To borrow a line from the recently freed Britney Spears: “Oops… I did it again!”
I bought another building.
Four years ago, we outgrew a rental property in Lakemoor, Ill., so we purchased an 8,000-square-foot building for our trucks and 12 employees. Fast-forward 48 months, with nearly three times as many employees, and we outgrew another building. Therefore, I started looking for a place to house my corporate team and free up some much-needed space in our McHenry, Ill., office.
ROOM TO GROW
Because we grow our company at a 25 percent clip year after year, I am anticipating adding at least eight additional employees this year: six techs, one office staffer and a full-time human resources person. That will push us past 40 employees. We could never comfortably fit that many people into our current location, so last summer, I started looking for a solution to my overcrowding problem.
In October, we almost bought at an auction a 12,000-square-foot building on two acres. It was a gorgeous building, and it was cheap: It sold for $179,000. But the thought of renovating and maintaining a building that big was intimidating. Also, I love my current building, and I didn’t want to transfer my entire staff to another structure. Therefore, I compromised and bought a smaller, 2,600-square-foot building to use for our corporate team, and I will leave most of our other staff members at our current location.
There is an interesting problem in American business right now, and I’m not talking about my disastrous decision to buy Digital World Acquisition Corp. stock. According to a Gallup News poll, 25 percent of the American workforce is still working from home full-time, and another
20 percent are only coming into the office part-time. Thus, commercial real estate isn’t in demand and is much easier to get than residential properties. With fewer people renting commercial buildings, owners are forced to sell — but not at the prices they want. I used this to my advantage and snagged a decent property for $30,000 less than the asking price.
If you haven’t bought a building before, there are several factors to consider, including:
- Location, location, location. While it’s true that we don’t have a lot of foot traffic in pest control, it still is beneficial to be in a high-profile spot. Our current location nabs us 30,000 vehicles per day at the corner of Highway 120 and Route 31. Our new location will garner us another 20,000 passersby every day on Highway 120. That’s a lot of people seeing a big, beautiful Schopen Pest Solutions sign!
- Initial deposit. In most cases, you need to put down at least 20 percent toward the purchase price. For my new building, I needed a $47,000 cashier’s check at closing.
- Building inspection. Just like a home inspection, you need to hire a professional to look at the structure and find the “warts” and hidden issues that could potentially cause problems. When my inspector looked at the building, he was concerned about the roof. We currently are saving up the $15,000 to $20,000 that a new roof will cost.
- Improvements and renovations. When I bought our first building, an abandoned grocery store, I knew it was going to be a large undertaking. I bought the building for $250,000, but we completely gutted the structure. Renovations cost us another $269,000. I took out a Small Business Association loan for the building, and a second loan from my bank for the improvements.
- Neighbors and traffic. I want a high-traffic area so people see my Schopen Pest Solutions signage, but I don’t want a location where I’ll be putting my techs at risk. At my Route 31 location, it is difficult to turn left and go north. But there is a back street we use to avoid the congestion. On Highway 120, we will be sitting on a four-lane highway that has easy access going east or west.
- Commercial real estate as a solid investment. Someday, if I retire, my wife and I can keep our properties and use them for rentals. With more than 70 rental units in his portfolio, Charles Evans of Evans Pest Control in Philadelphia, Pa., is a big believer in buying property. Charles told me he has a five-year rule: “I want to get my money back within five years.” The 40-year-old pest management professional (PMP) loves to buy inexpensive properties, rent them out for a few years, and then sell them at a profit. But Charles warns investors that they need to be patient. He says, “When people invest in real estate, they’ve got to understand it is a long-term investment, and that they won’t be millionaires overnight.” He and his wife have done very well for themselves, and he encourages other PMPs to do the same thing.
As you read this, I’m working with my contractor on replacing all the flooring and light fixtures, and tearing down a wall to open up some kitchen space. We also are repainting the interior walls and doors. Within the next two to three weeks, we will install our computers, and should be able to move our corporate people over to their new digs.
If everything goes well, I won’t be singing Britney Spears. I’ll be singing Mötley Crüe: “I’m on my way, home sweet home!”
Schopen’s Open Book
Start-up: Schopen Pest Solutions Inc.
Headquarters: McHenry, Ill.
Founder: Peter F. Schopen Jr.
Start-up Date: April 11, 2006
NUMBER OF EMPLOYEES: 33 (32 full-time, 1 part-time)
2006 REVENUE: $97,235
2007 REVENUE: $172,495
2008 REVENUE: $203,732
2009 REVENUE: $243,427
2010 REVENUE: $325,960
2011 REVENUE: $425,847
2012 REVENUE: $489,887
2013 REVENUE: $572,772
2014 REVENUE: $687,326
2015 REVENUE: $858,180
2016 REVENUE: $1,079,068
2017 REVENUE: $1,478,600
2018 REVENUE: $1,877,496
2019 REVENUE: $2,095,118
2020 REVENUE: $2,398,367
2021 Revenue to Date: $3,295,259*
December Revenue: $271,115**
2021 Goal: $3,219,839***
2022 Goal: $4,119,344
*Up 28% from 2020.
**Up 53% from December 2020.
***Goal was crushed by $75,000!
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