 5 people that work for me, all of their information is in mine so anyone who works for you, you’ve got everything so you know what’s expected of your people. Apart from them knowing, when you take someone on, there’s a system for introducing some of these things.

Finally the fourth section includes all of your Training Manuals. I’ll just flick at the back of ours. In this case, if the teacher were teaching Learn-To-Swim after school and preschool, both of their manuals are in the back. We don’t just give our staff the Training Manuals, we don’t just hand it to them, we’re actually developing a system, teaching the teachers to teach. As I said before, it is a pretty daunting task, but when we finish this, we’re going to take our business to a completely new level. I am not going to go in to Training Manuals because John’s going to cover that shortly.

The final section in the Operations Manual is the Logic Section. The first thing we have in there is the Principles Of Management For Non-Management Personnel. It explains the structure of the company, the management systems we use and is inserted into all non management positions letting them understand what we are trying to do.

The next section is Strategic Work Listings. It is only inserted into management positions manuals and it explains all of the management systems that we use and that we want them to use.

The 3rd one is Process called Key Frustration Process. This is a very good one. If we are really having a lot of frustration, if you go through it, it actually helps you work out what is frustrating you and helps you come up with a solution.

Finally, a sample of any of the forms that you would use. In other words, Accident Report forms, applications for Time Off, Wage Sheet, all of those forms are there. That covers everything in the Operations Manual.

We’re going to go across to Personnel. The swim school industry is very labor intensive. In fact, in our business, wages, bonuses, superannuating, consume .45 in every dollar. In fact, from $1 million in revenue you’ve got $450,000 to pay your people, pay wages, and bonuses. A good personnel program or system will fuse your expenses and minimize your headaches. You need to find them, you need to train them, you need to evaluate them, keep them, and occasionally you even need to father them. Let’s spend a little bit of time looking at systems that we have developed on how to recruit, train, evaluate, develop, and terminate employees.

First thing we’ll get in to is Staff Recruitment, the advertisement. The key of effective staff recruitment program is to develop systems that can be used time and time again by your managers. Your Recruitment System should include all of these things up here: the advertisement, the initial telephone interview, the private interviews, the selection process, and notify all applicants. We’re going to go through all of them, one at a time. First of all, we’re to look at Advertisements. First of all, you need to find out from your local newspapers which is the most popular day to advertise. I believe in America, in most places, it is Sunday. I know in Sydney, it is Saturday, followed by Friday, followed by Wednesday. If you are going to advertise, you might as well advertise on the day most people are looking. The object of the advertisement is to attract as many responses to your ad, as possible. We just started applying with these so you need to have a good headline. Try to write catchy headlines and be sure to back the headlines with good visuals that are catching to the eye. The text needs to explain clearly what you are looking for: are you after baby teachers, receptionists, coaches, casual part time, or people to do weekend work. We like to be precise.

I went to a Recruitment Agency recently. They said 2 things that we have got going for us, the 2 biggest things: no experience – doesn’t mean we wouldn’t take anyone if they’ve got experience. Everyone else, if you look at the papers, is looking for experienced people. No experience and free training. We’ll train you. Our people all have to go through 25 to 30 hours of training before we start paying them. But rather than say we don’t pay for your training, we turn a negative into a positive. Local governments recognize body off-load and charge $200.00 and you have to do a weekend seminar and then forty hours. We say “we’ll train you for nothing” rather than say “you have to do this training” Instead of saying we’re not going to pay them, we say we’ll train them free of charge’ and of course they get a certificate when they have finished.

Here is a headline: “Australia’s largest swim school is looking for friendly, enthusiastic and motivated people, to fill teaching and coaching positions. You don’t need any experience as we are willing to sacrifice it for the right attitude and a desire to learn.” I have got a few samples. I am still playing with these so they are sort of in the formative stages but what we’re trying to emphasize here, the fun side of things: part time, fun, no experience necessary. This one I like: “I like to have fun at work” and “Enjoy working with kids.” That’s the sort of theme that we want to play on. I like to sit and look at things and think about them all the time. I noticed going through the papers recently, in the Situations Vacant, everybody’s just got their ads like a copy, and logo. I called the papers up and said “Is there any problem using a photograph?” They said “No.” If we are going to use a photograph whose ad is going to be the best ad in the 152 papers? This can be quite expensive so I’m playing with a whole series of single column ones as well. More headlines: “Weekend work is available.” “Get a life in aquatic life.” “No experience, will train you.”

Once the ad’s been placed in the paper, you’ll sit back and wait for the telephone call. The aim of the Telephone Interview is to Eliminate Any Unsuitable People. We know there are certain questions you are not allowed to ask. We found, and for us at Killarney, we like to employ people over the age of 18. We prefer not to take anyone under the age of 18. If they call and they are younger, we say “we don’t employ anyone under the age of 18 so give us a call back when you’re 18.” We found if they don’t have transport, they don’t work out because the public transport where we are is not terribly good. So we’ve got a series of questions basically they go through an elimination process. We have A Written Script which means that every caller is going to be asked the same question. Early in the interview we advise them of the Pay Rate and we tell them they are required to do the Training. In other words, if they don’t think the pay is enough or they don’t want to do the training then we want to terminate the interview fairly quickly. Those that make it through that interview then move on to the Private Interview. We do two separate interviews. All interviews are conducted in a private room. There are two people doing the interviewing, one of them must be that person’s manager. They say you make your mind up whether you like someone within five or six seconds of meeting them. The idea is just to get another opinion. The final say goes to the person who is going to manage them. If they don’t work out, it’s going to be them looking for another person. They’re going to have to deal with it. All questions are scripted. Our interview questions are fully scripted and during the interview process, we also give them some background information on the company and about the job, and just any unusual standards or policies that might apply. At the end of the interview, all applicants are graded on an Evaluation Grid. As we go through, we start to grade them on an evaluation grid.

Selection Process: This is pretty straight forward because all you have to do is combine the two scores from the evaluation grid and select the person with the highest score. If two people have a similar score or you’re not quite sure, then you may want to bring them back in again for a second interview. Once you’ve made your final selection you need to notify all the applicants and the first thing you need to do is offer the job to the person you’ve selected. This has happened to us before. We notified all the other people and the first person changed their mind. If for any reason they don’t accept the job, then you’ll need to decide whether to offer it to your second choice or whether to go through the process again. And once the position is being filled, then of course it is common courtesy you should notify everyone by phone or by letter. I’d like to pass you over to John now who is going to cover staff training.

JOHN BAINBRIDGE: We’re not going to tell you a lot about what goes into all these programs and systems. I know a lot of you are going to say “Leave that there, I want to look at that, I want to look at that, I want to look at that. It would take us, as I said, a day just to do Staff Training, Manuals, and so on but we want to just give you an idea what goes in to Staff Training. So today I just want to cover 2 aspects of teacher training. In Staff Training, you can do training of receptions and so on and so forth. There are many other positions you would do in training but for most of us, the big interest is in training teachers. So, we are going to cover Teacher Manuals and Teacher Training Course.

A Teacher Training manual and Teacher Training Course are just part of the system of the Operations manual. John showed you the big manual, he has this manual and within, there is actually the actual Teacher Teaching Training Course. We are going to cover the way we train our staff and the manual and the systems that we do. Let’s look at what goes into a Teacher’s Training Manual. “Where do we start?” Well, we both started with pretty basic stuff. I’ll pull down here and show just the cover of what my training manual looked like in 1981. That’s it. That’s what everybody got. It was the policies, the dress code. That was the whole thing that we have developed within 20 or 30 pages. Everything was in there about how we taught the babies to swim because most of our program was babies when we started and so on and so forth. So it was very basic; and this was John’s first copy back in 1992. There were pretty good illustrations but it was still very basic. You have to start somewhere so it is no use saying, “This too difficult a path to do this.” Just start somewhere and John’s given you the idea where to start. If you teach, a Training manual is probably key to duplicating what you teach. So as we got more sophisticated, of course the manuals grew. You’ve seen John’s and our Operation Manuals about teachers, is all in one book. Where he has it separated, we’ve got it all in one book. We have 2 separate manuals for our Squad teaching for our upper level kids so all of our teachers go through the same Teacher’s Training course because we don’t have a lot of staff with separate pools and so on so everyone who teaches in our programs knows something about babies. If they want to specialize, they do another course for certification.

