HotSpring versus McDonald's

[Gomboman]

Is owning a HotSpring dealership as safe as owning McDonald's franchise restaurant? I'm not saying that HotSpring spas are the best, but it seems like a very safe profitable spa dealership to own. Most of the HS dealerships in my area have been around for awhile and appear to be financially successful.

Is it possible to own a HotSpring dealership in a decent area and not be able to make a reasonable living? This is assuming you are running your store in an ethical manner with a good staff. I haven't heard of too many HS dealerships closing their doors or switching brands like some other dealerships. No offense intended to the dealers out there selling other brands. Just curious.

[xrdirthead]

Is someone thinking of opening a dealership?

Is owning a HotSpring dealership as safe as owning McDonald's franchise restaurant? I'm not saying that HotSpring spas are the best, but it seems like a very safe profitable spa dealership to own. Most of the HS dealerships in my area have been around for awhile and appear to be financially successful.

Is it possible to own a HotSpring dealership in a decent area and not be able to make a reasonable living? This is assuming you are running your store in an ethical manner with a good staff. I haven't heard of too many HS dealerships closing their doors or switching brands like some other dealerships. No offense intended to the dealers out there selling other brands. Just curious.

[Wisoki]

There is nothing "safe" about owning your own business. There are calculated risks, but safe, no. If you have the capability to establish a dealership with a major brand name it will increase your chances, for sure. You want to make a small fortune ni the spa business, start with a large fortune.

[hottub.pool_boy]

         That's a good question Gombo. Here's my thoughts on opening a HS dealership. God, I don't even know where to begin.
         Personally, I'd find it extremely difficult to survive. Especially if it was truly a NEW dealership in an undeveloped area(by undeveloped, I mean developed for spa/ hot tub ownership by other dealers, etc.) You would probably expect to lose money the first few years, if lucky to break even. Have a dynamic marketing plan with enough capital to renovate a space, stock it with $75,000 worth of spas, $15,000 worth of chemicals and accessories "to go."  Let's not forget monthly expenses and salaries easily topping $10,000 a month without even sneezing. Best to figure an easy 5-10- years before really getting rolling, if at all.
         I recently made a move and opened another location. My second. I had a choice of two areas. One, a major city, well for CT, "undeveloped for spas." Or a more rural, larger area with smaller city where another HS dealer just lost his\her dealership. We picked the area where 1,000 to 1,200 HS have been sold over the past 10-15 years along with being a "developed" bioguard area. Choosing the area was, I think, and I hope, a no brainer.
         It is an extreme risk. Stick your neck out and see if it gets cut off. Take some risk. I feel it will make a great story if it doesn't work out. There's much to address on such a topic.
         It is a fun business. The RETAIL part can be trying. Nothing beats deliverying one of these, or doing a orientation with a new spa owner to see the excitement and know the joy you will be bringing to that household. Knowing you're delivering a product that will "RUN" when you power it up, helps an awful lot. You don't and won't hear from the dealers who've switched brands three, four, five, eight times. We do everything we can to make it "EASY" to own. Everyone's happy then.
                       Upon thinking some more, it would probably help to know where we started selling spas.
From our home page.....

"Scarritt & HotSpring Spas--- It all started with our lumber / home center business. In 1946, Grampa Dave opened Scarritt Lumber. Building the lumber/ home center business with his wife and children until his retirement in the late 70’s.  In the early 80's, Jim Scarritt, his brother and sister all wanted spas. They did the research and they found a company which was doing some unique things at the time. The company was Watkins Manufacturing, founded by two brothers in California. They made HotSpring Spas. The unique things for the times were- Full-foam insulation, a massaging, up-and-down jet for your back, a spa with a no-maintenance exterior, and a warranty which really backed the consumer. All of these things were important as they planned to sell the spas at their home centers/ lumber yards. The rest is history. Scarritt's feels lucky to have found an industry leader so long ago. Today, Watkins Manufacturing based in Vista, California produces HotSpring, Tiger River, Solana, and HotSpot spas. Backed by a Fortune500 company, Masco Corp., ensures a bright future. We, at Scarritt's, wouldn't sell anything else. We were sold on the product over 20 years ago!!!!! If you do the research, and you want to buy the best spa you can, you will buy a HotSpring from Scarritt."

