Year 2

Delegation is the process of distributing and entrusting work to another person.

Many people want to delegate but they forget or simply do not realize that delegation cannot be done without trust. If there is no trust in the relationship, the manager will micromanage his subordinate and no delegation will occur.

Hiring

It’s hard to trust someone else with your baby. 12 months after opening we were ready to hire a few helping hands to jump start our growth. We didn’t know a thing about hiring so I posted on my personal social media channels and had a couple friends refer a few people.

We were looking to hire a full time office person and a full time technician. We interviewed the referrals and they both interviewed well. HIRED!

Both hires quickly turned into a disaster. My biggest advice when hiring (and running your business in general) is to drop the ego. If you make a bad decision, own it and move on.

The tech that we hired started giving us problems right away. She said she needed more flexibility in the schedule so we move her hours around. The first cold day she called in and said she wasn’t going to work because she didn’t want to get sick. After a few more complaints over the next two weeks she quit. That was a blessing.

The office person we hired was one of the hardest working individuals in the area. She was in her late 50’s and had worked as a receptionist her entire life. She would work well past 5 pm catching up on things if she needed to despite my pleas for her to go home to her family. The issue with her is that she was no good at her job. She couldn’t even answer the phone and say our company name correctly.

Again, our egos got in our way and even though we could see she was not a good fit within the first week, we thought we could train her and kept her employed for 4 months. Eventually, she made a string of billing errors which cost us about $4,000 and we promptly let her go.

We went back to the drawing board and got a better hiring process. We hired a rockstar office person that had previously worked for a competitor, we hired a great, already licensed technician from another competitor, and a second technician that had been working at Sam’s club.

Pro tip: Sam’s Club and Costco are known for their great customer service. Employees at these places know how to communicate and serve customers. They are the cream of the crop.

The employee from Sam’s club has quickly risen to the top and he is now our head technician and has managerial responsibilities.

Office Space

Up until this point we had run everything out of our garage. Honestly, we could have had the office person work from home or even hire a VA and keep it super lean. We wanted an on site individual to collect mail and checks as they came in and to have a place for customers to come down if they had issues or questions.

We did a simple search online for cheap office spaces and found a small 10×12 office unit that would be perfect for chemical storage as well as Krisstina to have a desk and workspace.

We paid $250 a month plus our share of utilities. This step made us feel a lot more serious and gave customers the impression that we were a real company. We exploded this year.

Sales

With Kyle and I a bit more free to focus on growth rather than spraying homes, we got busy selling. We recruited 4 sales reps this year.

1. The first quit right away before he got his first sale

2. The second got 6 sales then his family moved to Florida

3. The third was a friend that had sold with me previously at our last company. He was also training to make the USA National track team so he only knocked part time for a few weeks and got 21 sales.

4. The last kid worked all summer for a national competitor in Indiana. When he moved home in august he worked for us for a few weeks and he also sold about 20 accounts.

That not much when your small, every dollar in revenue counts. there are also hidden benefits to door to door. Even if they aren’t generating sales, they are helping build out brand and people are aware of us. Some of these people call in later during the summer. The few sales they do get often refer friends and neighbors and the flywheel grows. Every sale they get puts our truck in that neighborhood. That allows us to plant a mobile billboard on that neighborhood for a few hours.

Kyle and I had to carry the rest of the load. I had 305 sales and he ended the summer with 271. We finished the year with about 1100 active, recurring customers. That put us on pace to do $500k in revenue over the next 12 months.

Retention

There’s no point in making sales if your customers are going to cancel within the first year anyway. The goal of a company is to extend lifetime value of every customer and keep them coming back forever.

Door to door companies generally struggle with attrition. A high pressure sale will convert at a much higher rate than just waiting for your phone to ring but these customers will often feel buyers remorse and want out of their contract as soon as they can.

Our cancellation rate is also far below the industry average. Every D2D company will say the industry average is a 10% churn rate but when they post numbers online the average is closer to 25%. We even looked into buying a company that had a 34% churn rate. Yikes!

We have averaged 8.99% churn rate over the last 3 years. Mainly what we do differently is this:

• Ethical sales - we don’t tell lies. We miss out on sales by telling the truth and that’s fine

• Appropriate pricing - we don’t take advantage of unsuspecting people and charge them more than we should

• An excellent service - we simply do what we say we will

To wrap up the year we had 3 employees, 2 company vehicles, and over 1000 customers. Things were starting to come together.

With all the growth and added expenses, margins took a hit but we still came in at just over 50% net margins. Can’t beat pest control.

News in the industry: Pest World 2024 is coming up!

October 22-25 in Denver CO