Let’s have a quick look at what goes in a Teaching manual and look at some of the content John’s got in his. This is one of his manuals which is for their preschool program. If you can’t read it down in the back there, this is a forward introduction program flow and parents’ information. In other words, information parents might need about their preschooler. Then it goes into the roll of a teacher; talks about how to conduct classes, goes in to the methodology of how you teach, professionalism, how you want them on time, and all that sort of stuff. It talks about being a teacher, 153 then it goes into the guts of the program: the program outline, class outline, where you stand, where you teach, what formations you use and so on. It has information on all the different levels as they learn to bubble and swim, they dog paddle, they go the next level and so on so there is different levels. That’s the tadpole class, seahorse, and so on, so they move through their program that way. This is just one table of contents of his preschool program. In our school, we have the whole thing thrown together so we have the whole basic Operations Manual in this manual and we go through it by chapter. So our first chapter of course is just administration. Then we go through outline of all the programs. This just gives you a brief outline about baby program and so forth then we go in to a big section on child development because I think this is key in developing any teaching program. They’ve got to understand what they’re working on by trying to work on a car and don’t know anything about it so you got to learn how a child works.

Child development is very important in our program as well as John’s. Teaching methodology is included — we go in to how you teach and include things that are involved in teaching. Then we go in to looking at the different programs: Our infant program which is 2 and 3 and under; these are the next program in chapter VI, the baby grads are the children that graduated from our baby program. They can graduate as young as 2 if they can swim and are ready to go in to a group. And then of course the 7th chapter is our preschool program which we call “Tadpoles” and we have 3 levels in there and it goes through explaining group formations and all that sort of thing that would work in your program. Then our next level up above the preschool program is our school age kids that we call Learn To Swim program and again there are 3 levels in that program and they move through and talks about stroke drills and so on they might do in level III so that goes on and on. Then chapter IX is how we would work with adults. There are appendices on information that might relate to in reading of the manual. That’s what’s been put together, over probably 10 or 11 years into this teaching manual that we have developed.

Here is a sample of how we set out our lesson format, our lesson structure. All of our teaching’s fairly structural. In our parent class, each of the classes do the same thing in a 1/2-hour lesson at all our centers. On this side is the purpose and comments of why we are doing it so the teacher understands what the activity is, so they can relate that to the parents, so our classes are fairly structured in the way that you might think is formerly structured. There are certain things that they do at certain times at each of the lessons.

It’s not all that expensive to scan all these things into a manual. We’re in the process of revising with pictures; it’s easier now to put pictures into a document, a lot cheaper and quicker to do. He has gone ahead with his really well and it’s really a great piece of art and a great piece of literature to be able to read, for a teacher. Also, as well as pictures, you can use charts and activities so he has those also. Formations in both of our programs are really important so he has diagrammed here all these different programs and they are all coded so in the program, when you might be explaining to a Level I part of your manual how the kids would leave the wall in a staggered way, progression, there would be a little icon put in there so they would understand what that is so this all helps laying out your manual and sending out a lot more detail and a lot better. Recently, both of us have started adding video to our programs. We haven’t finished them all but they’re underway.

We have 6 programs and each one has an in house mail box. We put videos and other teaching materials in there and they are used for the teachers to take home and help supplement their manuals with these video sessions, so it is another way of using videos to help with the training program.

So Teaching Training Manual is not sufficient on its own to train staff. What I would like to do now is just walk you through our system for training teachers. Giving them just a manual or looking at a video is not just the way you would start to train and get it done properly. As mentioned, John talked about an agreement to teach so when we have got the person employed and they are coming in for their first day, the training program commences with establishing a personnel file. It is simply a letter size hanging file with the teacher’s training name on the tab and then the training supervisor assigned. That might be the manager of the school or might be your lead teacher or a head instructor, whoever is in charge of teacher training. Then they come in and sign an agreement, an agreement to teach – that’s what John was talking about. In our schools, we have them actually pay to do the training at our centers so they do a course that I’ve developed over the years and they pay me $20.00 or $25.00 it is now, to do this course. We do this for a reason because in this country we can’t train people without paying them so we have to pay them minimum wage. When I had 5 schools and a staff of 75 or 80 teachers, it gets to be very expensive if you have a turn over of staff. It works because it has been challenged in the Labor courts and we actually won because we had this agreement set up. What they paid was separate from the Swim school. So if you have your own Swim school and you go in to a training course, separate the two. In this country it works that way and it works well. So they pay their $25.00 is an agreement to teach.

The next thing they do is read their manual, complete the workbook, and do 25 hours of teaching. This explains to them what they are going to be doing during their training. Once that’s established, you’ve got them in, they have signed the W4 form and all that sort of stuff I talked about and they have their CPR card put in and they are ready to start, they are issued a training check list. This is put at the front of the file. It is a document that the person who is training the 154 teacher, and the manager, can review periodically, to make sure they have gone through the various stages of training. This training check list just has their name and date they have received their teaching manual, the date they were given it, and the answers have been completed at the back of the book to make sure they have read the manual.

Second part of it is the deck observation. Then they go in the water for training and if there is any video supplements given to them, we give those out. They also have to attend an orientation which we do in all our schools every month where we explain to the parents what we are trying to do with the kids. At that first meeting, they are also given a training log. This is a 5×7 card. This would be the front of the card, this would be on the back of it. This is what the training teachers take away with them and their little outline of where they are going, what location they are going to watch training as, what hours they’re going to watch and what they’re going to watch is covered here. We set out, in other words, their 20 to 30 hours of training that we have them do. Then it goes through 3 stages. It goes through stage 1, which is Observation. So after they have read the manual, then they go and observe classes and there are things they have to fill out on the Deck Observation sheet.

In the manual, they have to write down certain things they are observing in the classes. After they have done Observation, they then do Stage 2 which is assisting teaching in the water. They jump in the water with 1 of our head instructors or 1 of our lead teachers and they just observe and handle some of the kids during routines of what they are doing. In other words, the trainee gets the chance to physically work with the children. The last part of their training, they get in with the teacher again, probably the head teacher, or the head training teacher and it would be his class that he stands there and watches them teach sections of the class. In other words, we see if these people can do what we want them to do. Once that has been completed, they come in for an evaluation. So that’s kind of how the training goes. It goes in 3 stages as mentioned. After the 3 stages have been completed, it’s time then to review the candidates training. So we then have a performance evaluation or a training review part goes on in the program. If we keep them, we give them back their $25.00 in their first pay check. So whilst the training may cost them $25.00 if they are employed, it is refunded. After 3 months, there is a performance review, the candidate can be released again. In our Agreement To Teach, we actually put them on probation for three months, working in our schools. If they are unsatisfactory, we can terminate them at the end of those 3 months without them having to claim unemployment saying they were get off because there was no reason, so we document why they were not satisfactory and released so we can weed out those teachers that don’t turn out very well after the first 3 months. Of course if they are satisfactory, we give them their club membership. We work in a private Health club so they are part of the perks of working in a swim school. They do get membership to the club and that period of time their pay can be also be reviewed. We review their pay rate so we can give them a raise if we think they did really well in the first 3 months. After 3 months, there is a performance review and the candidate can be released if their performance is unsatisfactory. If satisfactory, as I mentioned, the club membership is given and their pay is reviewed.

I want to go in to evaluations and this is the performance evaluation that’s given, not just to persons at the end of their 3 months but this is our annual evaluation that every staff member does in our organization. It is just simply a form that goes not just on their teaching skills; we think that communication with the kids is imperative, the professional ability in other words their reliability, punctuality with the class, their attitude, how they influence the staff and someone else, how they influence morality, leadership skills. We start making notes on these. A simple scale where we go from 0 to 5; 0 of course meaning drastic improvement is needed, 5 meaning there really is a high degree of excellence in their teaching, or in their professionalism. On the 2nd part of the sheet, or on the back of it, the person who evaluates the person, the head instructor gets to write comments, the manager writes comments on the employee and the employee gets a chance to make comments about their evaluation, how they feel they were presented. So it is a formal evaluation that’s given annually and they do get a pay raise up to $1.00 an hour every year of their evaluation. So if we start them at $8.00 or $7.50 an hour, the next year when they do their annual evaluation, they can go to $9.50 or $8.50, whatever the dollar amount is, or a proportion of that. We very rarely give them a whole dollar but it could be .95 or .80, depending on how they perform throughout the year. Periodically through the year, you might need to evaluate somebody because they may be doing something wrong and like you people know in coaching and teaching, if you keep criticizing everybody and just give them a negative, negative, negative, they turn off. It’s the same in evaluating a teacher. If you find something going wrong, we do have a head instructor doing an informal evaluation on the teacher and we praise them on the good things they are doing but down here we really visit the whole key of why we’re having this thing, points to improve on. It makes, instead of criticizing people’s teaching all the time, it’s a good way of making a positive thing out of an evaluation. That concludes staff training.

