Correctly Valuing Your Rates for Cleaning Visits ll - Peter, Shane, Lee

Stop Racing to the Bottom: Why Pool Service Pricing Matters More Than You Think

If you've ever wondered why some pool service businesses seem to vanish as quickly as they appear, the answer might be simpler than you think: they're pricing themselves out of existence. In a candid discussion on the Talking Pools Podcast, industry veterans Peter, Shane, and Lee dive deep into one of the most critical yet misunderstood aspects of running a successful pool service business—correctly valuing your rates.

What starts as a seemingly straightforward conversation about hourly rates quickly transforms into an eye-opening breakdown of the hidden costs that can make or break a pool service company. Their insights reveal why that $25-per-hour rate you thought was reasonable might actually need to be double that amount just to keep your doors open.

The Psychology of Pricing: Why Cheap Isn't Cheerful

Many new pool service operators fall into the same trap: they survey their competition and decide to undercut everyone else to win business. It's a strategy that feels logical but is fundamentally flawed. As the hosts explain, this approach creates a dangerous perception problem.

People who compete on price, it is a fast race to a losing race or a loss, I should say, because it's a race to the bottom. And you're undervaluing yourself. Like, let's face it, if you see a product that is really cheap and yet a product that appears to be like slightly better quality, better presented, more professional is charging a lot more, what does that make you think of that product that's cheap? It makes you think there's something wrong with it, that it's inadequate, that it's incomplete, that it's going to be poor quality or poor standard.

— Shane, Talking Pools Podcast

This psychological aspect of pricing extends beyond simple economics. When customers see dramatically lower prices, they often assume something is missing—whether it's experience, insurance coverage, or quality of service. Rather than attracting quality customers, rock-bottom pricing often draws in bargain hunters who may not value the professional service you're trying to provide.

The hosts emphasize that this isn't about gouging customers or inflating prices arbitrarily. It's about understanding that professional pool service involves expertise, reliability, and accountability that has genuine value in the marketplace.

The Real Cost Breakdown: From $25 to $53 Per Hour

The podcast's most shocking revelation comes through Shane's real-time calculation of what it actually costs to earn $50,000 per year in the pool service business. Most people make a critical error in their math, and the numbers are sobering.

The typical incorrect calculation looks like this: $50,000 divided by 52 weeks equals $960 per week. Divide that by 38 working hours, and you get $25.30 per hour. Simple, right? Wrong.

Most people would go, okay, divide $50,000 by 52 weeks of the year, it's $960 a week. Divide that by 38 hours, that's $25.30 an hour. That's what you think. That's not what you need. Like, that's not what you need to earn, you need to charge. It's nowhere near it. It's actually quite scary.

— Shane, Talking Pools Podcast

When Shane factors in the real costs of doing business, that $50,000 target quickly balloons to $57,000 once you add:

• Workers' compensation insurance: $1,000 (2% of income)
• Holiday leave: 17% of overall income
• Superannuation: 11% ($5,500)

But that's just the beginning. Vehicle costs add another massive expense:

• Vehicle lease: $12,000 annually
• Registration and insurance: $3,200
• Fuel: $5,000 (less than $100 per week)
• Servicing and maintenance: Additional thousands

The vehicle alone costs approximately $25,000 per year, or $500 per week. And this doesn't even touch on administrative costs, bookkeeping, storage, equipment replacement, or the corrosive effects of pool chemicals on your gear.

The Seasonal Reality: Working Fewer Weeks Than You Think

Perhaps the most overlooked factor in pool service pricing is the seasonal nature of the business. Shane's calculation reveals a harsh truth: you're not actually working 52 weeks a year.

Start with 52 weeks, then subtract:

• 4 weeks annual leave
• 2 weeks personal leave
• 2 weeks public holidays
• 8 weeks of reduced seasonal work (varies by location)

Suddenly, you're down to just 36 weeks of full earning potential. When you factor in that only about 6 hours per day are actually billable (after travel time, vehicle prep, and breaks), the math becomes stark.

