Growing a pest control company to $15 million in revenue. 4 acquisitions under our belt. Colorado / Utah
Colorado
Joined April 2023
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Got two new Google profiles verified today.
We rent 5 offices across our Colorado.
We will have 7 by Christmas.
Can’t stop won’t stop.
How can we afford door to door sales?
It’s hard up front. Sometimes paying 80% commission in the first year of revenue.
Here’s how we make it up.
Rep signed up a customer last year.
$594 contract. We pay the rep $475.
One year later we find termites starting up in the Crawlspace.
$3350 today with no additional ad spend.
$300 dollars additional every year for the warranty.
Average customers stay 4-5 years.
We will likely get $6500+ out of this customer on $475 in commissions.
Can my marketing guys let me know if this is sustainable?
Also, views while working today are worth something.
I didn’t plan on sharing this online because we didn’t do it for clicks, but yesterday I shared a post about lending money to employees.
Earlier this year we had an employee have his first kid. He took all 12 weeks of leave through our state program and they only pay a percentage of your salary while you’re off.
He was running out of money and missed rent.
He didn’t know he had options.
He called me on a Friday right after he came back to work and said the sheriff was coming to evict them Monday.
We ran a check straight to his landlord for $1500 and gave him a little extra to make sure nobody was hungry.
It wasn’t a loan. He’s not going to pay it back.
We will negotiate with our vendors, look for ways to cut costs, and maximize profits but I’m not going to have a little kid be homeless when his parents work for me.
Our payroll already has a pay advance feature that employees can tap into if they need.
If it comes down to it we’re going to gift them money once and let them know it’s a one time deal. After that, they’ve gotta budget better and get back on track.
I’ve got another employee in a similar situation due to some recent medical bills. We’re feeding him some overtime but we will likely give him some extra money to get some momentum towards saving up.
Almost every comment saying
- you can’t do this
- you can’t do this with a big company
- don’t do this
- if you do this you are stupid
I will share some more thoughts tomorrow but if you have an employee that’s flat broke, how are you going to say no when you know he’s facing eviction and he has two young kids at home?
Walk me through the process there and the thoughts in your head as you try to sleep at night.
That’s cool you went to business school. What did they teach you when your employee asks
“can I borrow a $1000?”
We’ve acquired 4 businesses.
3 from boomers that seller financed us.
You are either participating in the silver tsunami or you are pretending like it isn’t real.
My cousin got a cancer diagnosis a few weeks ago.
She had surgery last week that went extremely well given the circumstances.
They removed a baseball sized tumor from her colon.
The doctor came in afterwards and said something to the effect of “I know your area of the state well. Lots of farming, water, and land. If they ever propose a data center there, vote yes. A lot of the success in this operation is due to things that we didn’t know 12 months ago.”
If you are anti data center you are voting against humanity.
Real improvements are being made to people’s lives due to AI and the cons to data centers are so small.
A local builder has his niche in ADUs and he’s crushing it. Has the market on lockdown.
He’s number one on Google, and was referred to me by my realtor and another good friend of mine that is his relative.
Our city has an incentive program where they waive ~$10k in planning fees for ADUs.
He has a variety of floor plans and it’s turnkey. $199k for a 900 sq ft ADU.
Includes all appliances and I think he even finds and places the first tenant if we want him to.
We’re breaking ground in 2 weeks and my cousin will do the same shortly after.
Said he built one recently in 2 months and 20 days. Will rent for $2000-$2400 a month.
Home run deal ya?
Kyle and I have this running bit any time a spam caller comes in asking for one us.
We get some info to verify it’s something we aren’t interested in then we proceed by saying “ok and you were looking for Kyle to talk to about this?”
“Oh you must not have heard. He recently fell into an active volcano.”
Try overcoming that objection.
The first company we bought kinda scammed us in two different ways.
They had a ton of customers pay for a year in full in the weeks leading up to closing date.
It was $30k or about 8% of annual revenue. Post close we kept servicing homes and sending invoices just for customers to tell us they had just paid for a year in full.
We ended up getting about half that money back from the sellers.
They were also bartering with a number of local businesses and taking pizza, burgers, massages, etc as payment. They logged the invoices as paid at market rate and all those customers declined when we preferred cash as payment.
Overall, probably took a $20k hit. Still cheaper than a quality of earnings report and a good attorney.
On deals this size I’ll keep taking the risk.
Circling back to my tweet a few days ago about selling your company data to an AI lab..
This is exactly why.
AI companies have forced their models every piece of written literature under the sun.
As book smart as you can get, but they don’t know how to run a company.
That’s why they are looking to buy data like email conversations, slack messages, internal ops and procedures.
They are trying to teach it street smarts.
If you thought these models were good at writing sops now, give it a year until they’ve consumed petabytes (look it up) of emails and human conversations in business settings.
Thank you for your time.
Alright, here’s the deal.
We’re aggressively adding software to our company.
Anand just left our office. This is the way too early review on Twine, but this is going to change the game for us.
Twine is everything we need.
- phone system
- lead tracking and attribution
- AI overflow call/text
All with insane reporting.
I’m not a tech guy but the system seems very intuitive. He came in person to make sure our entire office staff was onboarded and set up from day one.
We’ve closed $1.2 million in new revenue YTD.
Next year we will undoubtedly double that with this rocket fuel behind us.