Now I’d like to look at how staff can be evaluated on an ongoing basis. We call it Staff Development is the next thing. In staff development, this is probably, I think, one of the key things in our business today as we are becoming more professional and children are staying on. We have to keep 155 them in our programs so I think how you handle your staff and what you do with them is really critical in maintaining your staff in keeping them coming back year after year. In our program, we typically employ mostly college kids in our teaching program. We try to get them in their first year in college if they are going to be going to a local school, because we know then they have 4 or 5 years to get through school and we find that if we keep a teacher for about 4 or 5 years, you are going to get a good program taught and it is quite a satisfactory thing. If that can happen, you are only going to turn over staff every 5 years; so it works kind of well with us. In John’s program, he has quite a few mothers that work in his preschool program and baby school program and they work out to be very good employees as well, someone who doesn’t need a huge income but wants to be stimulated in life, and enjoy children. So staff will stay if they feel appreciated.

It is the job of the supervisor or the Center’s manager to provide leadership and motivation and it comes time though during the running of the swim school when leaders leave or have to be replaced. When this occurs, it is so much easier and better that you can find a leader within your organization. What I am going to do is tell you a couple of little stories about buffalo and geese. I read a book a couple of years ago called “The Flight Of The Buffalo.” We were having problems with motivating staff and keeping them involved in their program. We found when we had a head instructor leave, there wasn’t really someone to fill that slot. I read this book and found it really interesting. I think there’s something we should look at really seriously in our business. The book goes on to tell the story, the analogy they use is this head buffalo becomes the lead goose. I don’t know if you know much about buffaloes and geese but buffaloes run around in herds, and the Indians got really smart on how they could kill them back in the old days with bows and arrows because they could run quite a long way and they could run fairly fast over a long distance, faster than a horse. So what the Indians used to do is they come down and get them in the valley and they’d go charging after them and their goal was to take out the head buffalo so once they picked him off and he was dropped, the rest of the herd would run around randomly because they had no leader to lead them out of the Canyon or keep them going so it was easy for them to go and slaughter the rest of the herd.

The geese story is kind of little different. I don’t know if you know how geese fly but they fly in a formation, there’s always a lead goose and if anyone takes out that lead goose, in other words if someone shot that goose, though their instinct or whatever it is, another goose would just take up that slot and he would lead them south and they would keep flying on their migration route. So geese are kind of what we think our swim school should be. We shouldn’t run our swim school or business the way a buffalo herd runs. If the lead buffalo gets knocked off, the whole thing goes in disarray and this happens a lot in most swim schools and it happens a loot in most swim coaching programs and I am sure you people relate to that. When your head coach leaves the whole program almost disintegrates because everything revolves around him unless he has been able to bring people up through the organization and have them ready to take up the slack and you’ve got a system and a program where everybody works in it. So that’s a little story if you want to read that book. I think it is really interesting and something you’ll get a lot out of.

We do have every year, apart from staff development program, annual in-service and this sort of program John and I do annually, it happens just prior to our busy season. Though we are year-round, the seasons do have some influence on our product that we teach. John’s curve on his income is not like ours because their seasons are reverse. November, December, January, that’s the middle of their summer. They have more lessons of course than they do in June and July so there is a curve, a little bit, on how busy you are. So prior to our busy season, we both have in-service training. They can run anything from 1 day to 2 days to a day and a 1/2. We have 1 night where we bring in all new employees. In other words they haven’t been to an in-service before and we go in to such things as history of the school, philosophy, job description, chain of command, and so on. Then we have 2 nights or 2 days and these are the sort of things that we cover. At the end of it, we have a swim meet which is a lot of fun and activities, and we serve pizza and so on and so forth. It’s a way to get all the staff together and have fun.

If any change we make to our manuals or anything we need emphasizing in our program, we hit at it this time in in-service training. In-service has two functions: to get the staff to feel like they belong to something and, of course, the training. It is a lot of fun, and of course to put out information to them on any changes you might have in your program.

What I want to do now is go through some of the functions you can do with your staff. In addition to annual in-service, we also do workshops. Workshops are just periodical, we might find our baby program might need a revamp so we will bring all our baby teachers in and just do a 1-day or an evening workshop just specifically work on one activity or we might find side-breathing with our preschoolers is not working. The kids are not turning their heads at the side, they are lifting them first, before they turn. If 1 or 2 aspects are wrong with your program, you can call a workshop, get everybody together and just specifically zone in on one topic.

What I will do now is go through another part of our staff development which is staff functions. This is what John has done really well. We have picked up on his ideas as well. I think it is really important that you do a lot of work with your staff in staff development because these are the sort of things that get people to want to keep coming. Some of the activities you can do simply: we just have the picnics, we do the games, and activities and so on – you can do baseball games, or whatever else, but you allow them to bring their families and children so you make it like a family activity. This is one thing where we can get back at Managers. There are managers at three schools. The head instructors got to fill up a pie dish with a bunch of cream and slaps them in the face because I was sick at seeing them rage at them all the time. You can get creative in a lot of the things you can do on these activities. Here is John’s school staff playing ‘bang the balloon.’ They have to pop the balloon, they all get a balloon tied to the leg and they run around the sand. The last 1 left with the balloon on is the winner. These are all crazy games, things, I am sure you have all heard of. This is the Christmas party. If you have been to any of these parties, they are kind of really different. Here is another staff thing that he does which is kind of interesting. You probably can’t see this down here but this is a nude photo. It is kind of tastefully done. It’s a nude calendar of their staff. Of course they don’t give it out to their clients. It is usually kept amongst their staff, for the girls. When you see a rake in front of you, a baseball bat, a fin, a flipper, or something like that, it’s a nude male one for the female staff to take. Kind of a cute idea. They are the sort of activities you can do. There are many other activities. We play broom hop with our staff on the ice. Get them on sneakers, give them a broom and something to flip around – it’s a riot. If you are going to keep staff year round, you’ve got to have a developmental program which makes it fun to come to work and a reason to stay. So these are the functions and activities, a real integral part of staff development.

Sometimes, even the best personnel programs though, don’t work and we have to terminate staff. Staff terminations are probably among the most poorly orchestrated functions that managers perform. This is a job that as no caring person, we really want to do and is generally not handled very well. Should you have to perform this task, having a termination process, will make the job less stressful. Here is an example of a termination process that John Coutts has developed in their swim school over in Australia. The first step in the process is you need to select a day and a time. What we all recommend is at the end of the day because there are less people around. The next step is to have their final pay check prepared; this should include any unused holiday pay still owing, bonuses in some cases, or any severance pay if you have to give them. The meeting should be conducted in a private room. You need to get straight to the point and end the meeting quickly. Don’t go in to the reason why. Just point out things aren’t working out here and I’ve decided to terminate you. Nothing can be gained by prolonging the meeting so you shouldn’t allow them to give the reasons why, and go on and on and on. Then you should collect any company property, including manuals, and keys, etc., and escort the person off the property. This will ensure there is no conversation with anyone who is still at work. The next step is to prepare and circulate a termination memo to all staff. The memo should not criticize the terminated employee. And finally, you need to remove all reminders of the individual’s presence: photographs, memos, name tags, etc., from the facility. You literally want everybody to forget that the person ever existed. It sounds cold, calculated, but that’s what it has to be. That concludes the Personnel Section.

Now let’s look at the Program. We’re going to cover Programming that will lead us into Budget and Record Keeping and the last topic, will be Marketing. We’ll start on programming. One of the first things that influence your program, I think, or one of the main things that influence what you teach in your program is your facility. I think this is probably key to how your program is taught, when you teach, and so on and so forth. Most of it is controlled by what facility you are working in. That’s why when we had an association of swim schools we decided not to develop any manuals on really “How To Teach” because it is really specific, often designated to your philosophy whether you’re year round, whether your program is private, semi-private, and so on and so forth. We’re going to try and go through this. The first one is your facility. I’ve got a few slides here I might run through and we’ll show you some of the pools. This is probably where a lot of people started – in back yard pools. This is where a lot of swim schools in Australia got their start and in America and Australia, and you can get more creative with your back yard pool, even someone stuck a bubble over the top so that they can extend their season. You can get more creative than that. There’s another outdoor pool, Jan Thomas’, in Northern California. She’s got two of these in her backyard. She has a few acres and then she tried to put a cover over to protect the teachers in the summer time to stop them from getting too burnt and some other people have put glass structures over their back yard pool so there’s lots of innovations you can do in your facility. There are many things that influence us. This is another commercial pool up in Half Moon Bay, northern California. This is back of his house, again, but back of his house opens on a commercial street so he has an opening on his front street.

