How much will PMPs spend on products and equipment in 2017?

PMPs are spending most of their revenue where they always have, but growth sometimes allows them to up the ante.

One telling indicator that a company is holding a good hand is the amount of money being spent on products and equipment. Growing business means a greater need for product to meet the needs of that growth. Growth might also necessitate the hiring of more employees, which translates to more chips being thrown at equipment and vehicles to accommodate the new full house.

Such is the case for Jon Paulsen, service technician supervisor of Portland, Ore.-based Pioneer Pest Management, who responded to Pest Management Professional’s (PMP’s) 2017 State of the Industry Survey.

“Our largest investments this year were the hiring of four new technicians,” Paulsen says. “The associated fleet and equipment expenses were, by far, 2016’s biggest investment.”
Paulsen sees this as part of an ongoing trend, where continual growth dictates he ante up with an expanded budget for equipment and materials purchases.

“Our budget for materials and equipment have increased consistently for the past six years, and we expect this to continue,” he says. “Between the technicians hired this year, the technicians likely to be hired next year, and the relevant expenses, we’ll need to budget accordingly.”

Dennis Mastrolia, owner of the Lynn, Mass.-based Dennis the Mennis Pest Experts, also saw steady growth as the catalyst for his company’s major 2016 investments: three new service vehicles and the related repair and maintenance costs.

Where pest-specific purchases are concerned, our survey shows that insecticides are still where the greatest amount of budgeting lands, with 93 percent of respondents revealing that’s where most of their 2016 equipment and materials dollars were spent. Those pest management professionals (PMPs) are betting on the same to be true of the year ahead, with insecticides ranking first among planned purchases for 2017.

Mastrolia says there was no significant difference in his company’s budget for materials and equipment between 2015 and 2016, although he admits he doesn’t budget for this segment so much as he makes purchases “as needed.” For 2017, he says he expects his expenses to be very similar to previous years. However, having been dealt a good hand, and the nature of some markets, it’s possible Dennis the Mennis Pest Experts will spend less on some pests in 2017, while increasing spending for others.

“This year, rodent elimination and bed bug supplies were on the increase, as well as termite materials,” Mastrolia says.
 

Bed bug concerns

Josh Alpert, president of Los Angeles-based Green Earth Pest Control, says bed bugs continue to be the pest at the center of most of his company’s purchases.

“We spent most on products to control them — particularly, liquid concentrates and dusts,” Alpert says, noting he doesn’t budget a certain percentage of funds toward materials.

Instead, Alpert buys in bulk whatever materials and supplies he uses most, which he says allows Green Earth to concentrate on serving customers the best product selection in whatever amounts are necessary to achieve desired results. This prevents Alpert from worrying about overbetting on the amount to be spent on a particular application.

“If, at the end of the year, we determine that we spent too much on materials and supplies, we increase our service fees accordingly to keep our profits in line,” Alpert says.

For planned 2017 purchases, our survey respondents list insecticides, safety equipment, uniforms, bait stations and vehicles as the Top 5 expected expenditures.

Mastrolia says he has no major purchases planned for the year ahead, but adds, “You never know!” — acknowledging that sustained growth often has a way of changing your hand.

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Betting Big in 2017
(projected equipment and materials spend: 2017 vs. 2016)

• 41% Expect to spend 10% to 24% more on equipment and materials
• 28% Expect to spend up to 9% more
• 16% Expect their spend to remain flat
• 14% Expect a spend increase of 25% or more
• 1% Expect to reduce their spend

2016 Equipment & Materials Purchases

Insecticides: 93%
Bait stations: 86%
Safety equipment and uniforms (tie): 84%
Traps: 72%
Computers: 70%
Spray guns and nozzles, backpack sprayers, dusters, vehicles & accessories (tie): 67%
Monitors: 63%
Spray pumps: 60%
Granule spreaders: 59%
Bait guns and applicators: 57%
Green pest management solutions: 54%
Spray hoses: 53%
Compressed air sprayers: 50%
Aerosol applicators, handheld devices (tie): 49%
GPS solutions: 47%
Business software: 44%
Hose reels, spray rigs (tie): 40%
Foggers: 31%
Termite bait installation tools: 28%
Foam machines: 24%
Bird/pest repellers: 22%
Trailers: 21%
Soil and tree injectors: 8%
Alternative fuel vehicles: 4%
 

2017 Planned Purchases

Insecticides: 79%
Safety equipment: 78%
Uniforms: 77%
Bait stations: 73%
Vehicles: 69%
Dusters: 62%
Traps: 61%
Monitors: 57%
Bait guns and applicators: 56%
Vehicle accessories: 55%
Backpack sprayers, computers (tie): 51%
Spray guns and nozzles (tie): 47%
Spray pumps, compressed air sprayers, granule spreaders (tie): 44%
Handheld devices: 43%
Aerosol applicators: 41%
Green pest management solutions, spray hoses (tie): 40%
GPS solutions: 36%
Hose reels: 34%
Business software: 33%
Termite bait installation tools: 30%
Spray rigs: 26%
Foggers: 24%
Bird/pest repellers: 17%
Foam machines: 16%
Trailers: 14%
Soil and tree injectors: 9%
Alternative fuel vehicles: 6%

Senior Editor Will Nepper can be reached at wnepper@northcoastmedia.net or 216-706-3775.