Episode 196: Inflation & The Pool Industry - Don't Work Your Way Out of Business with Augusto & Justin of National Pool Partners
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Episode Summary
Today, we speak with National Pool Partners’ CEO Augusto Titarelli and Chief Development Officer Justin Kuperberg, to discuss the impact inflation is having on the pool service industry.
After Justin gives a brief definition of inflation—“a decline in purchasing power over a period of time”—Augusto shares his personal experience navigating an era of hyperinflation around the start of his career when he was working for a small electronics company in Brazil.
It was obviously a very difficult phase for the company—four years of fighting to stay ahead of inflation. Augusto explains: “One of the things that hyperinflation does, in general, is accelerate things so much that cycles become super short. It requires you to be very agile to fight that off.”
Augusto and Justin then break down sectoral inflation, how this phenomenon affected (and continues to affect) the pool industry in a major way, and why the pandemic helped in the creation of a “perfect storm”. They explain how to stay ahead of inflation by preserving your cash flow not only in today’s turbulent economy but for the economic realities still to come.
They then speak on NPP’s pool industry inflation calculator and how companies of all sizes can benefit from it as an educational tool to determine whether they truly have a business that is able to weather the worst of times. Download Here: https://poolchasers.link/npp-inflation-calc
For our guests, thriving amid inflation depends on business owners having the “managerial courage” to future-pace along with always remembering that cash is king. As Augusto says: “We need to dare to lead in pricing.”
Topics Discussed
01:14 - An introduction to Augusto, Justin, and the ins and outs of inflation
04:22 - How sectoral inflation affects the pool industry and how to protect your cashflow
17:39 - Justifying price increases to customers
30:02 - Fighting inflation as a business owner in the pool industry
35:21 - NPP’s pool industry inflation calculator
48:29 - Whether or not inflation is here to stay
56:57 - Responding to complaints of “price gouging”
1:06:02 - How to stay ahead of inflation
Connect with National Pool Partners
Key Quotes From Episode
Inflation, in its purest definition, is a decline in purchasing power over a period of time. [...] In an era where costs of services and goods are rising, the amount of profit or money that you have is buying less of those goods and services. That causes inflation. ~Justin
You can’t compensate for inflation that you’ve already suffered. You can only compensate for the inflation that you’re going to suffer in the future. ~Augusto
The first thing you need to do when you’re in high inflation is to protect your cash flow. If you don’t protect your cash flow, you run the risk of disappearing as a business. ~Augusto
People don’t look at paper profit—they look at cashflow to put a value on your company; so, if you want to build a valuable company, you have to build a healthy cash flow. ~Justin
The bad thing about inflation is that even when the causes for inflation stop, the prices never go back to where they were. ~Augusto
There are two ways to drive pricing. One is the price that the market will take. The other one is cost-up. ~Augusto