There are many ways we can do our facility. I don’t know if you recognize that diagram of the facility but that’s one that was put in down south of here. That’s one that Mark Schubert developed. He has 3 pools and a teaching pool. So many people have worked out what they want to do, and how they want to do it but most of the money was supposed to be generated in this pool here. It wasn’t enclosed, it made it hard to make the thing work. I think you know that facility 157 now, here is a tennis court. Many of us have to teach in other primitive areas to run a business – like a dam, I think, where someone has put a swimming pool and school in there. You can get rivers and lakes where people put lanes in – all this determines a lot to do with what program you are going to run. And of course you have got your typical University pools which are deep water and very difficult for teachers to stand up in, and you’ve got your High School pools where most programs are taught in California anyway, and they are all outdoors, which makes your season limited because you can only teach in the summer time.

The facilities that John and I kind of believe that need to have if you want to run a professional, year round, successful program, is to go indoors. That’s an outside shot at his facility in Sydney, the Killarney Swim Center, and that’s looking from the reception area out to the 25 meter pool. Up on the right hand side is their baby teaching pool, their preschool pool which is which is 16 meters by 3 lanes, but that’s their 6 lane pool. Where these blocks are it used to be 6 feet deep. That’s where he filled in the pool with the concrete so that’s all now 4 feet deep, or 3 feet 10 deep all over the pool.

Here is one of our facilities. We work, as I said, in a health Club. The pool area is in here. That’s an alcove area. This is the interior of what the pool looks like – it’s a 4 lane 20 meter pool with an alcove area and the teaching pool is in the back there, 32 feet by 18 feet. We have use of this lane, this alcove area, and that station there. So we only have 6 teaching stations we can use. In the afternoon, we get the pool for our squads for an hour and a half every day. It’s not a lot, but we are able to do about $400,000 out of that facility. In our baby teaching pool, we use ledges for the kids to stand up on. These sort of platforms in our deep area we use for preschool and babies work really well. These are platforms where the kids can be independent standing there and we can keep the groups together.

This is kind of what we think our next school is going to look like. How do you like this building up in Northern California? That’s the outdoor pool, this is the indoor pool. All this is gold up on top. Gold plated stuff. We don’t want things to corrode in our indoor pool. That’s Hirst’s Castle, in case any of you recognize it. So I think you can see there are many, many, different facilities out there and they do run successful programs in them. What you’ve got to do is adapt your program to your facility.

So what else do you have with your program? Well, you think about who you are going to teach. Some of the programs can work mostly on babies or you can do upper level groups. In other words, you’ve got to work out who you are going to teach. Babies are a big part of our program. As John mentioned, 75% of our income is under the age of 5 and our baby program, 3 and under is pretty big. We do about 3,000 lessons a month in baby programs in our schools and you can teach the lessons either privately or you can teach the lessons in groups. It depends again on your philosophy, and what you want to do. There are many ways of teaching it.

Of course, when you teach is important as well. So who, what, and how you teach is really important; the time of day when you teach is important. It’d be stupid to try and do babies in the evening. That’s what John Coutts says. Well, that’s when our busiest classes are. Actually, he does that now. But you’ve got to work out when you can get the people in. It’s no good to try and do an adult lap swimming class at 10 o’clock in the morning. You probably won’t get a lot of them then, but if you tried you probably could get some. When you are going to teach your class is as important as what you are going to teach.

Then you look at how is your program going to flow from one part to another. I think you should do a flow chart of your classes and how they move from one section to the next, so you, your teachers, and your clients know where they are going. This is a flow chart of our schools. It looks a little complicated. Three year olds and under can enter as a baby, or they can enter as a preschool swimmers up here, at the 3 to 5 years old age group or, they can enter as a 6 to 12 years old which we call “Learn To Swim” program, and 13 and above are adults. Under this flow chart, they now move through different levels so we have babies 3 and under going in to baby grads who could still be 2 or 3 years old, and they have another level they go in to there. Once they turn 3, they become a Tadpole. Anyone then will move across to the next level or the age group. We have different levels they flow through. It is kind of like most programs, I am sure, have a flow chart, and I know Swim America does kind of a station thing so you do have a way of moving children through the program. A flow chart is really critical in developing and keeping your clients so that they know where they are and where they are going.

Scheduling is another nightmare and problem that we have in our programs, but it is part of programming. We could spend a whole one day seminar on how you schedule your lessons on this massive way. John gets 1.4 million worth of lessons in a pool; we do $400,000 in 1 little pool. How do you schedule all these classes? Well, it is a nightmare but that’s something that you work out and work to suit your own facility. This is one of our sign-up cards. Again, it is just a 5×7 card and it has all the information, age, and all that stuff, and what level they are coming in to and where they are going and everything else — their receipt numbers and payments and on the back of that is more receipt numbers and payments. We have this Policy Card which is just a sheet of paper that attaches on top of the sheet which we have the parents sign and we give them that as soon as we sign them up. It includes what our policies are, about make 158 ups, and all that sort of thing.

How do we schedule all these people that you are talking about? This system we’ve got is very similar or almost identical to John Coutts’ one. We have color coding on our schedule sheet and the schedule sheets look like big books. One page is about that wide and we flip it over and that might be the morning program. The afternoon program would be underneath it. These color codes mean all the different levels and classes there are so parents will be written in that way. Baby grads are blue, beginner Tadpoles are black when they get out of the beginner’s class and so on and so forth. So that’s our beginners there in rectangles, we have circles for Learn To swim, and we write Squad in there, and adults so that’s our system. If it’s a morning program we go 9 to 12. The afternoon would go from 3 o’clock till 8 o’clock in the evening. Then, all the classes’ names and everything will be written in there. You might say “why don’t you put it on a computer program” Well we have, and we are developing that but it is very complicated to write these sort of programs. John’s spent some time and money doing it; it’s almost there and we believe in another few months or year or so, we’ll be all on a computer program. He spent 28 grand on it and it didn’t work so he’s still doing it manually. Some people say how you can’t do those volumes manually. Rubbish, you can. If you systematize and work out how you do it, it can be done. All of ours is manual, and so is John’s.

Awards: This is, as I mentioned, the Flow Chart. This is how we give out our awards. Each one of these levels here is where the kids can enter, so they can enter as a baby. This wave, this is our logo. If you notice, this is what’s up on our wall. Then we have a preschool program, the Tadpoles, and the Learn To Swim. As they move through the levels, they get their certificates – if you want to call them that; we don’t like to call them certificates because it implies that we certify somebody, so we call them awards. And the color blue is obviously the entry level when they get to move from that level to the next then we have the pink one which is the swimmer’s certificate. Each of these things they are working on doing: either pop up breathing, dog paddling, or it might be side breathing, and here we even introduce the basics to all the strokes as well as try and get a basic free style developed. Then they have to go into their stroke level which is the yellow certificate and here we are trying to develop the correct breathing in all the strokes. Then we have two squad certificates for the Junior Squad and a Senior Squad and there are two levels in those Squads that they work through. Everybody sort of has their own level way of doing programs, and way of doing your own awards, and I am sure you have those but they are real important in a program so that you can give directions to your students and your teachers know they have some responsibility in what they are trying to do and allows the child and parents to realize there is somewhere to go after they have finished their awards.

Our certificate does not read that you have now finished this and you have got this award. It reads something like “you are now allowed to move to the so and so group.” So on the certificate it says you have done these skills and the school now allows you to move to the next group so it is presuming you are continuing on in our program. So finally you get to our Squads. That’s the same concept.

This concludes the Programming part We are going in to Budgets and Record Keeping. In Budgets And Record Keeping, we are going to cover program potential, budget setting, weekly reports and analysis, monthly reports and analysis, and key indicators. What continues to amaze John and myself is that we often go to swimmers and we ask them “What’s the potential of the program?” and they say, “Oh, I don’t know, maybe 300, maybe 600, I really don’t know.” It’s kind of disconcerting. How many of you people out there know what is your potential program If I asked you what do you think your potential would be, hands up if you think you know what it is. OK, so that’s a few of you. That’s kind of still amazing to me because I think you people, most of you have coach backgrounds and work with children and even young adults, that you know, sort of the standards they’ve got to get to get to a meet. You think if you are running a business or swim school, you kind of know what’s your potential or where you can go. What I am saying is Record Keeping and Budget Record Keeping is something that’s probably the worst thing in our industry. It was the worst in my business, it was the worst in John’s when he started.

I think we really need to have business owners or potential business owners look at really getting in to record keeping and setting budgets because this is the whole health of your business. It predicts where you are at any certain time and where you can go to, so one of the first things that you look is where you can get to. Where’s your program potential?

