The dos and don’ts of acquiring a route

Jerry Schappert, ACE

There’s nothing quite like the growth of acquiring a route. You’re sitting there one day making the deal and the next, your business is now $50,000 to $100,000 stronger overnight.

Not all routes are created equal, of course. I’ve purchased a book of business for as low as $6,000. But over the years, this has been my No. 1 way to accelerate my growth and I continue to look every day to acquire more.

In this column, I’m only speaking about a one- or two-person deal. Please don’t take any of the following dos and don’ts as legal or financial advice; they are only observations I’ve made. I hope my tips help you and perhaps give you a starting point.

Dos

• Watch my video on acquisitions. You can view it in my Facebook group PestCemetery.com. I spend more than an hour going through every possible question I’ve been asked or that I had myself over the years.
• Put the word out that you’re looking. This includes with your distributor, your friendly competitors and even a broker. Most states have online lists of licensed companies; this can be a great place to search for a good fit. Simply search for those companies with either one or two employees listed, and that will be your target. A well-crafted short introductory letter explaining who you are and what your values are regarding treating folks like family may just hit the bullseye. I made two acquisitions this way.
• Figure out your finances ahead of time. These small operators are likely not looking for terms; they just want cash in hand. Be ready to move quickly.
• Create a “golden ticket” — aka an announcement for their customers. I have done this with each of my acquisitions and it has worked well. Once the deal is made, take a nice picture of you and the seller next to his or her service vehicle. Then create a very succinct, open letter introducing your company to customers with this picture at the top, and mail it. This will almost always get you or your technician in the door so you’ll have every fighting chance to prove you’re not a monster, and that their service will just continue (if not improve) with what they’ve had for years.

Don’ts

• When negotiating, don’t compare your companies or tell them about all the changes you’re going to make. The owners have likely spent years on their routes and are proud of it. You’d be surprised at how many things I’ve adopted that I’ve learned from these folks.
• Don’t make dramatic changes overnight. Sure, their prices may be low, their service not quite as detailed as yours, etc. But take a little time to let your service shine. People know when they’re getting a higher quality service, but actions speak louder than words ever could.
• Don’t be afraid to walk away from a deal. The reasons could be many, but sometimes it’s for the best. I’ve walked away from far more than I’ve completed. Even once all the “dos” had been done and it looked semi-feasible, I trusted myself to keep this very important “don’t” in mind.

The Pest Cemetery Crew

“I would personally meet or call each of the new customers to introduce myself, letting them know we would continue the level of service to which they were accustomed.”
— Justin Bahr, Co-owner, Central Termite & Pest Control, Odessa, Fla.

“Be respectful. Remember that while this may be a small business to you, it meant everything to the person you are buying it from.”
— Dale Czech, Owner, Quality Pest Solutions, Oak Creek, Wis.

“Try to keep things as easy as you can for the new customers: No crazy changes, no immediate price hikes, no schedule changes.”
— Harry Davis, Owner, Ozone Pest Control, Queen Creek, Ariz.

“Emphasize that the company is simply changing from one family to another; there will be no difference — or loss — in reputation and professionalism.”
— Kate Stephens, Owner, Bug Lady Pest Control, Council Bluffs, Iowa