Stephen Vantassel here wildlife control consultant bringing you another podcast here about doing wildlife control as part of your pest control business. Wanted to talk today about pricing. This is one of the most difficult elements for people getting involved in wildlife control. And I also think in terms of business in general particularly when you’re in a service business what do you charge and how do you price yourselves that you’re not out of the market but that you make sure you’re not hurting yourself in the long run because one of the things that a lot of people who are starting a business or don’t understand is that.
Running Pest Control Wildlife Business Is Expensive
How expensive it is to run a business. A lot of people think oh you’re a business owner you’re making all this money and people really don’t understand until they do it. How much it cost to run a company that’s legitimate. I mean there’s a lot of illegitimate companies out there that want things on the table. I’m talking about a legitimate company where you are abiding by the laws and regulations of the land and. Paying your taxes.
All right so let’s talk about how do you go about structuring your pricing schedule so let me give you some principles here and how to move forward with this. Number one you need to kind of figure out what you think you’re worth on an hourly basis. So if you think you’re worth twenty five dollars an hour then you’re going to be earning a 40 hour week basis 50 weeks a year you’re going to be making around 50000 dollars a year. But understand that that’s a that’s your hourly rage after taxes and expenses not how much you need to charge.
So the rule of thumb that I give people when you factor in. Your your benefits your retirement your you know your insurances you’re going to need to be charging a lot more than that.
My rule of thumb is 50 percent 50 percent more. So you would need to charge at a rate of around 50 dollars an hour to achieve a twenty five dollar an hour rate because there’s if there’s some overhead involved. So when you’re when your employer pays you twenty five dollars an hour or 15 dollars an hour or whatever it is.Understand it it’s costing your employer social security tax yes to pay half of that.
He has to pay for the liability insurance for you he has to pay. Sometimes you pay for licenses you have to pay for equipment advertising costs yada yada yada all that all that ultimately is paid by you. You just don’t think it’s paid by you because you just see your salary. But he’s actually built in building all that in to his pricing of the customers. You have to do the same thing.
So again the rule of thumb and you can tweak this a little bit more when you start getting to more competitive areas. But your rule of thumb should be whatever hourly rate you want to make double it.
And that’s what you need to kind of. Your operating charge for a customer. So that’s all that gives us an hourly rate. The problem is when we’re in the service business people really get scared when you charge an hourly rate it’s not like hiring a plumber. People want to get a price of what it’s going to cost because they don’t they don’t want to be paying forever.
So how do you do that. So here’s what you have to do. Once you have an idea of what your hourly rate is going to be you then need to calculate how long does it take you to do the job. Now when you’re starting out it’s like you don’t have any numbers to work with. Right. You have to figure out what’s really taking you to do this job. So what you want to do is you want to get into your truck drive up to your house and then as soon as you park the vehicle started start a timer.
There’s a lot of apps on you can use your if you have a cell phone there’s an app on that where you can just simply do a timer and start timing yourself that when you get out of the vehicle then you want to go through the process of filling out the paperwork. How would you start filling out the paperwork for the job you come out of your vehicle. You pull the ladder off the truck you’re timing yourself in all of this do it on your own house and then time is up. What is it going to take for you to pull that ladder off.
Throw it up on the roof do it and do a thorough inspection of that particular property. Just sort of give yourself an animal let’s say all right it’s going to be I’m doing squirrels or so. OK. Squirrels can be a little time intensive. Because you often have ladder work involved with squirrels so start with squirrels throwing that ladder up.
