Updated: May 18
When you get right to it, it's all about taking a risk. Risk to potential buyers. If you can reduce the perceived risk of your business, you will be able to make buyers more comfortable with the idea of buying your business.
1. Service contracts
Recurring revenue is the name of the game. Predictable and consistent service or maintenance contracts are very valuable in any service business - especially if long-term contracts cover your break-even point and bring you a profit. Get more service contracts and your company will be the more valuable.
There are two ways in which geographic location can be important. What's most obvious is that different sites have different levels of competition and market size. If you are in a large market with little competition, this is good news for you. The other benefit of the site is specific to the buyer. If Orkin or Rentokil are looking to expand in your area, geographic location can be a huge bonus.
As you know, the pest control industry is the highly competitive. Therefore, your reputation has a huge impact on the value of your company. Make sure that you ask customers to review your service on Google, post some testimonials on your website, and ask customers to refer you if they are satisfied with your service.
4. Residential and commercial customers
Resident customers have always been at the heart of the pest control business, but recent increases in bed bugs in restaurants, hotels, offices and even movie theaters across the country have caused regulators to tighten restrictions. Some local governments require companies to carry out monthly or quarterly inspections (such as a health check) by exterminators. If you can secure these clients, you will reduce your dependence on the cyclical housing market.
5. Environmentally friendly pest control
It sounds ridiculous, but today's consumers are demanding the use of environmentally friendly insecticides. Kill them quietly, right? Joking aside, this appears to be the direction the industry is moving in. If you are already using eco-friendly insecticides, be sure to highlight this fact in your marketing and sales.
The service industry is brimming with software, technology, and tools to improve your services, market your products, and protect your devices. If you can successfully incorporate these changes into your business, you will look better in the eyes of the buyer.
What hurts the value of the pest control company?
1. The owner is very involved
As with any company, the more business owner involvement, the lower the value. Let's face it, if you're the only thing keeping the wheels spinning in your establishment, it's going to be hard for a buyer to step in. If you want to increase the value of your business, consider supporting yourself from the day-to-day operations.
2. Old facilities and equipment
Although pest control is not a heavy equipment industry, most businesses need branded vehicles, uniforms, office space, computers, spray equipment, and more. We do not suggest that everything must be perfect and new, but damaged and outdated equipment may affect your value.
3. Lowest prices in your market
No strategic buyer wants to buy a company with a poor profit margin. While this may help attract customers, it is best to convince customers that you are worth the extra money. This shows the strength of your company and your brand.
4. Outdated Marketing
In the digital age, your marketing efforts are more important than the ever. As mentioned before, the competition in the pest control industry is intense. To stay in the game, you have to focus on your marketing efforts. Update your website. Start asking your customers to leave Google reviews for you. Hire your nephew to wave a flag at the corner! Just make your company look great in the digital world.
5. Low number of service contracts
If you are in the pest control business with a few repeat service contracts, this is a big deal. Service contracts are the key feature to enhance the value of a pest control business. Go out to your loyal customers and start securing service contracts.
How long will my business take to sell?
51% of business owners think it will take five months. However, research suggests that it takes an average of six to eight months, depending on a number of factors.
One of the most important factors is size - the larger your business, the smaller your pool of qualified buyers, and the more likely the buyer will ask for a longer period of due diligence.
Are You Ready To Take Your Pest Control License? https://youtu.be/xLFGXuxJvo0