For most of us, digging deeply into finance, accounting, bookkeeping and other financial tasks is as dreaded as a root canal.
Not so for Kelly Rogotzke, co-owner of Done Right Pest Solutions, and Ron Swindall, chief financial officer and business development for Clanton Pest and Holifield Pest. Both come to the pest industry from outside and bring with them a passion for helping their companies improve their bottom lines through solid financial practices.
They offer some tips for understanding more about your company’s finances—even if you don’t approach them quite as passionately.
It’s an adage for a reason: Failing to plan is planning to fail. Rogotzke said when Done Right started, the owners set short- and long-term goals. “We make sure to revisit those on a regular basis,” she said. “It’s easy to get stuck in the day-to-day. But it’s important to ask, ‘Am I still headed in the right direction? How do I get back on track to meet those goals?’”
Good Service Saves $
Rogotzke, who came to the pest industry from banking, sees customer service as a solid through line. She once worked for an upscale grocery chain in the Midwest that famously did no advertising. “Their philosophy was, ‘If we’re providing a great service and product, people will share that.’ That was the philosophy we took as well. If you do a good job, people will talk about it.”
It also helps eliminate the need—and cost—of callbacks. “Initial appointments might take a little longer,” Rogotzke said. “But that 30 extra minutes we spent is much better than doing it twice.”
Understand Where the Money Is…And IS Not
For Done Right, that has meant a focus on multifamily residences rather than business or single-family. “From a financial standpoint, the fewer stops they have to make, the less fuel they’re paying for,” Rogotzke said. “It’s a better schedule for the technicians and easier on the bodies.”
For Clanton/Holifield, it meant saying goodbye to bat remediation services, something that took more time than it was worth, Swandell said. An added bonus: The trucks no longer have to carry large ladders, and the work is outsourced to an expert. “I am able to cut the capital investment down to where what I have is always making me money,” he said.
Analyze the Cost of Opportunity
Every hour spent on one task is an hour that can’t be invested elsewhere. Analyze what that loss of time—or opportunity—is really worth. When Swandell moved the company away from bat remediation, the technicians were able to service a lot more customers. “The opportunity to do the bat job with a $500 to $600 cost was not worth the cost of the quarterly services that could have been done in that same amount of time.”
Rogotzke started a new business during a pandemic, so she knows what she’s saying: “You have to anticipate that there will be setbacks. Mistakes happen. There are things you can’t control, like the economy, the price of gas and chemicals. You have to anticipate those things will happen, even if things are going well.”
Put Your Money Where Your Mouth Is
Don’t always look for a loan. Be willing to invest your own money, Rogotzke said. “Banks aren’t willing to loan money if you don’t have an established business. But if you don’t have any skin in the game, are you as focused? Whenever you do have an opportunity to get a loan, you have to utilize that. It builds your credit so you can get more loans later.”
Spend More to Make More
Servicing a seven-county area in Wisconsin, investing in bigger trucks made sense for Done Right. “At the end of the day, it costs more to leave it parked in the driveway,” Rogotzke said. “Smaller trucks and vans make sense in parts of the country. We have to fight snow. We focus on multifamily, and a lot of them have very narrow roads to get to the buildings. We are definitely spending a little more money, but we’re justifying it in a way that has panned out.”
Take Advantage of Technology
It sounds simple, but Swandell instituted a program that had the technicians depositing checks at a local bank. Previously, the technician drove back to the office, handed off the check to a clerk who would input the information into the system and then make a deposit. Now, technicians carry their own deposit books, fill out a deposit form, take a picture, make a deposit and send a copy of the photo to the office. “The accountability of having each individual technician to make their own deposits has saved tons in the office,” he said. Added bonus: Technicians can stop at a branch convenient on their way home and save some time.
Seeing technology solutions was easy for Swandell, who spent most of his career with a technology company.
Drill into Details
“Forget lumping all income into one line item in the books,” Swandell said. “I wanted to know what income was related to general pest, and what was termite.” He did the same thing with expenses and now has a better idea of everything that goes into the cost of delivering a service.
Revenue vs. Profit
Income isn’t the important consideration. It’s what is left after expenses are paid. “When you get to the end of the year, if you’re not ahead in the profit side, but are ahead in the revenue side, something’s wrong,” Swandell said. “There may be times that you’re going through a fast growth pace that will take place, but that should not be happening every year. Sometimes having a tight year is necessary to grow.”
“Profit margins should be in line as well: not too generous or slim,” he said.
“All of the pest-control periodicals will have articles come out that give an idea of what the industry margins are,” he said. “You’ve got to look at those benchmarks and determine what’s right for you and your company.”
Waste Not, Hire Not
Labor costs are the highest expense for a typical company, but it’s one in which Swandell sees a lot of waste, “because companies don’t hire the right people.” His company pays at a higher rate than his competitors, he believes, and that is because of better hiring. Routing software helps them work more efficiently, too. “Windshield time does not make money for the technician or the company.”
Don’t Compete, Collaborate
There’s no need for consultants when the experts are already within the industry—and often freely share. Rogotzke said she has found other companies willing to share information. “We’ve been the same way. Even a technician filling up at the gas station when another pest control company rolls up. They talk. We get a lot of information that way.”