Case Study: Start-Up Business Planning
Father and son team up to build a business that provides an enjoyable work environment and a means of retirement for the father
Client Profile: The Lynches
- Father/Mother and Son/Daughter-in-Law
- Age: early 60s and mid-30s
- Empty Nesters (4 adult children) & Young Married Family
- Business Owners
Five years ago, a business owner saw his father not enjoying the work he was doing. Tired and worn out, his father seemed to be merely existing rather than living his life to the fullest. The business owner knew that his father had all of the capabilities of being a great service person. After all, when his dad had run a service station he was known as “Mr. Goodwrench”. His customers loved him almost as much as he loved helping them.
They took a look at a number of ideas and settled on a service-oriented business. It worked well with his father’s skill set and desires: it was people-oriented, it didn’t require many employees, and it gave him an opportunity to be his own boss while working outdoors.
Starting the company required a number of questions to be answered. Is it best to purchase an existing business or build one from scratch? What is the best way to market to new prospective customers? What is the best way to brand one’s self and the business? How should pricing be structured?
Once the business was started, the challenging part for the business owner was to get his father to see the value in the service he was providing. After a few “No’s” at one pricing plan, his father was ready to walk. But the son persisted with careful guidance and bit of tough love, and his dad was able to move beyond his fears and doubts. He is now enjoying what he is doing, selling his service at a higher price than he ever thought possible, and preparing for retirement in a few years.
The business owner was none other than our founder, Mike. He calls it his “Master’s Thesis.” He worked with his father to take a small business from nothing and grow it into a rewarding business that is sellable — a dream at the core of every entrepreneur’s heart.
After careful consideration and close collaboration with his father, Mike chose to purchase an existing pool service route. His father spent the first couple months building his knowledge of the pool business while Mike started with the marketing plan. The first step was to create a logo with a “home grown” look that would begin the creation of the brand they wanted to develop. One that doesn’t say “corporate” and but says “the guy next door.” They wanted the business to look as if it had been around for some time and was trustworthy, which it was.
The first year they went to a state pool service conference to gain a better understanding of what other pool service owners were doing so they could incorporate “best practices” into their business.
As service was the key to the business, they came up with door hangers that are dropped off every time a pool is cleaned. It is a reminder to the client that the pool was serviced, who cleaned their pool, and a way of communicating any updates to the pool owner (any equipment needing repair, additions of chemicals, etc.)
Today the business charges a rate that is relative to the service being given, and with each price increase, less than 5% of the customer base discontinues service. Some attrition is healthy, and some consultants say that more attrition is actually healthier. The truth is that it depends on a number of factors such as cost of client acquisition, profit per client, bandwidth of personnel, etc.
While this isn’t our biggest success in terms of money, it is our biggest personal success. Not only does it showcase how a business that has few barriers to entry and a whole host of people in it, can become not only successful, but thrive (even in down markets). It also demonstrates the personal edge that makes Lynch Financial Advisors unique and highly valued by its clients.
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