How to Start a Pest Control Business
The pest control industry is a promising, growing industry that offers plenty of opportunities for entrepreneurs. If you enjoy helping people, solving problems, and have great attention to detail, then a career in the pest control industry might be right for you. When you start your own pest control business, you’ll be in charge of everything from your marketing to your scheduling, and you’ll probably encounter all sorts of different pest problems that require some creativity to find a solution.
Pest management is a broad field, and pest control businesses may specialize in certain types of pests or use certain treatment and prevention methods such as poison or natural baits. Some businesses also cater to commercial businesses needing pest control, while other businesses market to residential needs.
Pest management may address all sorts of animals, including bed bugs, ants, termites, rats, mice, roaches, spiders, and more. According to the National Pest Management Association, infestations can compromise a building’s structural integrity and overall safety. Pest control also helps to protect the food supply and the health of the public.
Running a pest control business is tough work, mainly because of the working conditions. Pests are often in hard-to-reach areas like crawlspaces and attics, and you may need to access those spaces in the hot summer or cold winter. This job can have health implications, too, if you inadvertently bring pests home with you, such as when treating pests like bed bugs. Comprehensive training and precautions can help to prevent this.
While many entrepreneurs may choose to start their own pest control businesses, large existing pest control companies offer franchise opportunities that can streamline the process a bit.
The pest control industry has undergone recent growth in the United States. From 2014 to 2019, the industry experienced 4.3 percent annual growth, according to IBIS World. During that time, the number of pest control businesses grew to 27,410, and industry employment also increased to 134,291. In 2019, the industry was expected to bring in $16 billion in revenue.
This significant growth is partially due to the increased prevalence of bed bugs in the country and the corresponding need for prevention and extermination services. Bed bugs are typically found in hotels, but as their numbers spread, they were found in unusual locations such as in offices, clothing stores, and movie theaters. This increased commercial need, paired with the ongoing residential need for pest control services, created a boost in the industry’s demand and profits.
Workwave predicts that a number of trends will continue to shape the pest control industry. Bundling services has become a wise business decision since it can increase a business’s profits while still allowing customers to choose the appropriate level of services for their needs. With bundled services, a la carte payments and choices are eliminated, allowing technicians to perform multiple services on one visit, increasing efficiency.
With the many advancements in technology that make communication even easier, pest control companies will need to take advantage of these opportunities. With text, email, and social media all readily available, companies can leverage these communication options to improve the customer experience. By showing that they truly value their customers and go above and beyond to communicate, businesses can gain recurring customers and potentially referrals, too.
Recently, the pest control industry has also seen many consolidations where larger companies buy smaller businesses. This trend is unlikely to slow down, as over 30 high-profile acquisitions took place in 2018 alone. This means that the market is hot, and smaller companies may have acquisition and merger opportunities. Alternatively, small companies can set themselves apart from larger companies and use their small size as a marketing advantage.
Typically, pest control businesses market to either a residential or a commercial customer base, though some businesses market to both audiences. Property owners are usually the primary audience, with specific markets comprising hotel owners, store owners, homeowners, and rental property owners.
Checklist for Starting a Pest Control Business
If you’re thinking about starting your own pest control business, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your business should be to write a business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 3: Form a Business Entity
A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a pest control business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is that the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Select your Location
Since pest control businesses perform their service at the customer’s location, a high-visibility location isn’t required. Many pest control businesses will operate out of a warehouse or garage, which reduces operational costs. A location along a busy road may still be beneficial as it provides visibility to passing vehicles.
Related: Choosing a business location
Step 5: Register for Business Licenses and Permits
To operate a pest control business in most states, you will need an exterminator license. According to Career Trend, the procedures, requirements, and fees to get this license will vary from state to state, so it’s best to check with your state’s governing body to understand the certification requirements. In most cases, you’ll need to take a pesticide application course, then sign up for and pass the state’s examination. Once you’ve passed the examination, you’ll fill out an application and pay a fee for your license.
A pest control business owner also needs to attain any general business licenses or permits required by their town and state, such as a sales tax permit, Employer Identification Number, and Occupancy Permit.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a pest control business is another. Funding to start a pest control business can be difficult. To get a loan, the borrower(s) will need to have good credit and personally invest 15-25% towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the business’s income and expenses.