John already went through his diagram of his pools and so on. I’ll just flip through some of these in case you didn’t get it last time. This is his baby pool or his small pool or his preschool pool, just 16 meters. At the top there is 3 lanes wide, he divides it up in those teaching sessions, so these are all lanes. He gets $10.38 a lesson. If you divide that in monthly fees, that’s probably the average of what a lesson costs so when you go down here and you work out, you can do it real easily. There are many ways of doing this. If you want to follow this quickly up on the screen, you can. What you are trying to do is work out what your income is per week so all you do is multiply the number of lessons. He says he can do 625 lessons in this pool here from 3:30 to 6:00 pm. These are real figures that he gets in his facility, or what the potential is. So from 3:30 to 6 in the afternoon, which is 2 1/2 hours, he can generate 625 lessons 159 paying $10.38, which gives you maximum income per week $6,487.00. 48 weeks of the year he is open, so he can get $311,000. There is potential to grow if he can use that spare lane which he likes to use to evaluate kids or put a couple of kids that are having problems. This is the same afternoon class with the big pool. Remember I showed you that 25 meter pool? Now he has divided this up at the same period of time into a couple of teaching stations as well as having some lower level Squads running and upper level Learn To Swim classes. You can see here that he gets the same sort of income developing potential over 48 weeks, $119,000.00 and there is also potential of growth if he takes out that spare lane. But that’s what he likes, to have for kids coming in to the program to evaluate where they should be and any problems they might be having in one of the classes, he can pull one of those kids out and work with a spare teacher in that teaching area. Still on that same afternoon period, 3:30 to 6 o’clock, this is where he does more of his upper level Squads. If you add up all of those programs together, you get $847,000.00 as the potential of that facility and that’s from 3:30 to 6 in those pools. He is running almost at 70% potential now so you can see that the figures he is talking about is $1.4m, isn’t a lot of baloney, it’s happening.

The potential of one of our schools in Orange County: Remember we only have the 6 teaching stations. These are the monthly incomes we worked out. That’s what I can get a month, times 11 is about $718,000.00. My potential, I think, is about $400,000.00, around that or a little higher . We know, speaking of the Japanese, that you can take this potential we just showed you and divide by 2 and that’s a realistic goal. 50% of what your potential is, is a real easy realistic goal of what you can do. So all you people out there want to know what you can do, do that simple exercise, work out all your teaching stations, all your income, divide by 2 . John is more ambitious because he is systematizing, making things more efficient and he is getting his up to nearly 70% of the gross of his potential. So that’s how we work out our program potential.

We are going into budget setting now. This is another important thing on working in your business, to set a budget. Just as you would set a house budget or your own income on what you are going to spend it on with your wife and your family, so too you do in your business. There are many programs or simple ways to do it but the first thing you’ve got to do is develop categories of what you’re going to put in your business. I’ve got categories and subcategories here. I’ve got accounting, advertising, auto expenses, awards, inservice training, legal and professional, labor, and it goes on, and on, and on. Then we have personal draw. In other words, what we take out of the business in the year, pool expenses, postage, refunds, and so on and so forth. You work out all your categories and hopefully at the end you show a profit at the end of the year.

Set your categories out, and work out how you are going to work your budget. We are going to get to that in a minute. There are many programs I want to show you. There is Quicken and there are many other programs like DAC Easy, and Peachtree. There are many programs you can do yourself and if you want to run your finances yourself. Month by month, you need to get your program working out. The Quicken program gives you a budget sheet for the whole month. Then you start making guesses or calculations and budgets really are just calculated guesses but if you keep records from year to year, it doesn’t come that difficult to predict what’s going to happen the next year. Once you get one year set up in this Quicken program, you just say ‘Give me a budget for 1998,’ and it will print that budget for you, giving you the statistics you used in 1997, It will list what you spent in 1997 then you can go back and adjust it and try and get an idea of where you are going with your budget.

You should get financial advice. This is probably one of the weakest areas in my business. I’m still there. I still don’t have a finance accountant in doing my stuff. I still do it myself, but within 6 months, I definitely will have somebody working , doing all this budget work and setting a budget and paying bills, other than myself so, I am still in that box in my business, as the financial person. I am not a financial genius and by the weakness in my business, I’d say that’s where it really is, and that’s the weaknesses probably in most of our businesses. We aren’t financial experts so I think out of all this budget setting thing, my biggest advice to you is get a budget set. My biggest advice will be to find a financial advisor and count on somebody that can review what you are doing if you are doing it yourself, or pay somebody in an organization to do all that work for you. It is a critical thing, I think that will turn around your business.

Now we’ve done budgets and got them in place, let’s look at records you need to keep and how to analyze them. We are going to go into record keeping. At each of our schools, I have what’s called a Swim School Year Book. Just to give it a better name, but it is really the Bible of how our schools are managed. We have 5 centers, 5 managers, and I look after those 5 people. They have this book and I have the same book in my office for each of their schools and its set out in sections. These sections are in the book: a business summary from last year, our goals and what we are trying to achieve, and the potential for the center. We have our marketing plan in there, what it is month to month. We have manager’s reports, sign ups, drop outs, office hours, so on and so forth. All of these things that we are going to show. I am going to show you each of these individually in a minute but that’s what is actually in that book and that’s why it’s that thick because there are weekly sheets that they give me which are their weekly reports.

This is the weekly report that is faxed over to my office every Tuesday from the previous week. At the top here gives 160 me what income they deposited on what days. That’s the week number or report number, that’s the same as 52 weeks in the year, so that’s week 29 and they put that amount of money in the bank. They taught that many number of lessons; in other words, pupils that are actually taught in the programs that we have running and these were the classes that were taught. So weekly, you could do a real mathematical thing in your head and work out what your efficiency rating of your classes are by just dividing the number of classes into the number of pupils. It gives you how many pupils are in your group. I’ll show you that in a minute because we analyze that monthly but you could do this weekly by just looking at those figures. Also, what money came in from different programs is listed there as well because its critical for me to know what we are making out of each of the programs. Some of them aren’t very efficient like the squads in the upper level don’t make so much per hour. Then, down in the bottom is what the monthly income to date is. I get what they are making each month, up to that point or that week, that part of the month, so 19th July, they have got $38,000.00 in. The budget I set was $37,000.00 so having a good July over there in Fullerton and the difference is a plus. Then that’s where all the deposits and money came in.

That sheet has a back to it as well or a second sheet and that’s the center’s report where they give me weekly information on what’s happening in their school. I get an administration report on what’s going on. In this report here is a note about a pool problem. I am not going to read it to you but she might say we had problems with the temperature and that means then we would have to go and find out what’s going on with the boiler or whatever is happening. Anything that is happening, staff meetings, and their marketing reports are weekly. What they did in their monthly marketing to achieve their monthly marketing goals, is written down here weekly. Because I’ve got to keep a control of that because that is a cost that can run out of hand if you’re not efficiently looking at your business so we write down here all the people that work on the desk and how many are working on the deck and how many hours they taught and the total goes down at the bottom. We run our school from 90 to 97 hours of weekly reception total hours. Also, the head instructor is in charge of all the staff that’s teaching. We get their hours written so I can check to see where they are actually teaching and making sure they are covering major shifts in the school.

Next part of the weekly report is the tracking of our marketing or our sign-ups that we get. This sheet is given to me every week. Down here tells me the number of people that signed up. These are people’s names that are written in so they write the person’s name in. Anyone who inquires and doesn’t sign up over the phone or then, we just check off where they heard about us. Some of the things across the top that we use as marketing is word of mouth that John talked about as one of the main things, we use Yellow Pages, we put big ads in parenting magazines and so on and so forth, but this is just where your people may come from and we check that off so we total those up at the end of that week and that gives me an idea of where our marketing is working and what sign-ups we are getting.

Now let’s look at what we can do monthly with these reports. Once I’ve got them weekly. These are a physical piece of paper that comes to me then I sit in my office and use the Excel spreadsheet program which I put all these figures into which gives me a monthly picture of our business or our schools. If this were a grid of an Excel program, above the total will be all of the schools will be 5 individual schools so this whole program reads all the schools and it just simply totals that automatically when you tell it so to do the calculation for you in the program. That’s kind of our monthly budget – what we put in here, and this is all good for the managers to be motivated with. We show them what income they brought in last year for that period of that month, what their estimated income was. I sit with them every December and we work out our budget for the next year so its something we both agree on and not something I just sit with ‘high in the sky’ dreams. It is something the 2 of us agree on and then this is what they actually bring in each month and there is a percentage of increase or decrease over what we did last year and this is year to date calculations. Those same figures there are just transferred over to give you a progression monthly of where you are on your goal.

