An Outside(r) Perspective

Features - Cover Story

Do industry outsiders who start pest control companies have a built-in advantage? If so, what gives them an edge? And how can you use these principles in your own business?

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June 5, 2020

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Pest management is fertile ground for would-be entrepreneurs. Most who start successful businesses in this space have spent a considerable amount of time working in the industry.

Research backs up this claim. A 2018 study by Northwestern University, Massachusetts Institute of Technology and the U.S. Census Bureau found the majority of successful entrepreneurs in the U.S. are middle aged — about 45 years old on average — and have extensive experience in the industries or sectors in which they compete.

“It’s true that your chance of hitting a home run is about 2 or 2½ times higher if you have worked in a very narrow industry in which you start this business. It’s a big upward predictor of success,” says Ben Jones, a professor of strategy and entrepreneurship at Northwestern University and coauthor of the study.

Experience in a complementary industry can provide valuable insights, as well, believes Jones. Consider Ray Kroc, who sold milkshake machines. When he arrived at the McDonald’s hamburger restaurant in California, he was able to recognize an innovative product and franchise opportunity because he had spent decades visiting restaurants across the country.

Without intimate industry knowledge, you’re less likely to hit it out of the park, Jones says.

OUTSIDE ADVANTAGE. Still, there’s no denying the success of outsiders who launch businesses in pest management.

Dan Gordon, owner of PCO Bookkeepers, easily gets one call a month from outsiders asking about the industry. “Most of them are tire kickers, but there’s definitely a lot of interest,” he says, though he’s unsure how interest in pest management compares to that of other industries.

Many outsiders are attracted to the earnings potential in pest management — the high profit margins and recurring revenue. Others want to build a business hands-on and are drawn by the low barrier to entry. Some start businesses from scratch; many enter the market by buying a small, established pest management firm. Many never expected — but are now delighted — to be working in the industry.

Not having industry experience can be an advantage. “I certainly believe that outsiders can do extremely well in areas with no prior experience by bring(ing) a different perspective to start-ups and industries and are not locked in to traditional company or industry mindsets or models,” says Michael Merenda, a professor of strategic management and entrepreneurship at the University of New Hampshire.

As such, outsiders often bring “some diversity of input, some spark of novelty, some new combination that’s really quite distinct” to otherwise conventional services, product offerings or business models, says Jones.

One example is the fast-growing door-to-door sales companies started by outside finance experts. “Those guys are changing the industry and a lot of the old brass are not happy about it at all,” says Gordon.

But outsiders also face challenges. “Sometimes they overcomplicate things because they’re from a more sophisticated industry,” admits Gordon.

And rarely is innovation a solitary endeavor, according to research. It’s “far more likely to be produced by a team than an individual,” says Jones.

We talked to a number of entrepreneurs who jumped into pest management with no or limited industry experience to learn what they brought to the party and how every business can incorporate these values to drive innovation and success.

PROFILES: Industry Outsiders

What did successful entrepreneurs do before pest management? What challenges did they face, and how did their prior experiences create new opportunities for their companies? Find out.

 

CORPORATE LAWYER

Simon Leith, president, HomePro Pest Control, Toronto, Ontario
Leith

Before: Leith worked at a large law firm, which exposed him to entrepreneurs who had built exciting businesses. “That gave me the itch to try to do that on my own.”

Why pest management? For two years he researched different service industries and companies. “Ultimately it was the pest control industry that attracted me the most and I realized there was an opportunity in that space to do something different.” Leith purchased HomePro Pest Control in May 2019.

A surprise similarity: In both law and pest management, you’re hired for your expertise to solve client problems. Both require stellar customer service, an ability to deliver value and treating employees — your most valuable asset — well, he says.

On jumping in headfirst: “The team at HomePro was very patient with me and helped get me up to speed. I learned a ton from our team.” Leith also got his exterminator’s license.

Unexpected challenge: Recruiting technicians. In his previous profession, “there’s no shortage of lawyers.”

Lesson from the law firm: Clients pay big bucks for expertise and lawyers do everything to exceed customer expectations. As such, Leith is elevating customer service at HomePro Pest Control. “I see huge potential for things that we can do that improve the company but also change the industry as well.”

Happy with your decision? “I have not looked back for a second. Every day is a new challenge, a new opportunity.” He left his law career “to build a business and grow something and create something of (his) own.”

GOLF COURSE SUPERINTENDENT

Jeff King, president, The Pest Rangers, Wilkes-Barre, Pa.
King

Before: King worked as a photographer, garbage man and at the Wilkes-Barre municipal golf course, where he became superintendent. As a kid, he was always an entrepreneur, buying three candy bars for a dollar and selling them door-to-door for a dollar each.

