As a first-generation pest management business owner, I didn’t know quite what to expect when I started Johnny Bugs in Sarasota County, Fla., three years ago. I had industry experience, having served on the management team of a local pest control company for more than a decade, but until you get out there on your own, you really don’t know how things are going to go.
I took any piece of business I could get my hands on — commercial, residential, you name it — but discovered fairly quickly that if you don’t have a niche and a systematic approach to servicing accounts, you’ll never make a profit. In short: simplicity = profitability. You can’t be all things to all people. If you want to succeed, you need to find your niche among your competitors and exploit it.
I found my niche in large part by eliminating the type of work that was clearly not profitable for me. For example, commercial work — especially restaurants — proved to be high maintenance and low profit for my small company. What I realized after servicing restaurants for a year or so was that we needed to work crazy hours to accommodate their service hours (they generally requested pest service at 5 a.m.), the pest pressure was intense and the environment was difficult to treat (in spite of our recommendations about sanitation, we were always running into standing water, food residue and other conducive conditions).
On top of this, large companies would come into our accounts and offer to practically give away treatments. I don’t care how you look at your books, charging $50 for an hour and a half of work doesn’t bring anything to the bottom line. Larger companies may be able to make this investment into accounts to win them over due to their economies of scale, but for my small business, it wasn’t worth the investment and effort. While you would hope that your commercial customers would stay with you in spite of these tempting offers, they frequently don’t. To them, pest control is a commodity, a necessary service, and most of them will go for the lowest price when presented with that opportunity.
So, after reviewing my P&L and doing a lot of soul-searching, I decided to walk away from commercial business and instead pursue the residential market, where I could build true relationships with homeowners, whose focus leans toward quality over price. The reality, said my books, was that residential pest control offers a much higher profit margin for my business. I “costed out” expenditures for service calls and products and found that if my technicians take the time to do the job right the first time, we can net a 30- to 40-percent margin on virtually every account.
To reach that margin goal, I knew we would have to control our processes carefully. We needed a system to ensure that we were optimizing efficiency on every call while providing exceptional quality. This is where my experience with time and motion studies came into play. My background in labor relations taught me that if you boil every process down to a few succinct steps you and your team members can follow on every service call, you will become more efficient, effective and profitable. Again, simplicity = profitability.
From an ergonomics standpoint, this means having a schematic for how each truck is set up and loaded. From a service standpoint, it means establishing a standard protocol. You might add a couple of extra steps when you’re doing a special treatment — German cockroaches or carpenter ants, for example — but for the most part, you can go through the same steps, in the same order, on each service call to solve your customer’s problem and make the most of your time. (When customers are asking a lot of questions, we invite them to “walk and talk” with us, so that we can continue our work as we build the relationship.)
Since we began targeting our services to residential customers only, we have improved our profitability and increased our business substantially. Now that we have identified our niche, we are on our way to owning it!
As told to Donna DeFranco.