How long is it going to take you now to go grab the traps out of the back of your vehicle put the traps up appropriately on the house and do it. I would encourage you to do it. You don’t have to screw everything down. You can fudge things a little bit but you want to get a very clear idea of how much time you need to spend on scene to do the job. Right and then take your ladder down put it back onto the truck fill out your paperwork. Consider how long you would typically be talking with a client. And I want to caution you here you’re often talking with the client longer than you think because you may be done with your job and your client just wants to chat and talk about the squirrel that they caught that their uncle dealt with 20 years ago and what a fiasco it was or maybe he shot it or whatever the case may be or they’re complaining about how much you’re charging. Who knows. Me people just like to yak before they write the check. But you need to compensate for that. I would give you. I would suggest at least 15 minutes is what you should probably think about how long it’s taking you with the client on scene understanding it maybe more and then you have to factor in did you need to go into the attic.
Now notice I didn’t mention that because generally speaking I don’t recommend wildlife control operators doing work from inside the structure. However there are cases when you weren’t able to identify where that opening is on the House from the outside of the structure that you have to sometimes go inside the structure in order to check the check the attic or certain crawl spaces to see where that entry point is. I like working on the outside of the building simply because you don’t have to rely on the customer being home to access your traps. But that’s still you still need to compensate yourself. For those types of situations. You’re not going to be that often but you want to think about 10 percent of the time you’re going to need to go into that attic and if you’re in a part of the country where that’s expected of you or some people don’t think you’ve done your job unless you’ve inspected the attic then you’re going to need to make sure you compensate for that as well and including cleanup. All right. So now you have that time on scene but you’re still not done.
So I would encourage you get a little spreadsheet or a long piece of paper and you’d want to start type putting some different columns in you know what your hourly rate is. And then of course then time on scene for squirrel job initial setup.
How much time is that going to be think about then you want to think about the cost of getting your materials like contracts what’s it going to cost you to get a contract What’s that contract and the costs for that client. I used to use contracts that had they were sort of carbon less paper. What’s it going to cost you to get that. This is where you need to call your printing company and say All right what’s it cost to print 500 contracts with a carbon list paper and then you’d say OK so whatever let’s say the cost is only five dollars. Well then seventy five dollars divided by five hundred gives you a price for that particular contract. And so you want to kind of break it down the more precise you are the better you’re going to be able to determine what your pricing structure is so that you’re not losing money at the end of the day now. So you have to factor that in. What’s a business card going to cost you. All right you can hand a client your client a business card and you have to think about your telephone. You have a business line. What’s that going to cost you on a monthly basis. You need to think about having if you have a P.O. box with second to be costing now you say well how do I itemize that for a particular client. Well you have to kind of say. You know estimate how many clients you think you’re going to have in your first year if you have or if you have a little bit of a track record you divide that out.
So each client is paying a piece of all that. Right. So this can get quite detailed and I understand a lot of you know a lot of people are while out of control or not detail people. But you want to crunch those numbers so you have a real accurate notion so you think about those types of costs. Now on the bigger side of things you need to be thinking about all right. How long is it going to take me. What’s going to be my service area wildlife control work is incredibly time intensive. You have to be paid for your windshield time in so you want to try to have an idea of what you’re working area. My rule of thumb that I tell people in the business is generally speaking half an hour radius from your home base wherever that home base is. Take get a map out and calculate how long does it take you to get from point A to your home base out to 30 30 minutes where can you get in 30 minutes assumes busy traffic whatever your traffic is on a normal basis. That’s where your 30 minute limit is. And then you draw that circle around that area or if it’s a circle or if it’s a strange polygon or whatever the case may be you’d have an idea of how you’re calculating that out marking it down.
