Pricing strategies for pest control jobs or any other type of business service is an art form. Do it right and your business will persevere and help you grow financially. Do it wrong--such as failing to assess total costs or adding in a healthy profit margin--and it will destroy you. Knowing how to price your pest control service depends on the perceived value of your service from the customer's point of view, according to Charles Toftoy, an associate professor at Washington University's School of Business and Public Management. He recommends smaller companies set comparable prices to similar-sized businesses and outshine bigger competitors with exceptional service.
How to Price Pest Control Jobs
Find out what your competitor is charging for similar jobs by contacting at least five companies to get an average price. You can get this information from competitor websites, phone calls and interviews from friends or neighbors who use their service.
For each job, calculate your direct costs, including materials and labor. Sprays are usually priced by the gallon, powders by the tube or canister and bait and traps by the unit.You should know how much chemical you will need, for example, to treat for ants in a 1,500-square-foot home. Include the hourly wage you charge for your time with a percentage added in for payroll taxes, benefits and insurance costs.
Add in a percentage for your overhead costs such as rent, business taxes, gas mileage and auto insurance. Many businesses overlook these costs when pricing their services, according to the Small Business Administration's handbook on pricing products and services for profitability.
Determine profit after totaling your costs. Toftoy and other experts recommend looking for annual statement studies for small and mid-sized businesses in your industry to set profit goals. If the profit margin in pest control is hovering at eight to 10 percent and your service price sits at a six percent, it is time to raise your prices.
Decide how you will base your price. Many pest control companies charge by the job or by the type of service. For example, treatment for bed bug jobs are more labor intensive (sometimes requiring three to four services) and require more material compared to a one-time spray treatment for spiders. Companies will also charge by service type. Offer to reduce the initial fee for treating a one time service if your customer signs a yearly agreement.
Practice doing some price quotes for typical pest control jobs, such as estimating the cost of treatment for ants, cockroaches, rats or fleas for a 1,500-square-foot home. If you come up short, reassess your material and labor costs, include a profit margin, then reset your price.
Resist the temptation to compete on price alone. Bigger pest control companies can drop prices and make up their profit margin in sales volume, but this same strategy can financially ruin a smaller company. LeRoy Clark, owner of Outback Pest Control Services in Sacramento, CA, recommends competing on other qualities such as personal service.