I was at a seminar the other day, and asked the attendees whether they ever thought about what they sell. The answers were exactly what I would expect when asking this question to a room full of pest management professionals (PMPs): “Removal of rodents or insects, a pest-free environment, peace of mind, expertise and knowhow.” These are all great answers, but they’re not items to which you can apply a standard price.
The not-so-obvious answer is that you really sell time — the time it takes to provide service that is performed to achieve all of the above results. You are selling the time it takes a trained technician to use his or her expertise to perform a service.
Doctors, lawyers, accountants and consultants sell time. So do PMPs. In fact, if you compare your business to a retail establishment that sells inventory, you can consider your technicians’ time (say, eight hours per day each day) as your inventory. Everything you can do to make sure your technicians are at a customer’s house or place of business performing service increases the amount of inventory that can be sold. If you were in a retail business, you would want to safeguard that inventory, making sure you don’t damage or discount it, as that would result in lower revenue with increased unsalable inventory (wasted time).
The bigger challenge in a service business is that your inventory (time) has a very short shelf life. If you waste a technician’s time by having him deal with equipment that is not in good repair or driving around town because of a poorly constructed route, then he is not able to sell his entire inventory — the time available to him in the day — because he has to spend unproductive time repairing equipment and racking up windshield time by driving. This time obviously is not saleable and is gone forever, just like spoiled inventory.
Unproductive time is the same as damaging inventory or having it reduced by shrinkage. Not only do you lose out on the amount of time sold, you lose money because you still have to pay wages and other expenses. Even if you pay as a percent of production, you still have to account for the costs of the truck, the office, and the opportunity to make money by performing work.
So, how much is time worth? Well, every PMP should figure out their hourly rate individually. If you need help, please visit pcobookkeepers.com/expert-advice.
Once you figure out the rate you should charge, multiply that by the number of hours each technician will spend providing service. Don’t forget to build into your calculation the average time spent on callbacks and driving. Better routing and technician training can reduce the amount of time spent on these tasks, but they can never be reduced to zero.
Time is what you sell. If you offer competent service at an acceptable rate per hour, you are sure to make a healthy profit, maximize the value of your company and build wealth.
Dan Gordon owns PCO Bookkeepers, an accounting and merger and acquisition consulting firm that caters to pest management professionals nationwide. For more information, contact him at
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