[dunerunner25]

Gomboman what you need to check into in the IN-N-OUT Franchise.  I tried to get some food at my local IN N Out  the other night on a weekday and couldnt even get into the parking lot!!!

[Campsalot]

Gombo, move to Bismarck ND and buy out the Sundance dealer, Mr. Sleepy! This guy needs a wake up call! Sundance is on a even playing field with HS and in this market the aggressive spa dealer sells Coleman spas.  The way to compete with the Coleman folks is simple.  Do what they do, offer great customer service and a nice enviroment or showroom.  The other two dealers here (Mr. Sleepy and HS) would do well to learn about customer service and an aggressive marketing plan.

[East_TX_Spa]

The Coleman dealer also has a BIG advantage over the competition with their sales force.  If you were spa shopping in North Dakota, it would take a better man than most to not fall for spahappy's sales pitch:



Termy

[hottbpete]

Gombo-

Being a small business owner, I thought I would chime in.

My advice is in-general due to the fact I do not own a spa shop....just a spa.

10 tips on picking a buisness model:

1) Have Money....quickest way to go out of business is to run out of cash

2) sell items that people re-use, one of the issues with spas is that people who buy them don't buy again for a long time.

3) keep out of the service business as your only business...If service is the only thing you sell two things happen...your company can only grow by the number of hours you have by your rate....or by hiring more and more tech/service people....(always a bad plan...seee next rule)

4)Hire as few as people as possible...biggest expense with the biggest headaches

5) Don't sell fruit......if your shelf life on your product is short...you will need to eat the inventory or discount it to get rid of it.... an ultimate waste of time and money.  Find a product that does not change much.

6) Do not sell unprofitable "stuff"  sounds simple.....but take a look at all the people that sell comput4er monitors.....no margin but it sucks up your cash.

7)Do it on the internet....fastest growing segment of the purchasing supply chain

do everything on the cheap...but with quality.  

9) Everyday...get out of doing the buisness detail business and into the growth strategy issues...if you do not plan for the growth...you will not grow

10) do not get emotional attached to a business.  If your utlimate goal is greenbacks then who cares what you sell.  If your dream id to sell Hottubs....then sell them.....

Well, I finished my lunch....gotta go back to sellin stuff!

[Vinny]

Gombo,

I don't own my own business but I'm thinking in terms combining of what hottbpete & hottub.pool_boy said.

In these economic times, things are tough. Today the stock market lost about 2% due to sub prime mortages. People will be losing their houses due to this, people need to eat, not soak. Hopefully most people who read this bought their tubs with either high quality credit or cash.

What does this have to do to tubs ... well IMO a lot of people don't have a clue about handling money. They overextend themselves and buy on impulse with hopes they will be able to pay for it. I knew a person who got a home equity loan a few years back and it was at 15%. Tubs are luxury items that people who don't make a lot of money (whatever that is) will not be able to afford if these lenders call in their loan or have to refi (if they can) at a higher loan rate. The anyalsts are forecasting that anoher 500,000 houses will be on the market soon due to this problem. They also forecast that lenders will be tightening up their standards ... less people to qualify. I do realize that once people buy a house they can start spending a little more freely but unless a tub store is in an upscale area I don't think it'll survive.

I also thought of starting a hot tub business but this was and still is my concern. I believe you can make a small business successful but as I said maybe the business should be something that people really need in order to survive.

Just my $0.02.

[Wisoki]

I would give her what ever she wants, as a matter of fact, I think she already ownes half of all my stuff. GREAT pic, Term! I'll be back in about 3 minutes.

The Coleman dealer also has a BIG advantage over the competition with their sales force.  If you were spa shopping in North Dakota, it would take a better man than most to not fall for spahappy's sales pitch:



Termy

[Wisoki]

Whew, I'm back... OK, So I agreee with every single thing Vinny has said here, except for the "luxury" aspect of hot tubs. Evewryon can afford one and every one should own one. beyond that, I think Vinny was DEAD NUTS!

Gombo,

I don't own my own business but I'm thinking in terms combining of what hottbpete & hottub.pool_boy said.

