[New Opportunities] Commercial Bids for Maximum Profit

f all the pest control topics I am asked about, commercial accounts questions top the list. Many small operators try to avoid commercial accounts (particularly food-handling establishments) due to lack of knowledge and questionable success. For those pest management professionals who have commercial accounts, or are thinking of expanding into the commercial sector, especially restaurants or food service, it is critical to understand some key factors.

THE PERFECT BID. Perhaps the most daunting issue when dealing with commercial accounts for the first time is coming up with a complete bid. Placing a bid that is acceptable to the customer, as well as being profitable to your company, can be tricky. To make matters worse, of all the pest control services that are offered, commercial account bids are far more variable than any other.

When one of my customers recently showed me the five bids he had for his restaurant, I was not all surprised when I found they ranged from $45 to $180. To compound things further, some contracts had additional fees for control of indoor breeding flies, rodents or if they had to come back for a retreatment during the month.

Just to add more problems, most sales people really do not have a firm grasp of just how much effort, time and chemical is needed in a commercial account compared to a residential account.

PRICE IS KEY. Foremost to our potential commercial customer is price. It’s not how many roaches they see, or how many rat droppings are on the floor, or how good you or your company is; it’s price.

A good general manager or owner of a restaurant knows the price impact in negative terms of having roaches, flies or rodents. Loss of revenue from repeat customers, poor reputation from word of mouth and decreased morale of employees all contribute to a net loss. This makes your pest service suddenly far more cost effective in terms of profit to a restaurant manager.

Unfortunately, many owners or general managers are not quite so savvy about the cost impact of poor pest control, and look only to the dollar amount of your service.

I cannot recall how many conversations I have had with owners who had insect infestations but would not budge from the $40 price that they were paying to their current pest control service provider. Never mind that they were basically throwing that $40 away (plus untold additional profit).

To make commercial pest service profitable, you must make the customer understand the cost of not having good pest service. Set some basic cost rules for your sales force first. I like to use the $100-150 an hour mark in my area. You may need to adjust this price depending on the geographic area, chemical restrictions in place or required certifications. Now all you need to do is figure out how long your technician will be on site.

COMMERCIAL VS. RESIDENTIAL. I must stress to those new to dealing with commercial accounts, especially in the food-service industry, is that bids cannot be based on the same principles used for residential accounts. The first thing to remember when selling a food service account is that the technician is going to be at the site longer than what the square footage suggests. I can have two identical kitchen layouts, including square footage, equipment and appliances and come up with two dramatically different quotes.

Square footage is important in an overall quote, but far more important is kitchen clutter. The more boxes, paperwork, to-go containers, unused kitchen utensils and other miscellaneous "stuff" in the kitchen or bar areas makes the technician’s job far more difficult. Boxes and other paper goods provide harborage and protection for insects from even the best inspections. Chemicals and baits are not nearly as effective in terms of control and prevention of your target organisms in a high-clutter environment.

Well-run restaurants are rarely cluttered. Many culinary schools require students to take classes on kitchen management, organization and efficiency. Some courses cover basics of pest management and suppression, and managers are quick to adopt suggestions you provide to help control pests.

When ideal conditions like this are present, technicians can provide a comprehensive pest control program that is not only efficient, but cost and time effective as well. Under these circumstances, you can be more competitive on your overall bid.

STRUCTURE CONDITION. Another factor to consider in a restaurant or food service bid is the age, overall construction and condition of the structure. The older the kitchen, the more gaps, cracks, crevices, nooks and voids inevitably are present. Floor and baseboard tiles crack or fall down, fire retardant shields separate from walls, moisture and humidity seep into cracks and voids, drains accumulate buildup and countless other minor problems can be found as buildings age. This makes for not only a prolonged treatment for your technician, but provides a suitable environment for many of the commercial pests.

Even the best technicians can find prolonged control difficult in old buildings. Depending on the type of restaurant and past pest history, multiple services per month may be required in older structures.

In contrast, new or newly remolded kitchens are not only free of many problems older structures face, but are designed better and use better materials. Many new kitchens have single pored floors and baseboards versus tile. Walls are designed to resist moisture, equipment is on rollers for easy accessibility and humidity control is designed specifically for kitchen environments.

Type of construction plays a vital role in the overall bid. Restaurants on slab construction usually have fewer problems than crawlspace or basement construction. Restaurants in strip centers or malls face not only the common pest problems of other restaurants, but may face a much more difficult time in dealing with rodents or occasional invaders.

Homes that have been converted into restaurants may be your technician’s hardest challenge, as they face a combination of insect and rodent problems associated with old residential structures and that of the commercial kitchen.

CLEANLINESS COUNTS. The last factor in the bid is overall cleanliness. Many technicians disagree with me and would place how clean a kitchen is at the top of the price list. After hundreds of kitchens and food prep establishments, I found there is not a huge difference in a moderately clean kitchen and a spotless one in controlling pests.

If food debris is piled up 3 or 4 inches deep under some equipment, I count it as clutter and price accordingly. If the kitchen is in unsatisfactory condition, I question the management’s ability to successfully run a restaurant and either double my price or walk away.

You may find that in following some of these principles, your bids may seem high. This is where your sales force training pays off. Underpricing bids only leads to frustration and failure for your technicians as they will not be willing to spend the time necessary to do the job right. Show your potential customers the cost of not having good service in terms that they can relate to. Let them know how long the technician will be on site and the basics of the job.

Try to avoid making unrealistic promises during the bid about how fast control will be achieved. If the pest problems are quite severe, you may want to add the cost of an additional service or two in the initial treatment price. With proper pricing, your technicians will be willing to spend the time necessary to solve commercial pest problems and still make profit for the company.

The author is an entomologist and owner of Ind-Com Pest Services. He can be reached at raylsworth@giemedia.com.