I remember I said our goal was $1.1m. this year for our schools and at the moment at the end of July, we are about $40,000.00 above our estimated budget so if nothing happens dramatically, we should make our budget and this visually gives us the same picture at where we are gross. Remember that’s done for each individual school, that’s the total. Another important figure that you need to look at is P & L, the break even point in where your business is. This is one of John’s reports which talks about your break-even point. In any business, you should know where your break even point is so that you have a number that you’ve got to get in there or gross amount of money to get in before everything is paid for: the mortgage, the heating, and the salaries of your teachers – that’s the break even point. That’s the gross income brought in in each of the months, and it tells you a picture. Analyzing this graph, you can just look at it visually and say this is a healthy business because he has got his income going up, his break even point going down, so the gap there, is quite good. That gap there, is his profit. That looks pretty darn healthy to me. I wouldn’t mind a piece of this.

Remember I said we keep those lesson counts? Well, monthly I like to see how we’re doing from lesson to lesson and this is a sheet taken out probably a year or so ago. You can look and see our baby program, which is these 2 figures 161 combined, these kids are 3 and under as well as we’re doing about 3,000 baby lessons a month. You can tell whether we are improving or decreasing monthly on those reports.

Another critical thing you need to analyze is your wages. These are the totals of all the centers’ wages that they spend in their centers so this is the running costs of each of the individual centers. (I am not going to show you what we pay our receptionists, what we pay our teachers, what we pay our managers, what our administrators’ wages are.) So monthly, we’ve got what income we brought in down here to compare wages to income. This is one of the critical pieces of information you need to know in your school or your business because wages are the primary number one expense you will have so you need to keep a close look at this. We’re trying to keep our wages, at the moment, around 38% and below. You can see we’re doing a reasonable job with that right now. In here, remember this is a Center’s pages, my wages are included because I don’t physically work in here and neither does our program training director, Dave Dubois, or that person who does Marketing, and my Finance person who is myself so the draw I take is in there.

The other thing I like to look at every is their monthly program analysis sheet. The income from each of the programs is in here monthly including the number of pupils taught. So all I have to do is add up out of all those weekly sheets people give me, because this spread sheet is in the computer. All I do is put in these figures – the gross money that came in to the programs, the number of lessons, and the computer just spits out all this information automatically. It doesn’t take a genius to work this out. I can do this in a few minutes, getting these programs and these reports printed out. It tells me what I am making per hour out of each of the programs. You can see our baby program makes a lot — $76 an hour, our Squads only make $42.00. This is a group where I’ve been a little idealistic and I know a lot of parents want to get out of this classes early so we allow them to go in to this group and these are only 2 years old or 3 years old. It’s very hard to work with anymore than 3 we feel in a group effectively so this alone doesn’t make a lot per hour. If you look at the numbers too we don’t teach a lot of these classes. There are only 419 lessons taught in a month on Baby Grads. We want them in here or in here because that’s more financial and then down in the bottom, you simply add up all the hours taught in the school and divide that into income brought in and that tells you how much you gross per hour and then down at the bottom, I put what we brought in last year at the same period of time. Hopefully, it is higher and that also tells us a lot about the health of our business.

This booking efficiency down here tells me how full our classes are and if you don’t keep your groups full, the manager’s lazy. If he doesn’t want to do it, then these figures can suffer. So we set levels. This has to be about 66%, this one has to be about 75%, all these have to be above 66% so I’ll be a little bit concerned right now about my Learn To Swim classes particularly in July, trying to convince them to make them more efficient. Monthly you can also analyze your marketing efforts. Remember those sheets, those logs I showed you where we check off all the people who heard about our program? Well that same Excel program puts all those in into our monthly marketing report and I can tell what’s working in our program; we can draw graphs, we can see whether our marketing is working or not. These ads here that we put out in our Parenting magazine, are very expensive and big ads, but you can see they do draw a lot of people. They draw 24% of our inquiry.

Another thing that’s critical with tracking your program is to follow-up on your drop outs or your no show people that don’t show up for lessons. So every morning shift, people write down the people that don’t show up and we call them straight away. In the afternoon, in the evening shifts, same thing happens, we call them 3 times. If we don’t get a response within 3 times, then we take them off the books. So, we work out how many people are dropping out of our program and, of course we’d like to get a reason why because they can tell us things about the program or the facility that aren’t working, that people don’t like, and we can improve them. This is an important thing to know why people are dropping out. It’s an important thing to call them back and make sure they are in the program because you could be carrying somebody for a month that says they are showing up but they’re not there and if you don’t call them back, you are wasting a spot where someone could get in there and pay for it.

They pay in advance. You see we don’t pay sessions, they just pay a monthly fee by going to the preschool where you just pay by the month. We have a $44.00 a month fee for our students to come once a week, and the majority of our program is once a week. If they come twice, its $75.00 a month and that’s usually for the child who is afraid the first time in, we try to get them in twice a week, if we can. But the majority or 95% of our program is just once a week, $44.00 a month. They drop the check in the first lesson every month. If that’s not collected, then we want to know why. If they don’t show up, we want to know why so that’s why the no show call up thing is so important because you might be carrying somebody on the book that doesn’t show up and is not coming back.

They come the same time, same place, every time with the same teacher. The minimum we pay our teacher is $7.50 an hour, the maximum is $12.00 an hour. John’s is different.

That’s the monthly market analysis. Now we also take Pool Logs. I mean you all probably do this if you are pool owners, there’s no need to show you this. We take 3 readings a day and keep the records of that because liability wise in our country here in America, if you don’t have those sorts of records and someone says something about your pool is dirty or there’s no chlorine, if you don’t have a record of it you’re dead. The Health Department also makes you keep records.

Of all the records you keep, probably the two most critical ones … and you’re saying “Oh God, this is ridiculous! Why do you keep so many records? You probably want to know how many times your teachers sneeze,” well, I’d like to, but we don’t keep that… but the two key indicators in your business that John and I really harp on or push, is your weekly lesson comparison and your wages to income percent. These are the 2 things that really talk about the health of your business and really can help you a lot. This sheet I have put up here is just a grid going through the 52 weeks of the year and how many lessons are taught in each of the programs last year, and how many we teach this year. You can see whether things are dropping or not, so its no good waiting at the end for the monthly report to come out to say “Oh, gee! My Baby lessons are dropping.” Figure out why. It gives you indicators that there might be things happening that you need to look at so these are critical pieces of information predicting Budgets, and everything else on how you are doing, to the date on lessons. So total up how many lessons you have taught.

I call up John and he throws at me, “How many lessons did you do this week, how many lessons did you do in Baby?” We can sort of compare what’s happening . You’ve got to stay on top of these things if you want to keep your program healthy. Down the bottom here is where we are year to date. Our schools, at the end of July are about 9,000 lessons above where we were last year. That’s a 13.4 increase over last year’s lessons. That’s it on Record Keeping and Budget.

What I want to do now is try and get in to marketing. Most of you have been to marketing seminars. You’ve spent lots of time listening to how to market your business. Now you get to sit there for a couple of minutes and listen to how we think you should do it. This is another critical part of your business in the marketing side. Many of us aren’t geniuses on this but I tell you if you get creative, many of you can do probably a better job than a lot of people who have it done for them professionally. Not that I am saying you shouldn’t get a professional person but you can do this very easy yourself with a bit of ingenuity and not too many expense of funds. In marketing, let’s start first of all look at a marketing budget. When you are setting a marketing budget you need to look at what you are going to be spending on your budget. We know, through surveys, starting out in your early years, you should be spending about 8 – 12% of your annual income when you are starting your business. As your business grows and becomes more mature, the maximum you probably should be spending is around 2 – 3%.

John says he only spends .5%. What you have to include in these marketing expenses is a lot of these internal marketing. I am going to challenge him because there’s probably more than that because of all the paintings he does on his walls and all his internal marketing things he may not include in that .5%; but I know he does, he would say so. Be careful when you do your marketing budget because in marketing, there are really 2 ways of marketing. These are the two critical things called Internal and External Marketing. I’m sure all of you know that. If you know that guy there with chocolate all over his face, that’s Richard Cahalan, John’s partner. He did not pick him up from a retard station but he’s always doing weird things. He has a very dry sense of humor and John makes him do these strange things for photos. That’s him eating an Easter egg. One of John’s internal programs is at Easter time. They give all the kids Easter eggs but this time Richard got all the Easter chocolate, he got it all over his face.