That is your prime service area. So now half an hour at so you’re half an hour drive time has to be calculated into that initial that initial visit. And actually it’s an hour right because it’s a half an hour out half an hour back. You can say well you may be doing other jobs out there. Well that’s fine. But you still need to be thinking about you. You won’t always have that. So you’re calculating how much is taught Thomas that time is now how many miles is that. So how are you calculating the cost of your vehicle. Now when you start getting higher into your business it’s going to be wise for you to do actual cost for your truck. So you’d have a designated business truck that you would do actual cost however where you’re starting or as a rule of thumb for how to compensate for calculating purposes you need to rely on what the federal government allows you to deduct for mileage this year and 2018. If memory serves it’s fifty four and a half cents a mile. So in ten miles you’re able to do five dollars and forty five cents. Now understand that number that the government gives you for a deduction on your tax and your income taxes for business expenses. That number is designed to cover the cost of your fuel cost of your maintenance cost of your insurance in the cost of replacement of your vehicle. So a lot of people get really caught up in the early parts of their business because they donate their truck that they’ve already paid for to the business and then they think wow I’m making all this money and they forget that’s not all profit because they forgot about the amount of money that they were supposed to be putting aside to replace the equipment the capital expense of their equipment.
So you have to be sure when you’re when you’re seeing that money you’re taking out to take for your fuel for your vehicle expenses. Some of that is for capital, capital replacements because you’re going to need money to replace that truck your truck wears out over time. Now trucks today are certainly lasting longer than they were back in the 70s. But the reality is you still need to be having a fund because when you get when that truck finally meets the meets its maker you’ve got to have a way of financially replacing that otherwise you’re stuck. So a lot of people get caught out because they spend that money initially and they’re like hey you know I’m all I’m cool I’ve got all this money but they forgot that they’re just getting the money back for the initial investment of their truck and they forgot about what it takes to replace it. All right. So then you would calculate that in and then there’s one more thing at least one more thing that you need to compensate for and that is the amount of time you need to spend with that client selling the job initially. Now that’s got to be part of your initial cost as well.
So that’s going to go into your time element because you need to be compensated for that time that you’re talking to clients. So. So this is why many people and wildlife control charge an initial consultation fee to go out. In other words to to show up at someone’s house
Is a hundred and forty nine ninety nine hundred and seventy nine ninety nine hundred ninety nine dollars whatever the case may be because it’s covering all the costs of being by the phone driving to the location doing the inspection filling things out before they even set a trap.
Free wildlife inspections are sort of anathema.
That’s sort of a theological word mean they’re a curse. People don’t do that. There are some. I’m not saying that there aren’t. But as a general rule wildlife control operators don’t like to do free inspections. Typically when wildlife control operators do free inspections they must. In an extraordinarily high competitive environment or I suspect that they are pest control operators who are dabbling in some wildlife control and they’re using the pest control work to subsidize the wildlife control and they’re using the wildlife control work as a lead Gainer to get into what they really want to do which is a quarterly service for pest control. My suspicion. And then lastly or they are doing it in situations where they can’t have it where they can’t quote a price over the phone. So typically wildlife control operators standardize their fees for the common problems for example when they’re doing something like a squirrel job in a house or a skunk job underneath deck. Those are you know it’s the same thing different place however when we’re doing something like a bird job bird exclusion those are far more complex because there’s a lot there’s different ways to do the work. And oftentimes companies they’re asking for that type of board work they’re looking for a bid or quote and so they’re not going to pay for that. But those also tend to be high dollar type jobs. And so that’s one one area where the consultation is going to be
All right. So that takes care of that initial. Inspection period that your initial contact the client on the job. Let’s go to the second element of pricing. What do you charge or how do you charge for the second aspect. There’s basically two models in wildlife control. There is the flat rate fee where you charge the client a flat rate to solve the problem of a squirrel Squirrel neurotic or the other option is people charge a setup fee or an initial visit fee and then they charge a per visit fee after that which would be some charge on the basis of per animal. Some people charge on the basis of the visit. That is where you need to calculate what that is. So typically it’s a lot less expensive to do. The follow up visits because again you’ve already done your inspection you’re spending less time. It’s often just grab the trap replace the trap put it remove the animal put a fresh trap in whatever the case may be. So you have to figure out what your business model is in that regard. It’s a little it’s a little tricky. When I first started writing my business back in Massachusetts I was charging an initial set of fee followed with a per animal feed. It worked not as good as it could be. I mean hindsight’s 20 20 I wish I have done some things definitely when I sold my company the guy I worked for he charged a flat rate fee because we did a lot more repairs and exclusion which is sort of a one way door system.
