Seasonality and weather risk

Pool service revenue is seasonal even in year-round markets. Understanding the pattern protects you from buying at a peak you can't sustain.

Three climate types.

- Year-round (FL, AZ, southern CA, southern TX, HI): revenue varies 10–20% across seasons. Less risk, higher multiples justified.
- Extended season (NC, SC, GA, central CA, much of TX): revenue varies 25–40%; many accounts go to bi-weekly or monthly winterization service.
- Short season (most of the Northeast, Midwest, Pacific NW): revenue swings 60–80%; route is closed or at maintenance-only mode 4–5 months a year.

What to actually analyze.

1. Monthly revenue, last 36 months. Pull from bank deposits, not the books. Calculate month-over-month and year-over-year. Look for unexplained dips (lost accounts? weather? closure?).
2. Trailing 12 months at 3 different points (now, 12 months ago, 24 months ago). If the trailing 12 is shrinking, you're buying decline.
3. Weather exposure. Pull NOAA data for the metro: hurricane frequency, freeze events, drought restrictions. A Florida route lost 4 weeks of revenue in 2022 to one hurricane; a Texas route lost 3 weeks to the 2021 freeze. Build that into your model.
4. Drought / water restrictions. A region-wide restriction can cap chemical demand or even close pools. CA, AZ, TX have all had restrictions impact routes in the last 5 years.

How to value seasonality. Always underwrite on trailing 12-month average, not peak month × 12. A peak-month projection inflates value 15–30% on a seasonal route. If the seller is anchoring on "we did $X in July," counter with the trailing 12 average.