What is Internal Marketing? Internal marketing is anything you do inside your facilities with your existing clients. John C’s organization spends very little on external marketing. Instead, they choose to concentrate on looking after the people they already have. He is of the opinion if you spend the same amount of money improving your product and service as we do on advertising, then maybe you wouldn’t have to advertise at all. His philosophy is “I’m not putting all this money into external marketing.” Once you’ve got your base built up and your numbers are in your school, people are there, market to them because he knows 80% of these people are out there. So at Easter time they give out Easter eggs, they have free coffee. Both of us do that now. We give free coffee and lemonade to our clients. They give Moms flowers and chocolates on Mother’s Day and Father’s Day they give Dads a newspaper. They go in and decorate the Foyer and so on and so forth.

What I want to do is show you some of the things you can do on your internal marketing to make your business run a lot better. Market to the people you already have. This is what he does at Christmas time. They are busy remember over there during their summer season but they really do take a break for 3 weeks at Christmas but he still wants them to come in December. What he does is offer a chance to win a bike. Any child that comes in for a swimming lesson puts their name in a bowl for every lesson they come in for in December. They come the week before Christmas, someone draws the name out, and someone wins the bike. He hangs the bike in the foyer so the kids can see it. They say, “Mom, Mom, I have got to come in December so I could win this bike.” They think they’re going to win it. He gives out balloons. They all sit in Santa’s knee and tell him what they want for Christmas. He spends a lot of his time and energy and money on internal marketing.

This is another thing they do every Friday night that doesn’t make any money, and it’s not meant to, but its a marketing tool for the kids in the middle to upper level Squads, Learn To Swim kids. If they can swim a length of the pool they can go into these Friday night races they have. They give every kid a ribbon when they first swim a race and that sets them a time standard. Then every Friday night after that, if they beat their time they get another ribbon. If they come first, second, or third in any of their heats, they get a ribbon. So these kids start accumulating ribbons and after they’ve got a whole bunch of ribbons, they get a bronze medal when they get 50 ribbons. When they get 100 ribbons, they get the silver one, and for 200 they get the gold. We do the same sort of thing with our program too, but we have trophies that the kids get. It is something we stole from somebody else so don’t think we are all geniuses. We call this internal marketing. This is not meant to make money. They only pay $5.00 per family to come and do this or $1.00 per kid.

Another special things he does is an Olympic week. We had Olympics last year. He puts things up in his window; a couple of swimmers from their organization swimming like Scott Miller. They put them up when they are swimming. The idea is to get people looking at that and during the week when they swim, they give them out gold medals. These gold medals are chocolate things are pretty big with a ribbon around it. They give these medals out to every person, every day during the Olympic week. That’s a way of marketing by building your program by saying, “Our swimmers are out there.” But you don’t have a swimmer even in the Olympics, but it could be someone from your own state or city, who is in the Olympics.

We also do school holiday specials. This is marketing internally to your clients. During the winter time when it is dead you maybe want to get them into a second lesson. We don’t say we don’t exclude a second lesson, we give them a second lesson for half price. It might fill up your lessons a bit more in the winter time.

External marketing is the next thing I want to talk about. External marketing is just that — anything that is done outside the facility in your own client base. Here are some examples. You could do the bumper sticker thing or the spare tire wheel cover thing — for vehicles that carry their spare on the back. He has a whole bunch of these driving around. I think four people in his organization driving around with that thing on the back of their car. That’s kind of really a neat picture of Sam. That’s his son who is now 9. We’ve got that all over our schools, and it is in America too, on our walls. It is really a catching photo. It looks right into his eye, looking right at you. So that catches a lot of attention externally, to people. This is my wife Di in a tub. We got somebody who’s selling Jacuzzi’s at an Expo and made an arrangement with them. We put your Jacuzzi in our booth and we set a booth up and bring babies in and above there, we have a mirror on the wall so you get a whole bunch of people standing around you can’t see anything on the tub while standing, looking up at the mirror, you can see the babies so you get about 100 people around your booth looking at these babies do great things in this tub. So, we go to Expos and Malls and do that sort of thing. John does the same thing in Malls and Shopping Centers and there’s a great visual display promoting the school externally to the public.

You have to be very visual rather than wordy. Just get good photos of your program and show people what you actually do and of course we put a lot of writing backwards so people really have to look at it. When people look in your rear vision mirror, if you want to do a sign on the front of your car like in the windscreen or on the top of it, put it in reverse because when you look at the windshield of the car behind you, you’d be able to read it. You see, you can make something out of a stupid error.

I think what we found that as your business grows, the majority of your marketing should be internal. We know, and John knows, over 80% of his clients come from referrals. Ours is a little lower than that because we seem to have a high turnover. Maybe it is because our program is worse than his but I don’t think so. I think our society is a little different culture in America. People are in to more activities than they are in Australia. I know there is a difference between the two cultures on what is available to the child for activities, other than swimming. For the same reason, you need a plan for your program and finances, so you definitely need a market plan. You should set your marketing budgets and you can do that simply by looking at what you spent last year. You sit down first of all and you look at what per cent of your money you are going to spend and you work out a monthly budget. You work out monthly what you think you are going to do, so you develop a marketing plan monthly. In December we sit down with our managers and say what you want to do in January, what did we do last year, what do you think we can do different, and we work out a marketing plan for each month what we are going to do externally and internally at each of the centers. Then we put a price on all those things and if it comes up above the budget amount, we want to do then we have to trim things. Then we set an annual budget on our marketing plan. Then you go by and you cost out each month and make sure you’ve got the money in there in your overall budget. So what we should do, is make sure you get a good marketing plan. Don’t be scared to adjust it throughout the year.

One of the best strategies you can use in any marketing plan is to target your market. We know that people will travel 20 – 30 minutes to our schools. So at his schools and mine in America, we can get people who will drive within 20 – 30 164 minutes. In Sydney, John tells me, that 53% of his customers come within a 3 1/2 mile radius and that’s about the same for us too. So definitely, most of our customers come from fairly close, but up to 33% will travel 1/2 hour to get to your school. Those statistics are interesting if you’re going to do a marketing plan where you want to target where you’re going. It is no good going out of that circle and sometimes I feel sad for the people who have their schools near the ocean, because 1/2 of your circle is fishes and they already know how to swim. Look at your program’s potential and if you are low in any certain area or age group, then you can spend more time and money marketing that age group; and of course you could put your articles in children’s magazines, and things like that, fine publications which market to children, if that is where the bulk of your income comes from. It certainly is mine and John’s.

Work on ways to get in to schools. It’s very hard in this country to get into public schools because they say, “Private enterprise coming in, oh no! You can’t do that, you are going to make money off of our students.” You can get in there if you develop a water safety program and you say, “I’ve got this great water safety program. Can I present it to your children?” Of course one of the things you think of in water safety is to teach children to swim. Children can be taught to be safer in the water if they have swimming lessons and not drown. So water safety is a critical thing. Where you do Gus and Goalie programs all over here in America, we sort of adopted the Gus and Goalie thing going with our own little mascot that we designed. That’s a big character of a bear, a koala, because that’s our logo. We go in the schools and do this thing on safety and we have a presentation similarly to Gus and Goalie with puppets and Buffie throws ropes out to the kids and someone shows them how not to jump in the pool and throws something out to them. There are lots of ways of getting into the schools without saying, “I just want to go and hang up my flier, do you mind me doing it?’ They will say, “No”’ usually in the Public Schools.

Where do our customers come from? As mentioned, 81% of John’s customers come from word of mouth. What is word of mouth advertising? Conversation is what generates word of mouth campaign. If you do it, the high quality of your business must become the talking point. The best way to achieve this is through extra good service. That means creating an all-round impression that it is a pleasure doing business with you. The staff needs to be keen and polite, the premises need to be attractive, the goods must be of high quality, the price must be right and there must be no hassles for the customers because if one of these components is missing the experience is being slightly marred. Therefore it won’t stand out which is exactly what word of mouth advertising is all about. One person will tell 10 other people about how great your program is, but if they have a crappy time at the school, one person will tell 20 people how crappy you are. So try to work on keeping the high quality standard in your program. You need to remember your competition is just not other swim schools, particularly in America. We could have thousands more swim schools and we would all be better. In my area alone, I think we could have 20 more swim schools and I’d be even happier because more people would go to quality institutions for their children to swim, not to recreation programs.

Our competition isn’t other swim schools, it’s gymnastics, dance, piano, all these sort of things, competing for our dollars that we want from the children. It’s not so much swim schools providing our competition, it’s other activities. Out of all those activities, usually the child will choose what it wants to do so somehow, you’ve got to make your swim school fun for them to come to. It needs to be more fun than going to piano, or more fun than gymnastics, or Tai Kwon do, or these other activities that kids would do.

Now I am going to show you how you can track and evaluate your marketing. As I mentioned, we do that weekly report where we have a weekly log where everything comes in. This just gets converted monthly and I showed you that briefly before so now we know where our money is coming, what’s working, what isn’t working. That covers tracking and evaluation.