So he wanted to get. So he was charging clients we would screen their vents and do a lot more hardening of the building because when we excluded the squirrels we didn’t want them being able to chew back into the structure. So he thought he would rather spend a lot of time on one site rather than driving around from spot to spot to spot. You have to figure out what you want to do and what you’re comfortable with. Are you wanting to just get a body count or are you looking to sort of solve that person’s problem in a very permanent way in terms of your pricing. So what are some numbers. Typically you’re looking at if you’re charging a flat rate you may be well into the into several hundred dollars for five hundred dollars flat rate and doesn’t matter whether the person has one squirrel or five hundred squirrels you’re there till the problem is solved. And then the next other person he’s charging only on the basis of. Either a per animal or some people say doesn’t matter how many animals I catch if I visit your property come back again it’s a per visit call flat rate so a baby seventy nine dollars ninety nine dollars to visit if I have three squirrels that it’s ninety nine dollars.
Other people are like no it’s I get paid a fee plus whatever the animals are or they charge a per animal fee. Now the problem with the periodical fee obviously is there’s no money gained when you come back to remove your traps which is the other aspect to that initial consultation you have to remember if you sell the job one of your visits you have to come and you set traps. The last time you come you’re going to have empty equipment as a general rule so you have to make sure you’re compensated for the time it’s going to take you to come back and grab your equipment so you can see how this is a little bit complicated sometimes you’re going to win sums and there’s going to lose some. The key is is you want the vast majority of your time winning something. So you want to be sure you think about what that’s how many visits you’re looking at. So this is where you need to understand how many animals you’re going to be capturing. So for rec raccoons are you dealing with a lone boar raccoon it may be over a garage attic or you’re dealing with a female with young.
So generally raccoons have three to five young. So are they going to be mature enough for you to trap them individually or you’re going to have to go up into that and it can remove remove them by hand. What are you going to charge to cut them out of the ceiling if you can’t get at them or are you going to have to wait. Till they’re mature enough so they can move or you were mature enough where you can trap them. Is your client going to wait for that squirrels. Same thing. Are you going to wait until the pinkies are going to be big enough to move or are you going to trap them also how many squirrels could she have she could have anywhere from three to five. What happens if you’re catching if you’re in the mating season and you’re catching a lot of males coming in because you’re not using positive sets. I talked about past positive sets last week. So this is where it gets complicated but you want to think long and hard about your pricing schedule too often people get into this business and what they do is a call around to their competition and they just try to mirror their price.
That can work. Kind of the problem is is that you your costs may be higher than your competitors cost because maybe they have their house paid for.
Maybe they’ve they have a lower expenses because maybe their spouse is working at a great job and they don’t have to pay for health insurance. So you want to be careful of just simply mirroring your competition because one as one man said I don’t want to be the low cost person I want the low I don’t want those jobs. So you have to decide whether you what you need to earn to make a go of it is regardless of what someone else is charging because you may have to look at it and say you know what. I can’t compete with these other people. I may need to not do this type of work or you may decide you know what ladder work is too expensive for it in my area. I can’t really compete with those people. I need to make a higher rate of return. I’m just going to do the ground animals. So it may be better for you as a business owner to be turfing off certain wildlife control activities to your to another company and maybe get a commission on that maybe get a finder’s fee on that. So don’t think you have to go in and do everything you have to decide what is making you making you money and too often I talk to people who are trying to make a go of it in their wildlife control business and they would do better working at McDonald’s. And the only reason they’re not working at McDonald’s is because their ego won’t let them. And I think that’s unfortunate because thankfully those days are past us but in the earlier years of this industry there were guys who were working we call I said How are you doing there I’m working 24/7 365 a year. And then I would I would finally I’m hearing this so often and I would stop them and then I would say that’s great. Are you making any money.
