PestWorld - July/August 2017 - 15

KEY TAKEAWAYS
■ The price you offer for
products and services will ultimately
determine whether or not your
business is profitable.
■ Pricing is about understanding how
to calculate an acceptable dollar per
hour of service using break even
analysis to ensure a 50 to 55 percent
gross margin.
■ Tight routing is just as or even more
important than pricing.
■ Route efficiency can be accomplished
through route optimization software.
■ When you improve route efficiency,
not only will you maximize the
number of customers you can
service each day, but you'll also save
money on fuel.
■ Incorporating GPS tracking in trucks
allows managers to keep tabs on
where technicians are throughout
the day, monitor their driving habits
and respond to urgent customer
requests more quickly.
■ If you want to boost profits for your
business, it's crucial to keep costs
under control.
■ It's important to review financial
and operational statements that are
accurate and pinpoint the proper key
performance indicators including
profit, cashflow, sales and ROI on
marketing and sales dollars spent.
■ Consider working with a professional
accounting firm.

from sales of Gordon's book go to The Valerie
Fund. Visit www.thevaleriefund.org to learn
more about this charitable organization.)
According to Gordon, there are three essential ingredients for the ultimate pest management profitability: Pricing, route efficiency and
cost control.
The price is right: According to business
experts, the price you offer for products and
services will ultimately determine whether or
not your business is profitable. "Proper pricing
is extremely powerful," Gordon emphasizes.
However, pinpointing the perfect price
point can be tricky. If your pricing is too much
higher than your competitors' costs, you could
price yourself right out of the market. On the
other hand, if your price is too low, you may not
generate enough revenue to cover essential
business expenses. To make matters worse,
when you offer rock-bottom prices, it often
sends the wrong message. Consumers may
assume your "bargain" products and services
are inferior, low value or ineffective.
So how do you make sure the price is right?
"Pricing is about understanding how to calculate
an acceptable dollar per hour of service using
break even analysis to ensure a 50 to 55 percent
gross margin," Gordon explains.
Route realities: While all businesses must
contend with proper pricing, there's one element of profitability that specifically applies to
pest management companies: route efficiency.
"Tight routing is just as or even more important
than pricing as it determines a PMP's real return
per hour and minimizing windshield time,"
Gordon explains.
These days, route efficiency can be accomplished through route optimization software.
These innovative programs automatically create routes for each technician, laying out the
most productive and fuel efficient way to reach
each customer. As new stops are added to a
route, the system instantly re-optimizes the
technician's schedule.
When you improve route efficiency, not
only will you maximize the number of customers you can service each day, but you'll also
save money on fuel. Some pest management
businesses have reported that route optimization software has allowed them to slash fuel
expenses by 25 percent a month. It also cuts
back on the wear and tear of company vehicles,
which greatly reduces overall business costs.
In addition to route optimization, pest
management companies may also consider
incorporating GPS tracking in their technicians'

trucks. This allows managers to keep tabs on
where technicians are throughout the day,
monitor their driving habits and respond to
urgent customer requests more quickly.
To monitor route efficiency, Gordon says
pest management professionals should
carefully review computer-generated daily
route sheets. "Make sure daily route values
are acceptable and customer skips are at a
minimum," he adds.
Controlling costs: Last but not least, if you
want to boost profits for your business, it's
crucial to keep costs under control. "There
are three profit levers in pest control that will
either or make or break a company's bottom
line," Gordon stresses. He says those three
components are labor (total company payroll),
materials and marketing.
"These three items make up well over half
the expense on a PMP's profit/loss statement,"
he adds. "Therefore, anything that can be done
to reduce these items will positively impact
the bottom line. Controlling other expenses
is helpful, but focusing on these three items
will give an owner the most control."
ACCURATE ACCOUNTING
There's no question that pricing, route efficiency and cost control are key to a pest management company's financial success. But how
can PMPs closely monitor these three components to boost their bottom line? According to
Gordon, it comes down to setting up and using
accurate accounting systems.
"It's important to review financial and operational statements that are accurate and pinpoint
the proper key performance indicators including
profit, cashflow, sales and ROI on marketing and
sales dollars spent," he adds.
Precise accounting also allows PMPs to better
manage their accounts, ensure they are getting paid by customers in a timely manner and
monitor how their company is performing yearover-year. It also ensures businesses don't over
or underpay on taxes each year.
If you're looking to improve your company's
accounting processes, you might consider
working with a professional accounting firm.
Try to find a firm that specializes in bookkeeping, accounts payable management, tax
preparation and other financial services for
pest control businesses. ●
Want to learn more about how to boost profitability for your pest management business? Don't
miss Daniel Gordon's thought leadership session
at PestWorld 2017 in Baltimore this October!
PESTWORLD > JULY | AUGUST 2017

| 15


http://www.thevaleriefund.org

Table of Contents for the Digital Edition of PestWorld - July/August 2017

Cultivating Confidence
Boost Your Bottom Line
Staffing Challenges as a Pest Management Business Grows
Brown Marmorated Stink Bugs
How to Fire an Employee Legally and Fairly
President’s Message
Standards: Calibrating Your Business Operations
PestWorld - July/August 2017 - Intro
PestWorld - July/August 2017 - 1
PestWorld - July/August 2017 - 2
PestWorld - July/August 2017 - 3
PestWorld - July/August 2017 - 4
PestWorld - July/August 2017 - 5
PestWorld - July/August 2017 - 6
PestWorld - July/August 2017 - 7
PestWorld - July/August 2017 - President’s Message
PestWorld - July/August 2017 - 9
PestWorld - July/August 2017 - Cultivating Confidence
PestWorld - July/August 2017 - 11
PestWorld - July/August 2017 - 12
PestWorld - July/August 2017 - 13
PestWorld - July/August 2017 - Boost Your Bottom Line
PestWorld - July/August 2017 - 15
PestWorld - July/August 2017 - Staffing Challenges as a Pest Management Business Grows
PestWorld - July/August 2017 - 17
PestWorld - July/August 2017 - 18
PestWorld - July/August 2017 - 19
PestWorld - July/August 2017 - Brown Marmorated Stink Bugs
PestWorld - July/August 2017 - 21
PestWorld - July/August 2017 - 22
PestWorld - July/August 2017 - 23
PestWorld - July/August 2017 - Standards: Calibrating Your Business Operations
PestWorld - July/August 2017 - 25
PestWorld - July/August 2017 - 26
PestWorld - July/August 2017 - 27
PestWorld - July/August 2017 - How to Fire an Employee Legally and Fairly
PestWorld - July/August 2017 - 29
PestWorld - July/August 2017 - 30
PestWorld - July/August 2017 - 31
PestWorld - July/August 2017 - 32
PestWorld - July/August 2017 - 33
PestWorld - July/August 2017 - 34
PestWorld - July/August 2017 - 35
PestWorld - July/August 2017 - 36
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