My X page here has links to several softwares/vendors we now use. I just want to promote the people pushing us to the next level.
I will follow up over time to share our wins and losses and how everything pans out with Twine.
Ok so here’s what I am learning.
Some AI labs don’t care about your customer info at all. They need immense amount of data to train the bots on.
They don’t want a digitized excel sheet of customer info. Our 17,000 customer database is like 250 mb of data. Next to nothing.
They want a bulk export of your gmail, slack, CRM communications. They want hundreds of gbs of data. Real person to person communication.
We had a company reach out to us and the anonymize any customer info but they just need the words to feed the machine and make it learn.
So did we get much buy buying 4 companies with very small amounts of customers? No.
Did we inherit 4 gmails with a cumulative 50 gigabytes of human interaction over 30 years?
Yes, and it may pay off handsomely.
I’m becoming a “Silver Tsunami” course guru. Here's the curriculum:
- Chapter 1: Find a retiring business owner in the trades.
- Chapter 2: Buy his business
- Chapter 3: Plug in Ai to make things easy
- Chapter 4: Sell their last 30 years of data to an AI company to pay for the transaction (This is the new sauce)
- Chapter 5: Retire early.
John is a certified dog.
When we came to him we knew we had a good thing going but it wasn’t going to be sustainable the way we were structured.
Over the last 90 days we’ve made some changes and decisions that will benefit us greatly.
Our biggest takeaway was ownership.
If everybody is responsible for something then nobody is.
We have had too many things slip through the cracks and too many problems flare up because we didn’t assign an owner to anything.
I’ve the coming months we are making sure everything has an assigned owner all the way down to individual phone calls that come in.
If we have an issue, we won’t have to ask what happened and why nobody fixed it.
We can track down exactly who was in charge of that and why it wasn’t handled immediately.
Gearing up to hopefully cross $5 million in revenue next year and have a better process that bleeds into everything.
If you’re lost, shoot John a message.
I just finished up a 90 day ops sprint with @pestctrlguy and @kylemcdaniel20’s company King Pest Solutions.
Here’s the rundown of the engagement.
Casey and Kyle have built a business on three things:
1. Strong sales processes
2. Quality service
3. Co-effective (is that a word?) leadership
For the record, I don’t condone the co-leadership model unless it’s run like Casey and Kyle. They’ve figured it out.
They chose to invest in their ops, and getting a behind the scenes view of what they’re building was eye-opening.
My job was to help strengthen that operation and reduce owner dependency.
Here’s what we worked on:
-Defined office and field leadership roles.
-Established clear ownership and decision-making authority.
-Built scorecards and measurable performance expectations.
-Developed SOPs for key operational processes.
-Installed accountability and performance management systems.
-Evaluated compensation structures and incentives.
-Built the framework for managers to lead without everything running through ownership.
-GWC’d two CSR’s
If you follow these two guys, you know they are fully sales-minded and sales-focused. What you may not realize is how operationally sound their business is.
The team truly respects their leadership, and rightfully so. They care about their employees. They want them to succeed.
The foundation they’ve laid allows the risks they’re taking to work out in their favor.
This engagement was not about fixing anything. They could have continued as is and had a really solid business.
It was about preparing them to double in size over the next 2 years.
I have no doubt they will succeed.
I tweet about once a year to remind people that “recurring” and “reoccurring” are different words
Examples-
Recurring - customer receives services every quarter perhaps contractually
Reoccurring - a builder that has us do a one time termite pretreatment on every home they build. Project based but we can count on them to send us multiple projects a month/year
One time - simply a one time project. No expectation of providing future services
Our revenue mix is all three of these. All different and all important. It is so important to know the difference.
But ya, recurring makes that valuation go up fast.
As someone that owns a number of project based businesses they are not recurring. You do have repeat customers but they are nothing like HVAC or Pest Control. You have to actively manage bookings & backlog. And they are best when they lead to repeat service business.
OTOH, if you are trying to do ETA I strongly recommend you play in spaces that PE avoids. Competing with PE is just very hard and you are probably better off finding deals that PE will pass on.
Flew out to Phoenix for the weekend.
Business partner is holding down the fort.
It’s hot here. So blessed to not live in Phoenix.
Remodeling? Building a new home?
Get a termite pretreatment done on your home.
Depending on your area will likely cost $250-$500 and could save you thousands of dollars down the road.
An ounce of prevention is worth a pound of cure.
At this stage, a professional treats the bottom 18” of all the wood that touches the concrete.
The wood soaks up this product and protects it long term.
If termites find your home, they will eat this treated wood and die off before they can set up shop and do any damage.
If your builder isn’t doing this on every home, they are cutting corners.
We’ve been dealing with customers calling through LSA for years. Here’s how we have been successfully battling it.
Mass text/ email them all.
Say something like “we want to provide you the best service at the lowest price. To help keep our advertising costs down, please save this number and call it directly if you ever need anything #”
You can automate it to do this directly after new people sign up.
Some people will still hammer that LSA line but it does help significantly.
My partner and I have a “daily brief”slack channel for just the two of us.
We connected ChatGPT and can have it search things here. This is especially helpful for payroll where people may have taken PTO, worked a partial shift, or overtime.
I’m out of town for the weekend.
Yesterday was a crazy one.
One thing after another.
