The pest control business is an essential business that offers an essential service. Every town needs a pest control business so why not have your own? Pests will affect the lives of nearly everyone in their lifetime. Termites themselves do millions of dollars in damages in Australia alone. People need pest control.
The pest control industry has a market size of $1.3 billion. With a sizable market share, one can find themselves making good money owning a pest control business, the only question is how one can get into the industry itself. From start to finish the pest control business is a viable option for people who are interested in owning such a business.
How do I start a pest control business?
The first thing you must do when starting a pest control business is to decide how you want to start the business. Do you want to buy the business outright from an existing pest control company, do you want to open up a pest control franchise and become a franchisee, or do you want to build from the ground up?
All are great options that come with their own pros and cons. To purchase an existing pest control company, you would need to find a potential seller and make an evaluation of the company to make sure you get a good price on a profitable business. This could save you the hassle of trying to figure out how to start a pest control business from the beginning.
To start a franchise pest control store, you will need to find a franchise that fits your costs and can put you in the best position to make money. This is a great option as you can be guided through the initial process and also have a support system as you operate the business.
Lastly, to start the business from the ground up, you would need to understand the necessary steps and tools needed to complete the process. Costs to get the business going could be potentially cheaper with this option, but, more work is required.
How much does it cost to start a pest control business?
There are a variety of factors to consider when starting a pest control business. One needs to consider the location of the facility, whether it be from your home or a store location out in town somewhere. Employee costs, marketing costs to get the word out, and equipment costs to effectively do the job at hand all need to be considered.
One can estimate that startup costs can be as little as $10,000 but can go up past $50,000 depending on the scope of the business. Start-up costs are solely dependent on how much you are willing to invest in the company. As a start-up, however, whats not calculated is the time and energy spent planning out and executing the necessary steps needed to start the business. Things that you would need early to start could be:
- Getting real estate for your pest control company location or paying your lease for a few months, if you are renting
- Doing your due diligence on the market so that your pest control services take off when you open
- Making sure that your business stands out amongst the rest of the pest control businesses in the area
- Buying operating equipment
- Getting the right certifications and classes taken care of
- Making sure you adhere to local and state laws
- Making sure that your market is ready for a new pest control business, be wary of trying to squeeze out established competitors in areas like New York or New Jersey.
A franchise is another potential route that could be taken. This route can have a cost anywhere from $25,000 to $150,000 dependent on the franchise. The benefits of the franchise being that you would not have to spend that extra time planning out how to start the business. You would have the proper support to maintain and operate the business. Franchises can sometimes dictate some aspects of your business from the branding to the equipment used, so take that into account when choosing when getting your pest control business going.
The last option would be for you to potentially buy a pre-existing pest control business. If you see pest control businesses for sale in your area it might be a good option to buy one rather than starting from scratch. If there aren’t any listed you can try contacting pest control businesses of interests directly and doing market research in desirable areas. Sending a discovery email or phone call can get this moving sufficiently. Prices vary greatly, however, it is safe to assume that costs would be similar to a franchise. If this is the right option for you and you make a pest control business sale, then you are ready to start operating. This can be a great option if you find someone who has a pest control business for sale and that is wanting to get out of owning a pest control company.
How much do pest control companies make?
Revenue is going to vary from business to business. There are small and large pest control businesses. This is dependent not only on the money invested into the company but also on the overall success of the company, market size, and how often people in your area need pest control. How you start and how you operate the business will determine its success
You can hear about success stories in the news where a mother running her own pest control business builds it up into a $10 million business. You can also see Glassdoor estimating the average pest control owner to make a little over $100,000 annually.
How much you can make will depend on how you started the business. If you bought the pest control business then you should have a good idea of how much you would make looking at the previous year’s revenue.
If you were to buy a franchise they themselves would be able to accurately predict your revenue based upon the local area and data from previous stores, however, if you started up the business from the ground up it may be hard to tell exactly how much can be earned initially.
For a person to start a business from scratch and then attempt to predict revenue in that first year one must consider a few things, how many potential customers are available and their buying power, the competition of competing business in that area, and lastly your ability to attract those potential customers.
When all factors are considered and market research is done then one can accurately predict the money that can be made. This route is the hardest to predict initial revenue streams as there are no immediate references that could b used to determine the revenue.
How much is a pest control license?
First off as a potential pest control business owner would you need a license? That answer is yes. If you apply any pesticides as part of any business activity than a license is required. Obtaining a license is going to differ somewhat depending on the region your business will reside in.
While the process may vary from region to region the overall procedure will be about the same. You simply fill out the necessary application and pay the necessary fees. The fees vary somewhat but for a year-long license, you would be looking at around $300 while a 5-year license would cost around $1000.
While acquiring the license you may be required to take some courses. Once these courses are complete and the fees are paid you can receive your license and start operating your pest control business. Make sure you check with your local government to find out the necessary steps needed to acquire the license.
Wanting to put your pest control business for sale on the market?
You have completed the tasks of owning and operating a pest control business. You are satisfied with the result and are happy with the experience. Its time now to sell your business, so where should you begin?
The first thing to consider is the evaluation of the company and your selling price. The best way to value your business properly is to calculate your Sellers Discretionary Earnings. This is calculated by the adjusted expenses, non-related business expenses/income, one-time expenses, and pretax and pre-interest profits before non-cash expenses.
Once that number is obtained you want to multiply it by 4 to receive your evaluation. That being said the multiple can be changed depending on the size of the business. This can give you a good idea of the selling price of your company, but other factors can affect the price besides these things.
Active contracts, location, reputation, clientele, technology, and pest control types are all factors when deciding the cost. If the company were to have large active contracts that create a larger recurring revenue stream than the company is then considered to be more valuable. Reputation is incredibly important as people will prefer to go to a business that has better reviews.
Selling a pest control business
You have figured out the selling price of the business and now all that there is left to do is actually sell the business. The first thing that needs to be done is figuring out who to sell to. You can sell to an individual buyer, a strategic buyer, or a private equity group.
An individual is a strong option, although the higher the price tag of the business the less chance to find a potential individual buyer. The strategic buyer option is a viable option as large competitive companies are always looking to increase their market share. Lastly, private equity groups will sometimes look at businesses as investment opportunities.
Once identifying the buyer, all there is left is to sell to that potential buyer. This process is not a short process as on average it can take anywhere from 6 to 8 months to sell the company. Once the process is complete you can leave satisfied, knowing you successfully owned and sold a pest control business.
Bought and sold, the journey of a pest control business
A pest control business can be a great way to make money and taking that path while confusing as first may not be as difficult as initially expected. You can see now that though there is a multitude of factors involved with starting a pest control business, it is a doable process that can be incredibly rewarding.
The process does not end there. Once you have built up your pest control empire you also have the ability to sell it to potential buyers. Knowing what your business is worth and approaching the right people can lead you to successful gains.
While it won’t be an overnight success taking the right steps will lead you to a newfound source of income that gives rise to great potential. Do not overlook the benefit of buying and selling a pest control business.