In these economic times, things are tough. Today the stock market lost about 2% due to sub prime mortages. People will be losing their houses due to this, people need to eat, not soak. Hopefully most people who read this bought their tubs with either high quality credit or cash.

What does this have to do to tubs ... well IMO a lot of people don't have a clue about handling money. They overextend themselves and buy on impulse with hopes they will be able to pay for it. I knew a person who got a home equity loan a few years back and it was at 15%. Tubs are luxury items that people who don't make a lot of money (whatever that is) will not be able to afford if these lenders call in their loan or have to refi (if they can) at a higher loan rate. The anyalsts are forecasting that anoher 500,000 houses will be on the market soon due to this problem. They also forecast that lenders will be tightening up their standards ... less people to qualify. I do realize that once people buy a house they can start spending a little more freely but unless a tub store is in an upscale area I don't think it'll survive.

I also thought of starting a hot tub business but this was and still is my concern. I believe you can make a small business successful but as I said maybe the business should be something that people really need in order to survive.

Just my $0.02.

[Vinny]

Whew, I'm back... OK, So I agreee with every single thing Vinny has said here, except for the "luxury" aspect of hot tubs. Evewryon can afford one and every one should own one. beyond that, I think Vinny was DEAD NUTS!

If a tub was $2,000 then yes everyone MIGHT be able to aford it. With tubs at $6,000 it eliminates some people; at $8,000 it is out of reach for most people. Considering everything else that needs to be done to prepare for a tub .... I still consider it a luxury item. My project approched $30,000 for everything I did .... Thankfully I wasn't paying 15% interest.

[Spiderman]

If a tub was $2,000 then yes everyone MIGHT be able to aford it. With tubs at $6,000 it eliminates some people; at $8,000 it is out of reach for most people. Considering everything else that needs to be done to prepare for a tub .... I still consider it a luxury item. My project approched $30,000 for everything I did .... Thankfully I wasn't paying 15% interest.

What amazes  me about our area in upper Michigan is how many people will buy jet skis, power boats, snowmobiles, pools etc. because you can only use these "toys" for a few months out of the year.  We really only have two hot months here, July and August.  June usually stays in the 60
s.

We use our hot tub everyday.  And the people who buy the other "toys" are working class people, they don't have a million dollars to throw around.  They use their jet skis maybe two months (longer with wet suits) out of the year, but make payments on them for the other 9 or 10 months while they're sitting in their garage or storage facility.  

I know it's different strokes for different folks, but it still amazes me how these other businesses seem to do pretty well with products that have limited usable time per year.  Hot tubs, IMO are like any of those other products and you make payments to pay for them.

[Vinny]

...

I know it's different strokes for different folks, but it still amazes me how these other businesses seem to do pretty well with products that have limited usable time per year.  Hot tubs, IMO are like any of those other products and you make payments to pay for them.

I think sometimes people get too toyed out. You can make payments and a ton of people do. The problem comes from people overextending themselves on whatever. Car payments are an evil necessity but some working class people have tremendous payments for the amount of money they make.

 The dealer can sell anything to anybody and once that item is delivered it's the loaning institution's problem. 500,000 houses is an awful lot of houses. All those people who default will not be able to buy another home for a few years. People who overextended themselves won't be able to get homes either.

How far does a paycheck go? $60,000 a year is $5000 per month if no taxes are taken out ... Uncle Sam wants his first so you're not clearing $5K a month. Put a mortgage, utilities, car payment, gas, insurance .... it adds up and all those toys are going to be a problem. Add children ... Holy S***, you need 3 jobs!

Personally, I think the working class person has gotten the wrong idea about "living" based on who knows what. Unless you make a hefty salary or have unlimited funds you can't live "the lifestyle of the rich and famous". It will come back and bite them in the butt. Once you work 24 hours a day, there's not too much more you can do!

[anne]

Whew, I'm back... OK, So I agreee with every single thing Vinny has said here, except for the "luxury" aspect of hot tubs. Evewryon can afford one and every one should own one. beyond that, I think Vinny was DEAD NUTS!

I'm totally with Vinny on this one. Hot tubs are most certainly a luxury. Far from everyone can afford one. I feel pretty darned lucky.