So from 52 weeks of the year, we actually come back to 36 weeks of the year that we can actually earn an income, that we're actually on the road earning a wage or having the ability to earn an income. Let's say. Now when you divide that by hours in the day, and let's say six hours a day is what you can actually charge for... it works out to $52.90 an hour.

— Shane, Talking Pools Podcast

That's more than double the original $25.30 calculation—and this is just for wages, before vehicle and business costs are even factored in.

Weather, Infrastructure, and Other Uncontrollable Costs

The podcast hosts also discuss factors completely outside a business owner's control that still impact profitability. Weather events, power outages, and infrastructure failures can shut down operations for days at a time, yet fixed costs continue.

Peter shares an example of a lightning storm that knocked out power across several suburbs for days. In his tightly routed service area, this meant multiple days of lost income while vehicle payments, insurance, and other fixed costs continued.

These scenarios highlight why the "make hay while the sun shines" approach is crucial. When conditions are good and work is abundant, rates must be high enough to cover the inevitable slow periods, weather delays, and seasonal downturns.

Industry Impact: How Underpricing Hurts Everyone

The conversation takes on a more serious tone when discussing how incorrect pricing affects the entire pool service industry. The hosts express frustration with newcomers who dramatically undercut established businesses without understanding their true costs.

This topic came up to me as something that was really important because I constantly see posts on the talking pools page or the master builders service page where people are talking about price, and I know that there's people that are really staunch on charging what they're worth... and then these buggers that have really no idea come in and undercut them.

— Shane, Talking Pools Podcast

This creates a vicious cycle where professional operators struggle to maintain profitable rates while competitors who haven't done their homework offer unsustainably low prices. Eventually, these undercutting businesses fail, but not before damaging client expectations and industry standards.

The hosts refer to these operators as "fly by nighters" or "cowboys"—businesses that enter the market with unrealistic expectations, create chaos with their pricing, then disappear within a year or two when reality sets in.

The Value-First Approach: Building a Sustainable Business

Rather than competing on price, the podcast advocates for competing on value and quality. Peter shares his philosophy of being upfront about his positioning in the market, often telling price-focused prospects directly that he's not the right fit if they're primarily looking for the cheapest option.

This approach has served him well—the majority of his customers come through referrals and recommendations rather than price shopping. This creates a more stable, profitable business model where customers value the service quality over rock-bottom pricing.

The hosts also discuss the evolution toward charging for quotes, especially for on-site assessments. While offering free quotes was once standard practice, many successful operators now charge consultation fees that can be deducted from the final invoice if the customer proceeds with the work.

This approach serves multiple purposes: it filters out non-serious inquiries, compensates the business owner for their time and expertise, and establishes the professional value of the service from the first interaction.

Conclusion: Knowledge Is Profit

The Talking Pools Podcast episode serves as a wake-up call for pool service professionals who haven't thoroughly calculated their true costs of doing business. The difference between intuitive pricing and reality-based pricing can literally mean the difference between a sustainable business and a failed venture.

The key insight isn't that pool service operators should arbitrarily raise their rates—it's that they should understand what their services actually cost to provide. When Shane's calculation revealed that a $25-per-hour assumption actually needs to be over $50 per hour just to cover basic costs, it wasn't about greed or market manipulation. It was about mathematical reality.

For established operators, this analysis provides ammunition for rate increases and confidence in their pricing structure. For newcomers, it's essential homework that could save them from joining the ranks of failed pool service businesses.

The pool service industry will benefit when more operators price their services based on actual costs rather than guesswork or wishful thinking. Professional, sustainable businesses that properly value their services ultimately provide better outcomes for customers through reliability, expertise, and longevity—qualities that benefit everyone in the long run.

Episode Chapters

• 00:00 Introduction - The Pricing Problem
• 05:30 The Psychology of Competing on Price
• 12:15 Real Cost Breakdown - From $25 to $53 Per Hour
• 18:45 Seasonal Realities and Weather Impact
• 25:20 Industry Impact of Underpricing
• 32:10 Value-First Approach and Quote Fees