[My Biggest Mistake] The Wrong Way to Grow

Departments - My Biggest Mistake

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February 26, 2015

When I joined State Pest Control in 2007, Wes Wooten, the company’s new owner, had a vision to grow. Established in 1970, State Pest Control had built a solid reputation in Sampson County, N.C., but Wes saw greater potential and brought me on to not only continue growing the business within the county, but also develop new accounts in the central part of the state. We knew there was a need in the central counties because prospective customers there were picking up the phone to ask us if we would service their area.

Whether they had heard of us through our Sampson County customers or had seen our trucks (which are really rolling billboards for State Pest), we weren’t about to say “no” to business. We went anywhere customers asked us to go and, within two years, we had expanded into four more counties. Of course, we had to hire additional technicians. Then our growth snowballed. We found ourselves servicing accounts that were well out of our target footprint and operating much less efficiently than we would have liked. Here are the issues our unmanaged growth created:

  • Our bottom line suffered because (a) we were spending too much on fuel driving from account to account; and (b) our employees weren’t able to make enough stops to be profitable. They were spending so much time driving that they might make only a half-dozen stops a day. Our new philosophy became that if a customer lives farther than a 20-minute drive from one of our offices, it is not profitable for us. (Our ultimate goal is to have offices throughout the state so all potential customers are within that 20-minute drive.) We tightened up our footprint and found that technicians who had been servicing scattered routes are now able to make more stops. One technician doubled his stops — from six to eight a day to 10 to 14.
  • Our employees weren’t making as much money as they could have been. Again, long drive times were lowering production, and when you’re paying your people a percentage of production, this can really hurt their paychecks. Now that they’re spending more time servicing accounts and less time on the road, production — and resultant pay — have increased significantly.
  • Our customers, in many cases, were not getting the prompt service they would have liked, particularly when it came to callbacks. We lost some customers because we couldn’t get to them quickly enough, which was unacceptable to us. When we began growing the business in 2007, quality of service was our core value. We were committed to doing the job right the first time, but in cases where a customer did need a callback, we would strive to re-treat within a 24-hour period. Our old way of growing wouldn’t allow this. Our new way of growing — within our target footprint — does.
     

How did we regain control and tighten up our footprint? At the end of 2010, we began making strategic acquisitions in our areas of greatest growth. We acquired four businesses in four years, and we’ve opened three offices in addition to our corporate office in Clinton, which enables us to serve customers within a 100-mile radius. Our profitability has grown, our technicians are more satisfied with their pay and service areas, and our customers are enjoying great service again (and staying with us!).

Growth is good — it’s what most of us strive for — but if it’s not managed wisely, it puts stress on owners, managers, employees and customers. We’re grateful that we have been able to leverage our growth even though it was out of hand for a while, but, if we had the opportunity to do it again, we would have had a well-thought-out growth plan and stuck to it!

 

As told to Donna DeFranco.