Guide
Route profitability and retention for pest control operators
Density is the whole business. A stop forty minutes out is not the same stop.
Reviewed by Darren Lim, US CPALicence CPA.742536027 min read
Pest control is a density business. Two accounts paying the same monthly fee are not worth the same to you if one is eight minutes from the last stop and the other is forty.
Almost no pest control books reflect that. Revenue is revenue, fuel is one line in overhead, and the route that is quietly costing you money looks exactly like the one that is carrying the company.
What a route actually earns
Four things have to come out of route revenue before you know what it made.
Tech time, loaded. Not the hourly rate — wage plus payroll taxes, workers comp and benefits. And not just time on site: the whole day belongs to the route, driving included.
Drive time and fuel. The cost people consistently understate. A route with twenty stops in a tight suburb and one with twelve stops spread across a county can bill similarly and cost completely differently.
Chemicals and materials. Per stop, not as a monthly lump. Different treatments cost very different amounts and averaging hides it.
Vehicle and equipment. Payment or depreciation, maintenance, insurance, and the equipment in the back.
Set that against what the route bills in a month and you have route-level margin. Do it for every route and the spread is usually wide enough to act on immediately.
Revenue per hour beats revenue per stop
Stop count is the number most operators track, and it is the wrong one. A tech doing fourteen tight stops can generate more margin than one doing eighteen spread out, because the difference is absorbed in windscreen time that nobody costs.
Revenue per route hour — billing divided by the total hours the route consumes, driving included — is the number that tells you the truth. It exposes the outer edges of your territory immediately.
Retention is the growth number
Recurring contracts are the entire asset. Two operations with identical new sales and different churn are on completely different trajectories, and only one of them is actually growing.
Worth tracking monthly:
- Accounts at period start, gained, lost, at period end — the basic movement
- Churn rate — lost divided by starting accounts
- Average contract life — how long an account stays, which tells you what winning one is worth
- Reason for cancellation, even roughly — price, service, moved house, problem unresolved
That last one is worth the effort. Losing accounts to price is a different problem from losing them because the ants came back, and the fix is completely different.
What owners typically decide
Three actions come up again and again once this is visible.
Drop or reprice the outliers. There is nearly always a service area that costs more to reach than it returns. Once it has a number, the decision stops being emotional. Some operators drop it; others add a distance surcharge and are surprised how many accounts accept it.
Tighten routing. Reassigning accounts between routes for density often improves margin more than any price change, and costs nothing.
Price recurring against current cost. Contract pricing tends to be set once and left while fuel, chemicals and wages move underneath it.
Setting it up in the books
Three things, none of them exotic:
- Revenue coded to the route, not just the company
- Tech hours coded to the route, including drive time
- Chemicals and materials tracked per route rather than as a monthly total
Add contract counts and cancellations captured monthly, and you have everything above.
What good looks like
One page each month: revenue, cost and margin per route; revenue per route hour; accounts gained and lost with churn; and the trend on all of it. Enough to know which routes to grow, which to reprice, and which to let go.
Related
How we do this
We build this into your books. Starting with a month that costs you nothing.
Revenue and cost per route including drive time, revenue per route hour, and contract movement with churn — the numbers that decide which service areas are worth keeping.
- Every transaction categorized, accounts reconciled, the month closed
- Reviewed and signed by Darren Lim, US CPA — licence CPA.74253602
- The Two-Day Guarantee: Your first month back in two days, or the next month is free.
You are almost certainly driving to at least one area that costs more to reach than it returns. Working out which takes one month of properly built books, free and CPA-signed. Keeping the guess costs you every single week.