Step 8: Get your Marketing Plan in Place
The good news is that many customers become recurring pest control customers, but a business still needs to market in order to bring in new customers. Pest control businesses use a variety of marketing techniques, including online advertising, print advertising, radio advertising, and direct mailers or flyers.
Step 9: Get Business Insurance
Pest control businesses need a number of insurance policies for full coverage:
– Commercial liability insurance protects the business if a customer is ever injured by the result of an employee’s actions or because of the business’ pest control treatments.
– Commercial property insurance covers the cost of equipment that could be lost or damaged in a fire or another event.
Worker’s compensation insurance covers expenses like lost wages or medical bills if an employee is ever injured while working.
– Commercial auto insurance protects the business’ vehicles used for business use, offering coverage in case of an accident.
Some states also require the business to be bonded and carry a specific amount of liability, property damage, and bodily injury insurance.
The costs of insurance coverage will vary based on the business’ location, the value of its equipment, and even the number of employees on staff. To get the best idea of what insurance will cost, request quotes from multiple insurance providers. Compare the quotes, paying attention to factors like premiums, deductibles, and coverage limits and exclusions.
Step 10: Hire Employees
Depending on the size of a pest control business, one or more additional employees may be needed. Indeed states that pest control technicians make an average salary of $39,292 per year. Salaries often represent the largest operational cost for a pest control business. When hiring employees, remember not only to budget for salaries but also for additional expenses such as workers comp insurance, health insurance contributions, unemployment insurance, and paid time off.
Before hiring, be sure to check potential employees driving records as they are driving expensive company vehicles. Criminal background checks are also recommended as this could bring liability to your business as they will be going into customers’ homes and businesses.
Proper training of employees for not only applying treatments is important, but also on the softer skills as they are the face of your company when they walk into the door of your customer’s home or business. Professional employees will be the determining factor for whether customers renew their contracts.
Proper chemical handling knowledge and protocols are essential not just to your client’s safety but to yours as well. Be sure that you always follow local regulations for the storage, handling, and transportation of the chemicals you use and have a cleanup protocol for spills.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start a pest control business?
Plan to invest some significant money upfront in starting a pest control business. A vehicle, chemicals, and supplies are required, and these expenses will double or triple for businesses with multiple vehicles and employees or teams. Plan to spend at least $40,000 per vehicle and supplies.
Common startup costs include:
– Vehicle (truck or van)
– Pest control chemicals
– Equipment, including sprayers, cages, and traps
– Safety equipment such as respirators, gloves, boots, shield, etc.
How much can a pest control business owner make?
A pest control business’s profitability will depend on its location, profit margin, the amount of business it does, and competition. Entrepreneur.com reports that pest control business profits can exceed $75,000 per year. Remember that the number of vehicles and employees in the operation can also affect your profits and overall income.
Are there grants to start a pest control business?
It’s extremely rare to find a grant to start a pest control business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.
What skills are needed to run a pest control business?
You won’t need a business degree to start a pest control business, but certain skills and experiences can contribute to your chances of success.
Pest control experience. The more experience that a business owner has in pest control, the better. Apprenticing under or working with a professional pest control company will provide a business owner with valuable skills and knowledge to apply in their own business. Experience in pest control and knowledge of the chemicals used can also increase a business owner’s chances of passing the exam required for a pest control license.
Attention to detail. Identifying pest issues and finding the best control strategy is all about details, and when handling chemicals, absolute attention to detail is necessary for an effective yet safe application.
Customer service skills. From answering the phone to presenting a professional demeanor during a service appointment, a pest control business owner needs strong customer service skills. Good customer service will contribute to the business’s reputation, making this skill particularly important.
Sales skills. A pest control business owner who has some sales experience can increase the business’ profits by upselling services, such as by encouraging customers to sign up for a multi-month maintenance plan.
Management experience. If a business hires employees, the owner should have some management experience in areas like conducting interviews, training, and managing staff.
Physical stamina. Pest control is a physically demanding job and may require climbing, kneeling, crawling, and more. An owner will need good physical stamina to get through multiple appointments each day.
National Pest Management Association