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Grow your business with service diversification

|  September 15, 2020
PHOTO: PORCOREX/ISTOCK / GETTY IMAGES PLUS/GETTY IMAGES

PHOTO: PORCOREX/ISTOCK / GETTY IMAGES PLUS/GETTY IMAGES

I took over managing the Austin, Texas, ABC Pest Control office in August 1983. We had a nice pest management company with about nine employees and revenues at about $500,000. For the next 12 years, we grew at a very healthy rate of about 16 percent per year, in a market with a population that grew to about 400,000. In 1995, our revenues in Austin had grown to about $3 million.

At about this time, I attended a conference where one of the speakers made the point that if a pest management company was doing in excess of $2 of revenue per person in the market, that company was viewed as dominant in the market and it would be difficult to outgrow the rate of growth of the market. At $3 million, with a population of 400,000, we were doing $7.50 of revenue per person in our market — way in excess of the $2 per person of a dominant company. We became concerned we would not be able to achieve our goal of 16 percent growth per year.

Our company is built around our passion for growth. It is the basis of our core values, and the thought of declining growth percentages was very concerning. We knew we had to look for alternative plans.

We thought about different ways to grow a business. One way, of course, is to sell more of what you do to more people, which to us meant we would need to expand to more geographic markets.

But another way to grow is to sell more services to the same people. This is what has become our business model.

We began with lawn care: One tech, one truck, one application of materials at a specific location to achieve desired results. We changed the name of the company from ABC Pest Control to ABC Pest & Lawn Services.

Soon after, customers began asking us to mow their lawns. After declining countless requests, we decided there must be a need for professional lawn mowing services in our market. We then quickly discovered a need for irrigation repair services — spurred by our mowers damaging irrigation equipment. From there, it was an obvious step into landscaping.

MORE OPPORTUNITIES ARISE

Several years later, we started a handyman service in the Austin market. Soon after we started, Texas passed regulations that to change a faucet, hang an electrical fan or fix air conditioning ducts — all things we thought a handyman could do — a company must have a plumbing; electrical; or heating, ventilation, and air-conditioning (HVAC)  license. We had to hire a master plumber and electrician and obtain our HVAC license. Once we had these high-level professionals on staff, we were in the plumbing, electrical and HVAC business, and we needed to drive revenue to each service line.

When we diversified to this level, it was time to change the name of the company again. We became ABC Home & Commercial Services.

We added tree trimming when the owner of a local company approached us about purchasing his business and running that division for us. We then acquired a local pool cleaning and repair company.

We recently added window cleaning and power washing, because we discovered there were very few companies providing these services. Our customers want this work done professionally. Our newest offering is installing and servicing water purification systems and water softeners for new and existing customers.

Our goal over the next couple years is to build out our service lines in all markets we serve. We currently offer all services in Austin, and provide some variation in San Antonio, Bryan/College Station and Corpus Christi.

As we look forward, we will continue to think about and explore offering additional service lines. We will listen to our customers and look for appropriate opportunities. When we think of ABC today, we don’t think of ourselves as a pest control or lawn or plumbing company. We are a service company. What we do is put a great person on the doorstep to provide the specific services the customer needs. We really believe this model gives us virtually unlimited growth potential.

Read more: 7 keys to service diversification


JENKINS, who rotates this column with his brothers Raleigh and Dennis, is president of ABC Home & Commercial Services, Austin, Texas. He can be reached at bjenkins@goanteater.com.

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