Family run businesses require a lot of work, but Aquarama Pools is a story that swims against the tide. Though the water hasn’t always been calm, a second and upcoming third generation of Shearer family progeny have managed to weather the effects of stormy seas.
The pater or materfamilias started with nothing and managed to build a highly successful business. Now perhaps it’s time to pass this thriving entity on to a new generation. It’s a great idea, but will it be successful? In the majority of cases the answer is probably, “No.”
The reasons are many and varied. Second generations may not have the passion or desire to be involved in the company, let alone run it. Maybe Junior likes race cars instead of pipe fittings, or the kids got a taste of caviar and champagne growing into adulthood and don’t really want to get their hands very dirty.
Some heirs may think they can do things bigger and better than the founder, losing sight of what made the company prosperous in the first place. And sibling rivalry can rear its ugly head in myriad ways, from titles to duties to compensation.
In a 2012 article, the Harvard Business Review said data supports the “familiar aphorism, ‘Shirtsleeves to shirtsleeves’ in three generations.” It reported that “Some 70% of family-owned businesses fail or are sold before the second generation gets a chance to take over. Just 10% remain active, privately held companies for the third generation to lead.”
Back in the early 1960s, Robert Shearer was actually in the meatpacking and freezing industry when outside influences prompted him to sell his business to a larger company. That left him with not only time on his hands, but also a desire to find a new venture, one that would enable him to build and grow his business without third party interference. “Dad was a wholesale type of guy,” says Karen Shearer Frye, Robert’s daughter, “so he contacted Buster Crabb Pools and told them about his idea of building a pool in his own backyard, with the additional thought of selling pools in the Marietta, Georgia area.”
Given a green light, Robert bought the pool kit, at a wholesale price, and, along with his own father, built his family a backyard pool. When a friend saw what Robert had done, he asked him if he could do the same thing for him.
A pool business was born.
Five decades later, Aquarama Pools, Spas & Service, Inc. is still family-run. The company rakes in more than $5 million in annual gross sales and has 35 year-round employees. Headquartered on a 5-acre site with a retail store, three warehouses, and a pool park, it has been a family business since Day One, says Frye.
“I grew up sitting around the family dinner table listening to my father talking about his day. He loved the selling part of the job and meeting with the customers,” she says. “I worked the “Fair” booth with him early on, and got to watch him relate easily to people. Dad made it seem like fun.”
Some of the fun took place in the family’s own backyard. “When I was in high school, our pool was a popular place to hang out. Each year, we hosted the swimsuit photo session of the Cobb County Beauty Pageant. I have a lot of pictures of my Dad in the middle of the line-up with a big smile on his face.”
As the business grew, Karen began helping on the numbers side, learning the basics of payroll and bill paying from the firm’s accountant. By the time she was 18, she was running every aspect of the retail store. She ended up taking classes at a local vocational school before enrolling at Georgia State University, where she earned her degree in accounting and business management. It was then that she decided to make a commitment to the family business.
When Bob Shearer retired in the late 1980s, he left a company whose full-time staff included nine family members. “My younger brother had been building pools with the other workers since he was 10,” says Frye, who adds that a cousin, a sister-in-law, and her mother also worked in the store.
Not every family member worked out, though. “My sister’s husband wanted to switch careers and started working for us selling pools. It was a mistake because he just didn’t fit in,” Frye explains. He left after a few years, but not before introducing Karen to her husband, Bennett, who subsequently started working on the building crew.
The company consistently grew. Yet it became clear that there were rules and policies that needed to be put into place, and management also needed to determine how everyone was paid and treated in the hierarchy of the company.
A turning point in the history of company came when Frye’s brother decided to change careers. “He was running construction and doing most of the pool sales,” she says. “My father was ready to retire but had not put a succession plan in place. It had just always been implied that, ‘Well, this will all be yours someday.’ ”
In the early 1990s, ownership passed to Karen and her husband. “We didn’t exactly walk into a gold mine,” says Frye. “Following the 1987 recession, the company was overloaded with debt of approximately $500,000. Plus, the construction department took all the rolling stock and left the business. And I became ill with breast cancer. Bennett and I also had four young children and a new house.”
With all the debt and the business located on rented property, Karen and Bennett were advised to declare bankruptcy and start fresh. “But at the time, there were many small businesses with whom we dealt and bankruptcy would have deeply affected them as well as us,” Karen says. “So we decided to find an avenue that would allow us to avoid the courts but pay back those who had trusted Aquarama.”
One of the first things the Fryes did was expand the service department to include all pool owners—not just Aquarama customers. The company also developed a maintenance department to clean pools and spas for those people who preferred a professional pool service.
The company’s debt load soon shrunk to a manageable size, and the service company and maintenance departments grew. “We were able to take over the property and purchase a second lot next door,” Bennett says. “We’ve always found it ironic that since then some of the businesses to whom the original debt was owed have either shut their doors or have been bought by larger companies.”
Though Aquarama remains on solid footing, it must nonetheless confront a number of pressing challenges, especially as a new generation of family members is poised to assume control. Tomorrow, we’ll run a follow-up piece on Aquarama that shows how the company is contending with these kinds of issues while still positioning itself for future growth.