Alan Feuer
“As many of our mentors have taught us, we have to have a budget to mull over. This means we must be aware of our incoming revenue and outgoing expenses, and what drives these metrics. We must know our fixed expenses, and from there we can determine our daily break-even point (DBEP). Once we know the DBEP, then we can really price for fair and reasonable profit — as well as appropriate fluid expenses, such as wages and materials. A good budget knowledge will show us our waste and leakage, as well as our missed opportunities.
“In addition, I cannot say enough about seeking out a business mentor with whom you meet no less than quarterly; monthly is better. You need to be absolutely transparent with this person, and confess your ‘sins’ at each meeting. A great mentor will, of course, be discreet and fair — but should be allowed to also slap you upside the head when you pull a stupid, impatient or selfish business stunt. As the boss, you must avail yourself to be held accountable by your mentor.”
— Alan Feuer, ACE, Technical Director, Preventive Pest Control, Albuquerque, N.M.
Josh Handy
“Buy smart. Take advantage of discounts and sales when possible. Develop a relationship with your distribution channels. Talk to your accountants, and get their advice on large purchases. For example, even though I only paid $8,000 down on my new work vehicle, my accountant said we could write off the entire purchase price of the vehicle on our taxes.
“You should also surround yourself with a good support team, even if they do not work for you. One of my primary goals was to not only treat the pest problem, but to correct the damage associated with the pest. For termites, that means making the necessary wood and sheetrock repairs. For moisture problems that led to general pest problems, that means repairing the damaged wood and surfaces. For wildlife, that means sealing entry points. I want my firm to be a full-service company — not just the ‘bug man’ who shows up, treats and leaves — so I am investing in professionals and training that can help me reach this goal.”
— Josh Handy, Owner, Foremost Pest & Wildlife, Monroe, N.C.
Buddy Herring
“Keep good records. Be sure to save warranty information, keep a good inventory, have solid equipment agreements with your employees so they become good stewards of your assets, and have plenty of notes, mental or otherwise, on spending mistakes so you can try to not make them twice.
“We also try to stick to the old philosophy of expecting the best, but preparing for the worst. That’s not to say we exist in a state of fear, but we certainly try to keep expenses at a tolerable level. This includes keeping a tight inventory of chemicals, materials and supplies. Buying in bulk to take advantage of discounts is great, but if those products are not moving because they are not needed, then that is potential rent, truck payments, equipment upgrades, or principal loan payments that could be made to keep the ship sailing during slower times.
“Just like a small family should not live beyond their means by spending money before they make it, a smaller business should not worry about having a flashy space that eats away at a chunk of their profits each month. This goes for trucks, too. We have purchased quality, used trucks that other companies have retired, are in excellent condition, and are already equipped for pest control. We have purchased used equipment from other firms as well. Be frugal, but then again, don’t hold up a dollar to save a dime.”
— Buddy Herring, Owner, Summit Pest Solutions, Mills River, N.C.
Scott Robbins, ACE
“Whether it’s new products, equipment or anything else, I generally am never an early adopter. I prefer to watch what a few others have to say about it first. But when I do make a company purchase, it’s not about price, it’s about efficacy. It’s about cost-effectiveness and return on investment. The backpack model we purchased for 2021 is probably one of the most expensive units on the market. But on the other hand, it’s not something my homeowner customer can go to a big box store and buy. Based on research, it also will last longer and perform better than its less-expensive competition.”
— Scott Robbins, ACE, Technical Services Manager, Action Pest Control, Evansville, Ind.
Kjorlien and one of her four-legged employees. PHOTO: DEANNA KJORLIEN
“Invest in hiring the right people, those who will fit your company culture right from the start. Then spend the money on proper training. Employee acquisition and turnover are far costlier than offering loyalty-building perks like a 401(k) plan or health insurance. Training is more cost-effective than fixing mistakes, and your reputation is priceless.
“Also, outsourcing can be a good thing. Our K9 bed bug inspection line of work really demands zero mistakes, and that’s always our goal. Our PMP clients range from international corporations to solo operators. Some of our clients used to own their own K9 teams; they recognized the value in the service, but they don’t have the time to deal with the dog training or employee turnover. There are good margins on our services, so our clients make money, free up staff for sales or production work and, because we never perform pest control treatments, we aren’t competition. Other clients just consider us part of their liability protection plan since we are an independent inspection source.”
— Deanna Kjorlien, President, Green Dog Pest Service, Gig Harbor, Wash.
Andrew Sievers
“Hire primarily to shore up your weaknesses. Hire honest and nice; teach the rest. Remember, we are in customer service. Once you realize how bad customer service can be, you will know what you need to do to grow and become successful.”
— Andrew Sievers, ACE, Co-Founder, Profishant, Fairhaven, Mass.
Aaron Veal
“Stop borrowing money! I can’t tell you how many PMPs tell me about their new trucks or equipment, then in the next breath complain about how they can’t pay their bills. I understand the need to have top-tier equipment — that’s what I buy, too. But this industry’s margins are pretty good; it takes the equivalent of a drunken monkey to really screw things up financially. If you’re struggling, it’s because you’re not doing the math right. First, charge what you’re worth; don’t undercut yourself. And second, reinvest in the business, not just your toys and comforts.
“One more thing: I don’t run specials for new customers. If you want the best, you’re going to pay for the best. I do run specials for existing customers to reward their loyalty, however.”
— Aaron Veal, ACE, Owner, Phoenix Pest Control, Marysville, Tenn.
Kevin Sherrill
“Bring in the professionals. We rely on our accountant to ensure our ideas are financially sound. We hire experts to help streamline processes and marketing strategies. We want to grow but in a manageable way. That’s why we rely on industry peers and consultants to help us as we grow the business.”
— Kevin Sherrill, President, Sherill Pest Control, Manchester, Tenn.
“When you fly by the seat of your pants, it’s hard to put your wallet away.”
— Jerry Schappert, ACE, President, The Bug Doctor, Ocala, Fla.
The post Budgeting and investing lessons learned appeared first on Pest Management Professional.
from Pest Management Professional https://www.mypmp.net/2021/01/28/budgeting-and-investing-lessons-learned/
Sacramento CA
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