King’s a-ha moment: He was sent to the short course at Penn State to learn about pesticides for the golf course. “I’ll be honest, I never knew pest control companies existed until I took that course at Penn State.” He started The Pest Rangers in 2008 on the side while working for the city. He left to run the company full time in 2014.

The biggest challenge: “Learning the operational part” of the business. “There were still a lot of things I didn’t know were out there.” This included CRM software and insurance policies designed specifically for the industry. As such, King had to break relationships he had with local vendors. “Align yourself with an industry professional, not somebody that you’re friends with.”

Lesson from golfers: Prioritize the customer experience. Golfers are very opinionated about course aesthetics, King said. As such, he developed a skill for dealing with these judgmental customers, and he ultimately made customer service the foundation of his company. Every phone call, for example, is answered by a person, not an automated system that annoys and detracts from the experience.

Are you glad you took the leap? “One hundred percent. That is the best thing that I ever did in my life.” Today, The Pest Rangers has revenue of more than $1 million.

PRE-MED STUDENT and SALESMAN

Kevin Thorn, president, Thorn Pest Solutions, Pleasant Grove, Utah
Thorn

Before: While attending college to become a pediatrician, Thorn worked in sales for a fundraising company. He grew frustrated with this job and started looking to buy a small, side business that would give him an income and help get him through medical school.

Why pest management? Thorn didn’t choose the industry as much as he chose the company, which he bought in 2007. “I saw opportunity and it was kind of growing regardless of what was being done.”

The challenge: It wasn’t nearly the “hands-off” business he was led to believe, instead requiring considerable effort. Even solving pest issues early on was difficult. “We kind of didn’t know what we were doing and needed to be better than we were.” He quickly realized, “if we’re going to do this, we’re going to make this our life’s work.”

The biggest surprise: “Just how fun it was.” He’d always enjoyed science and problem solving and was amazed to find pest management “hit the nail on the head” of his interests.

Leveraging interest and experience: Sales experience gave Thorn confidence to take on challenges. He also pushed the company — “I’m not a patient man” — to adopt new technologies to make it more scientific and assessment based. “We’re not scared of change.”

Was it the right decision? Definitely. “I just got so excited about doing something different and owning a business and the entrepreneurial side of it. It ended all other plans. I think my mom is still catching up on that one. I think she’s finally come to grips that this is a good path.” Today, the company has 30 employees and revenue of $2.1 million.

SOFTWARE DEVELOPER

Donnie Shelton, CEO, Triangle Pest Control, Holly Springs, N.C.
Shelton

Before: Shelton was a U.S. Air Force Reserve pilot and chief Java architect at a Fortune 500 company. “I knew I wanted to own my own business.”

Why pest management? “What attracted me most to the industry was just the fact that it was fairly recession proof and it had decent margins.” He did his research and bought a small pest control company in 2006.

A bonus: “It’s a people business, too. I like interacting with people and it was different than when I was writing code.”

The surprise: How technologically behind the industry was, and to some degree still is. “As an industry we are not early adopters.” It’s important to use technology to improve efficiency. “There’s no money to be made if you don’t leverage technology in the right way.”

How did your technology experience help? Shelton says his company was one of the first to embrace internet marketing while others spent big bucks on directory advertising. Early on, he also changed from monthly to quarterly service and he recently instituted a triannual service program. Technology, business processes and consumer preferences change faster than the pests, Shelton says.

Would he do it again? Apparently. After growing Triangle into a multi-million-dollar company, Shelton started a new venture to provide better digital marketing and people management for pest and lawn management companies. It sprung out of his frustration at having to train five different agencies over the years on these industries. He formed Coalmarch in 2013.

INDUSTRIAL CLEANING TECHNICIAN

Natasha ‘Tash’ Lugg, owner, TNT Pest Services, Sydney, Australia
Lugg

Before: Lugg worked in industrial cleaning, providing exhaust cleaning and maintenance services for restaurants, cafes and take-away shops.

Why pest management? “We constantly got asked if we knew of any ‘good’ pest controllers, and almost daily saw roach infestations in restaurants that weren’t being managed appropriately.” She got her qualifications and last year started TNT Pest Services for the food industry.

The biggest challenge: Providing flexible, tailored solutions for pesticide-resistant German cockroaches in old buildings that need repair. “Repairs are often my number one recommendation to clients, and my most popular add-on service.” She often deals with huge, difficult infestations where food and water are plentiful, and the use of chemical control is limited. “You have to be able to think on your feet, and problem solve as you go.”