Now let’s look at how you can go about creating an image for your swim school or your business. It’s important that people identify with your program. This could be done by creating a corporate image such as what MacDonald’s and everybody else have done in their businesses. I’ll just throw up a few logos here that you might recognize. This one is the AT&T, you wouldn’t have to be told that. This one is General Electric, I know all of you know this is the Australian Swim School logo. I am serious; a lot of people in Orange County do know that because we wear it everywhere. All our staff wear it, my wife and I wear it everywhere all the time in the schools and it does become a theme that people get used to seeing around the place. So your logo is important and it certainly influences a lot about your image and your logo is one of the critical things.

Uniforms. This is one of our uniforms, but the logo stamp’s the same in all our colored shirts. Blue and white is usually our color. Everywhere you go you’ll see our employees dressed in those. The image and what people perceive is important. Try to keep the uniform standardized, don’t change them too much because it’s like trying to change the color of the badge on the Ford car. They tried to do that once and they went back to the old blue Ford because they thought they were losing their recognition.

Use business cards and put your logo on the business cards, keep it all the same. Letter head and envelopes: you send letters out, and everything — you have that logo up there. The image is what people are going to relate to a lot.

You can also improve your image by doing community service like giving scholarship funds for under privileged children. You can work with disabled children, and so on and so forth.

An important part of your image, though, other than your business cards and dress of your uniform, one of the most critical things probably is developing a brochure of what the school is about. We’ve gone to some expense and time developing our brochure, John and I, but we’re lucky enough to have my Program Director, who is a graphic artist and designer, so we got him to design it. He has told us when you are doing a brochure, you should look at these sort of things: again, the brochure should carry your image, your color, and your design. That’s our brochure, it’s like a folding out thing, so it’s a little different from everybody else’s. It’s not a 4-fold thing, it’s actually a booklet. It has our logo and it has the image of what we are trying to portray. John Coutts’ is the same thing, his is a water theme so his logo is actually water so his whole thing is a lot of visual water pictures, history of Forbes, and the organization, and so on. You can put a lot of information in your brochure but don’t make it too wordy. Keep words to a minimum. Try and use visual pictures to describe what your program is about. Don’t forget also on your brochure, to put a place where you can put an address, a label, and a stamp, and it can be mailed legally. Some people can make the brochure too big and might cost 50¢ to mail. Make sure you keep that within limits of what your country or your postage people will allow you to do.

Finally, let’s look at what goes in to a good advertisement. We do fairly big ones in our local magazines. This is a Parenting magazine and we stuck a big 1/2 page one in there of our school. It’s a big drawing like a child floating with his arms up and it says something like, “Look, Mom, no floaties!” That’s the big heading that goes across the thing. If you want to get people to go look at your ad, then draw them to it; so size is important. Use color. You can use color which is getting more affordable. This is in a recreation magazine. We do a color ad in the back of the front page of one of the recreation magazines. It’s expensive, but it’s not as expensive as it used to be.

Make your advertisement visually drawing. This is called a Target Ad where people will be drawn into the picture. We’ve used this a lot in a magazine where there are lots of text and other ads there but people draw themselves to this target. It’s just a clever way of getting people to look at your ad. Another way is location of your ad, particularly in newspapers. This is where John Coutts spends his .5% of his external marketing. That’s Forbes dressed up as a baby. This is the back page of their local rag or local magazine in Manley. On the back page of it, he has this little section up in the corner. It cost him nearly nothing. What’s it cost? $500.00 a month for that 1/2 page ad. I spent in that recreation magazine $1,1500.00 a month. You can see a big differences in cost. That’s getting placed on the right path of the paper or magazine.

Use of words can also influence what people read. We pulled this out of the Sydney newspaper. It’s used for the street kids in Sydney. They are trying to get a fund together and get people to get money in for the relief fund so by using words that can shock people in to looking at your ad. Here is a cute one we pulled out where there is a Rabbi who does circumcision. The headline says, “I work with tips.” You can play on words. Here are some of the ads that John does in his school: this one says, “‘Would you ask the dentist to fix your station wagon? No! You would call the experts. We don’t fix station wagons either, but we’re experts on teaching children to swim.” Here’s one that’s got nothing to do with swimming. It’s got a bathing suit. They’d look at the girl then they’d start reading the ad. Here’s one with Forbes, another character of him, that says, “Don’t be a dummy, come swimming with Mummy.” They’re promoting a baby swim program. There’s lots of ways you can get advertising out there.

That finishes my large zip through on Program Advertising. I think John’s going to come up now and do a summary of what we covered today and just give you some concluding thoughts for you to go away with.

JOHN COUTTS: I’ll just give John a couple of minutes to put a few slides we want to run through just to finish up. We had a lot to cover today, we tried to tell you what we have been doing for the last 30 years in 3 hours. As John pointed out everyone of those topics we could spend a day on each seminar.

As I said earlier in the piece, we were just ordinary people that started just like you. The point is you do need to start somewhere. If I have a look at the key components or the main reasons on why we’ve been successful, I think I can probably sum it up by saying we keep the water warm particularly in elementary teaching. Two thirds of our teaching is with children under 7. If you haven’t got warm water, you cannot run a good swim school. You need to be indoors. I think even in Florida. I remember going down to Mission Bay. I thought in the warmer climate like in Brisbane, in California, in Florida, you don’t need indoor heated pools. Now, I think you do. I watched the children. I watched the babies swim at one stage, they were a little cold during the winter months. You need graded classes. If you can, they should be homogeneously grouped because it is much easier to teach them. You need a year round program. You need, with our business of course, once a week lessons which I think is the key for us. We tried selling the concept of letting the children go and do other things. We want swimming lessons to be just as Mom will go and buy the groceries once a week, we want her to continue to bring the children 166 for many years and that actually does happen. Obviously, the kids that are more competitive, they need to come and swim a lot more so those children are channeled into other activities as well. The other thing is monthly fees. Rather than having a term payment, having a monthly payment I think that has made a big difference for us. John, can you flip that next slide over? You need to work out what it is you want out of life because the business is the thing that should give you more life, not take your life away from you. You need to spend time working on your business, not just in it. You need to systematize it.

What I want you to do is close your eyes. If anyone opens their eyes, they are in the shit because I’m going to get you up here. If I catch anyone with their eyes open, I’m going to bring you up here and I’m going to make you do this. OK? We’ve a little surprise for you at the finish. You know we’ve got a good sense of humor and we like having a good time so you are going to keep your eyes closed for about a minute and while your eyes are shut — you can close them now — while they’re shut, I want you to think about the things you want to do with your life. What are the things that are important to you? I want you to fantasize a little bit about the things that you are not doing. OK? I’m going to go quiet here for a while. Like I said, no eyes open up until I say so. If I catch you and I’m watching, look out! Don’t open just yet but before you do open them, I want you to try and picture this. You have seen Bainbridge and I how well dressed we are. I want you to imagine us as a couple of Hells Angels. We are a couple of bikers. It could be a pretty ugly sight. Bainbridge, he has this black leather jacket on, he has his mother’s scarf on his head, leather gloves with the fingers cut out of them and I have a black leather jacket on, my mom’s handkerchief, my bandanna, and when you open your eyes, which is not just yet, you will see the original Australian Hells Angels. OK! You can open them up now. Just as you were dreaming about the things that were missing in your life, we too had a dream. We were with our children on Lake Powell in 1993. I remember the date very well because we were in an isolated place and I heard that Sydney had won the right to host the Olympics. We were sitting around the camp fire telling stories to our children, particularly to John’s 2 youngest and my 2 youngest. We were talking about the Indians coming along the cliff and we were reminiscing about the Indians and we were the cowboys and what it would have been like. Then John said to me — John used to ride motor bikes and I used to ride motor bikes, that’s 20 years ago — he said, “Let’s ride across America.” I said “When?” He said, “In a couple of years’ time, your birthday, when you turn 40. Let’s ride across America.” I said, “OK!” So we went on the Hells Angels tour. As I said, you may not believe it, but we are the 2 original Hells Angels from Australia. Of course he’s “Hell”. I told you he had longer hair in those days and I was the “Angel.”

It all started in August, five and a half thousand miles over 21 days. Your country is so beautiful when you get out and you ride some of the back roads, it is just incredible! You’re riding a bike for 6 hours a day, you’ve got the wind going through your hair like going up a mountain road and you’re into yourself so you think about business, you think about personal life and all of a sudden you start thinking about nothing. Just like you’re zoned out, for 5 or 6 hours going through some of the most beautiful territory I have ever seen in my life. Remember, the business is the thing that should give you more life, not take your life away from you.

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