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Here's some good news: The hot tub industry has finally regained some of its swagger.
Rocky Mountain Hot Tub Company (Breckenridge, Colo.) is an anomaly in the hot tub industry. While some dealers boast about their expansive showrooms and countless display models, RMHTC owner Jake Olweiler finds he doesn’t need a 5,000 square foot store, or even 1,500.
Six hundred square feet is plenty.
That may sound crazy, but RMHTC has seemingly found the answer to a riddle many pros in the pool and spa industry encounter: How do we make more money while still staying small?
For Olweiler, the answer was focus. By maintaining a tight focus on the business, from how much space you need to what areas you service, you can create an incredibly lean business that can quickly adapt to whatever comes its way. To learn more, read on.
Like Aspen and Vail, Breckenridge is a resort town where winter is king. While the official population is just shy of 5,000 people, the peak season can bring in almost 40,000 people each day. Property in the region is treasured; Breckenridge is a hotbed of vacation homes, cabins and rental complexes, all of which tend to have one thing in common: a hot tub.
RELATED: How to Tap into the Resort Market
“The short-term property management rental companies, they almost at this point won’t take your home and put it on their short-term rental market unless you have a hot tub on your deck,” he says.
Olweiler’s career dates back to 1997. After graduating college, he moved to Breckenridge to work in real estate, or so he planned. In need of a steadier source of income, he started a property caretaking business, maintaining vacation properties for management companies and second homeowners. At the same time, he partnered with a hot tub pro to do spa service on the side, a job that would then blossom into what is now Rocky Mountain Hot Tub Company.
In just a few years, Olweiler would be in charge of 125 hot tub accounts across three property management companies. And that’s when he noticed something:
“There were homes that had aging hot tubs that were over 10 years old, and at some point, these hot tubs would need to be replaced,” he says. “Right about then is when property owners were beginning to replace older hot tubs, and new property owners started needing to buy a hot tub for their rental home.”
While hot tub maintenance and service was initially his sole focus, the time had come to pivot the business to also include retail. But he wouldn’t jump in with both feet yet. Without a showroom, his best option was selling hot tubs through another hot tub company, with both parties getting a cut of the sale.
“I knew it wasn’t the perfect situation,” Olweiler says. “So over a few years, I was trying to figure out what would be my best decision in terms of what to sell and how to sell.”
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After years of research and consideration, Olweiler set his sights on becoming a Bullfrog Spas dealer. There was just one problem:
“When I first reached out to Bullfrog Spas, their rule was you had to have six hot tubs in a showroom to become a dealer. And I was not able to do that,” he says.
They struck a deal. If Olweiler could have three stocked tubs to sell at all times, he could become a dealer.
“Our initial showroom was just having the smallest tub of the Bullfrog line in our office, standing up on a wall for space reasons and storing other stock models in the service shop,” he says with a laugh.
For several years, RMHTC sold 30-45 hot tubs each year. In 2015, faced with a service company that was outgrowing its current space — the service office was only 300 square feet, the service shop was 900 square feet and it was getting tough to find parking for the company’s 10 service vehicles — Olweiler decided to secure another commercial unit for a showroom.
“I felt if we had a showroom, we would certainly be able to sell more hot tubs and look more professional for sure,” he says.
RELATED: Top Design Trends for Hot Tub Showrooms
At 600 square feet, the showroom may be small, but that works to Olweiler’s benefit in several ways. Space is costly in Breckenridge, and cutting down on overhead is essential for a lean business. A small showroom also doesn’t require much in the way of personnel — just one salesperson is all RMHTC needs.
A small space also works because the purchasing mentality is much different in a resort town than it is elsewhere.
“For us, it’s not an emotional or feel-good purchase. For a lot of these second homeowners, it’s a business decision to either upgrade their old hot tub for their rental home, get a new hot tub for their new rental home, or just get a hot tub for their vacation home because their grandchildren want a hot tub,” Olweiler says.
Service and retail are perfect complements to each other — with both, you’re able to increase both sales and service contracts. But there can be too much of a good thing.
“I always tell people that a fast-growth business is sometimes a hard spot to be in,” Olweiler says.
More accounts means more service techs, trucks, support staff. Today, RMHTC is open seven days a week, 365 days a year. The company has more than 800 accounts and services close to 150 tubs a day; Olweiler has 8-10 techs out on routes every day. How does he do it? Operating in a 10-mile radius, and that’s it.
“When the hot tub breaks down, it’s a major problem for the guest. There needs to be immediate action,” he says. “And back in the day when I was the guy putting my boots back on at 5:30 in the evening to go back out to solve a problem, I didn’t want to drive 20 miles away. So I decided that I’m only going to service the Breckenridge area.”
RELATED: Tips to Optimize Your Service Route
A tight service area also means customer service doesn’t suffer in any way as the company grows.
“People are surprised when they call us at 4:30 and have an issue…and my guy’s knocking on the door three minutes later because he’s there in the same neighborhood,” he says.
RMHTC’s expansion into retail may have sometimes been a bumpy road, but if your business is solely retail or solely service, Olweiler urges you to reconsider.
“Sometimes I heard that there are retail guys who don’t want to do the service part of it,” he says. “I think, ‘Don’t you just want to be the client’s hot tub person altogether, so if they need anything regarding hot tubs, that they call you first?’” Whether it’s to buy a new hot tub or to have one serviced or repaired, they only need to call you.”
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