Her biggest surprise: “The sheer lack of customer loyalty amongst our clients to their previous pest control providers.” While great for her start-up, it’s an ever-present reminder to provide excellent customer service and to stay up-to-date on the most effective control methods, she says.

How has previous experience helped? Lugg was already familiar with cockroach activity in commercial kitchens — where they liked to hang out, eat and breed — and the problems they caused for clients, from fines to equipment failure. She also understood the need for after-hours service. “As a result, I think I’m able to offer a higher quality of service to my clients.”

Was starting your company the right move? “It’s one of the best decisions I ever made,” she said.

EXTENSION ENTOMOLOGIST

Dr. Chris Christensen, consultant and franchise owner, Truly Nolen and Critter Control, Lexington, Ky., and Cincinnati
Christensen

Before: Christensen was a professor and extension entomologist for the University of Kentucky. He left the university to start his own pest consulting and service business in 1990.

Why pest management? “I was around pest control operators a lot. I was kind of familiar with how the industry works.” For 16 years he organized UKY’s short course, conducted field research and helped professionals solve pest problems.

The challenge: Running a company. “It was by the seat of your pants quite a bit, initially.” Back then, Christensen didn’t understand overhead, cash flow, recurring revenue, budgeting, how to price services or the value of selling add-on services.

The a-ha moment: Admitting he needed some help. He signed on for a Truly Nolen franchise in 1995 for the operational support (he bought into Critter Control in 1990). Another important move: Hiring a good office manager.

How experience gave an edge: Christensen saw opportunities to develop services using control methods not yet embraced by competitors, such as cockroach baits and Integrated Pest Management. “At that time, nobody could even say the word IPM. They didn’t believe in it.”

His realization: You can’t run a business like an extension office. Employees begged him not to answer the phone because he’d give away more pest control than they sold. He still loves “to go out and solve problems,” but knows if they don’t sell these jobs no one gets paid.

Are you happy with your decision? “I have never looked back.” He currently owns two Critter Control and three Truly Nolen franchises.

RESTAURANT and NONPROFIT MANAGEMENT

Mary Hernandez, owner, Mission City Fumigation and Hernandez Sewing, Santa Maria, Calif.
Hernandez

Before: Hernandez worked in the restaurant industry and then managed the Girl Scouts of California’s Central Coast.

Why pest management? Her husband Ed worked at Mission City Fumigation. They bought the company’s tarp sewing division in 2005 and a branch location in 2008. She took over operations of both companies in 2010 when Ed left for a different job. “I fell into this and now it’s a huge passion of mine.”

The challenge: Earning respect of employees and customers. Hernandez got her fumigation license and spends 40 percent of her time in the busy season working alongside employees. “I like to be hands-on. It makes me feel good.” It also gave her confidence as questions are no longer directed to Ed and the crew now calls her “boss lady.” “I think I’ve come into my own finally.”

How prior experience helps: Restaurant work instilled the value of customer service. Managing a nonprofit that relied on 400 volunteers staying happy taught her the importance of employee appreciation. “I try to do things that lets them know that I care about them.”

Being a woman in fumigation: Helps her connect emotionally with homeowners and Realtors. She understands the importance of “home” and the need to take special care of it. She says women are good communicators and community builders. “I think that’s what makes us a successful company, that female touch.”

Has it been worth it? “Most definitely. This has been a record year for us.” In 2023, she will become president of Pest Control Operators of California, only the second woman to hold that role.

INSURANCE SALESMAN

Tony Bost, CEO, Happy Cornerz, Paris, Texas
Bost

Before: Bost is an inventor who was developing various products and selling life insurance on the side to make ends meet.

Why pest management? “I saw the need for change in glueboards and I knew what the future generation would love.” He created and patented a glue trap for use in the upper corners of rooms where pests like to congregate, founding Happy Cornerz in 2016.

The challenge: “Without the years of industry experience, many people didn’t know who I was and didn’t have an open ear” for his innovation, he said. That changed with recognition from Texas A&M University and the ensuing social media campaign that created international awareness among pest professionals and consumers.

How prior sales experience helps: He’s a good listener and heard people’s frustration with glue traps. He understood that “no” actually means “not yet,” and that learning from mistakes can bring you closer to success. “The more we can learn, the faster we can apply ourselves to the success we envision.”

Happy with your decision? Yes. “It’s amazing seeing how happy people are when using the product.” Not only did he achieve a patent, but his trap is disrupting the status quo, he says. “It’s all about changing with the times and we’ve brought about a beautiful change to make it good for everyone.”