And they would pause and I would look at them and I would say you’re not sure and so the point was is that you want to be sure you’re making money.
You don’t want to just sort of guess at it. You don’t want to have the end of the tax year and all of a sudden you’re like Oh my God. I don’t have the money to pay my taxes because I was burning it all up in expenses. And I have no money left over for taxes because I was buying. I was I was spending it on myself for I didn’t I didn’t put enough aside and I didn’t do good accounting and so I couldn’t justify my expenses. Well you finally just broke. You don’t want to be that person just because your ego won’t allow you to see you want to think make sure you’re thinking strategically about your business. So let’s go over that a little bit more and let’s focus against. You want to find out what your home ranges. I call that you know that half an hour distance between radius from yours from your location. You can go farther. You just got to make sure you compensate for those other distances and so I would I would look at the map and say I would say what communities what community is in that half hour range. And so what do you need to charge for that and get a kind of an average of what it takes to get out there.
And then look at the communities that are farther away. OK. What’s your service call fee going to be for out there. You want to try to keep your pricing schedule simplified because you’ll have people calling you up asking for prices and you want to be able to give them a number. And if you’re doing an inspection and you’re charging for it give them a real inspection.
Give them a report about the condition of their property so let them know that you’re not just coming out there and trying to quote unquote sell them something although you are you’re giving them value for that particular visit you’re telling them what is wrong with their place. Does the chin need to be capped. Are there vents that need to be screened. Are there weak spots that need to be secured to prevent wildlife damage in the future. This is where we’re a little bit different from Pest Control. I’m glad to know that a lot of pest control guys are getting into more preventive type stuff but insects are a lot more difficult to sort of build out in many cases because their adaptability and some it with wildlife people really can if they follow our directions they will.
They will never have another problem with wildlife in their building in their lifetime. That is that is eminently possible. And oftentimes when people have another problem it’s because they’re either made a change in the structure of their house or they didn’t take your advice and had certain things done on their property.
So that’s not the case for pest control because insects can be brought in in a variety of different ways. If you’re doing with high food areas and windows are open in flies and other types of things and cockroaches and those. But when it comes to wildlife and I’m not talking about mice here per same time. One things bigger than mice.
Mice are different or different side of things but for things larger than mice you can have a wildlife control free home for like ever for over four decades. Let’s put it that way. So you know when you give them that inspection you’re telling them what’s wrong with that particular building and what’s what. So what could be wrong. What they could have a problem with down the food in the future and what is wrong right now in what you can do about it. So they’re getting a lot for what they’re paying for and you should give them the value of that and you should in and let them know that you’re you’re trying to give them a total solution for their property. So that’s why you need to price all that price all that in so write that sheet out find out what things are going to take you. I know it’s tedious. I know it’s a pain but I’m telling you you need to find out what you need to make in order to make a go of it. Then when you have that number. Find out how are your competitors charging. What are they charging. Are you in the ballpark. And I would encourage you to avoid this the Clarion the siren call of trying to be the low cost better.
The reality is is that many times you don’t want to be that low cost a rule of thumb is if you’re if if you’re giving a price and everyone is saying yes to you you were probably too cheap. You need to be thinking about it. You should have at least a 10 percent refusal on the price and you want to be thinking about what kind of client you want because it’s a whole lot easier. It’s a whole lot easier to make money off of a few people and have some free time as opposed to just being balls the walls being the low cost guy working yourself ragged because this is a business that can really be there on your body. You need to be thinking about long term stability in this business because if your body is broken there’s a lot of things going to be taken off the table for you. You’ve got to make sure you take care of your health as part of this work. It feels like a young man’s game we’re finding in our industry that as people are getting to their 50s they can’t do what they did in their 30s and they regret
What they did in their 30s. So you have got to be thinking about
Stephen M. Vantassel, CWCP
Lewistown, MT 59457