The government census reports that pests are a big problem in the US. Around 14 million housings suffer from this issue1. Let’s find out how to materialize your Pest Control Business Idea.
But can you make a business out of this pesky issue?
Certainly.
Roaches, mice, rodents, and other pests have become common now.
But it’s not a new or unique business opportunity. There are already 32,365 pest control businesses in the US2. But the Pest Control Business Idea is still in vogue.
However, there is scope for scalable growth of new businesses in this sector. Every year, 3.8% of new pest control businesses emerge. So, it’s apparent that the market is wide open.
Other than Terminix and Orkin, there are few other big brands in the business. So, what’s stopping you from becoming the go-to exterminator in your community?
Certainly, the scope is there. But what about the funds you need to start a new business?
I already got many enquiries like- How to get funding for Pest Control Business?
Don’t worry. We will cover that part in the article, too.
Define the Services Included
It’s not yet time to worry about How to get funding for Pest Control Business?
The time is ripe for thinking about what services you may offer.
Your services, as a pest control business, can cover several areas. But your Pest Control Business Idea should be unique and evident.
Annual Services
Americans spend approximately $5 billion on annual pest services3. So, it’s a big market.
You may cover services to ward off seasonal pests like ants, beetles, centipedes, and more.
The estimates to open an annual pest services company are as follows:
- Minimum investment needed: $3,145
- Supply costs: $200 to $2000
- Registration Costs: below $300
Specific Services
Some pests need special control. For instance, ladybugs are one of a kind.
Every pet control agency has its unique formulae and techniques. You may develop your specializations, too.
Many users commented- How to get funding for Pest Control Business Idea? However, they forget to define the niche market they want to target.
To sum up, funding depends on the strength of your business. A unique mission, vision, and KPIs are paramount to building a credible company.
So, it’s redundant thinking about funding when other fundamentals are not sorted yet.
The estimates to open an annual pest services company are as follows:
- Minimum Investment Needed: $6200 (approx.)
- Supply Costs: $200 to $2000
- Registration Costs: below $300
- Average franchisee cost: $35000
Treating Invasive Pests
You may create a business out of it, too. For example. 63% of US households have cockroaches. And there are no more invasive bugs than them.
So, you may become a specialist in handling invasive pests. Such a Pest Control Business Idea is rare and rewarding at the same time. Other than cockroaches, carpenter ants, and bedbugs, Americans deal with few more perils.
I believe it is a phenomenal business idea. You might get reasonable funding for this business.
Wildlife
Wildlife (pigeons, skunks, sparrows, groundhogs, bats)
Brands like Orkin and Terminix are the biggest names in the US pest control market. However, they mainly specialize in small pet control.
However, the problem of pests is not so limited. AMerica needs more specialized agencies to tackle wildlife. Pigeons, skunks, bats, and groundhogs are also equally big perils.
To avoid such pests, people resort to using ammonia in infested areas. Frequently, black pepper is also sprinkled. However, there are rare upfront agencies that can solve such pest problems at a commercial level.
- Minimum investment needed: below $6000
- Staffing cost: $5000 (for three months)
- Supply costs: $200 to $2000
- Registration Costs: below $300
At the end of the day, pest control is not deemed a conventional business idea. So, you may find less viable financing options for your business.
Assessing Startup Costs
Before pitching for a loan, understanding your expenses is necessary.
Here, I did an approximate analysis of the startup costs you must cover.
Firstly, you need a stash of approximately $6000.
It covers licensing and registration costs ($350 and $700, respectively). It also includes mandatory expenses like:
- Buying pest control software
- PPE kits for your staff
- Brand uniforms
- Business cards and DIY needs
But your logistics costs are separate.
As logistics cost, another $10000 to $15000 would be required upfront.
How To Get Funding for Pest Control Business Idea?
I have compiled the best funding options for your pest business here.
I heed several queries like How to get funding for Pest Control Business Idea?
For them, it can be a one-stop solution.
1. Bootstrapping
I believe it is the best way to fund your business. However, the one golden rule of bootstrapping is to avoid external loans to fund the initial stages of the business.
Many small businesses follow bootstrapping techniques to start a small business.
It may also be the ideal financing plan for your small business setup.
Unique startups that made it big, like GiftGood or beAzubi, used this technique. Many franchisees also use this technique to fund startups.
2. Taking Grants from Friends and Families
You have your friends and family to help you in an hour of need. Many startups begin with small grants from home. But I recommend against it. Firstly, I feel that it is a significant liability that puts your personal finances at stake.
Let’s suppose you start a pest control startup with a few friends. A fresh Pest Control Business Idea is also on the table. And you accept a grant from your family to mobilize the business initially.
What Happens then?
Irrespective of whether the business stands out, you are the one with full repayment liability here.
Other partners may bail out of shouldering the liability of repayment. But you can’t do that. If the startup goes astray, you may find it challenging to repay.
Besides, a survey conducted by the Small Business Insititute confirms my hypotheses. It says only 3 to 6% of people can build a successful business by taking grants from friends and family members4.
3. Bank Loans
Most small business owners feel that bank loans are their obvious go-to option. Not that I think otherwise.
But I would like to talk about its pros and cons in detail.
Pros:
- Business loans are readily available due to government schemes
- All partners shoulder the liability of repayment equally
- There are many microfinancing agencies giving business loans to small businesses
Cons:
- The standard interest rate of business loans in the US can go up to 12.47%
- Bank loans require collateral
Statistics shared by Capital Bank show that 29% of businesses fail due to capital shortage despite taking bank loans1.
So, it is only wishful thinking that bank loans are the ultimate funding option for starting a pest control business.
But, so far, I feel it is the most reliable option you may consider.
4. Equity Loans
Resolved to get your business onboard?
You may approach an angel investor if you don’t want to shoulder the hefty interest of loans.
The other options are approaching venture capitalists or taking equity loans. The US government has many equity loan options you may consider.
Applying for a Loan
Funding is a significant problem for new business startups. Small businesses often falter when applying for loans among other issues.
Let me help you with a complete proof strategy to prevent loan rejection.
Step 1: Building Your Case
Being specific about what you need is the key. Try to back up your claims with valid business reasoning.
So, state the loan amount you need clearly. At the same time, clarify the deliverables that will be covered by that amount.
The second most crucial thing is assuring the bank that you will be profitable. In the same vein, consider discussing the ROI that the investment will drive. Parallelly, make a growth plan for 3 to 5 years.
A growth plan shows that you plan to make your venture big. Hence, your bank will also believe you can repay the loan.
Step 2: Place Your Assured Repayment Plan on The Table
It is better to ask for leverage from the bank while planning the repayment schedule. To clarify, you may face contingencies while setting up your business. And it may affect your repayment.
So, negotiate the terms of payback, keeping the contingencies in mind.
A 12-month contract gives you ample time to make a fortune and start paying back.
Step 3: Disclose Your Assets
Offer a detailed valuation appraisal to the bank. Most importantly, discuss the collateral assets offered, in detail.
In the same vein, it is better to highlight the business assets and your personal ones.
However, emphasizing your intent to succeed in your venture during loan negotiation is more important.
Final Words……
There are many viable options for financing a small business. However, not all options may be recommended for starting a business with your unique pest control business idea.
My findings reveal that bank loans are the best funding option. However, I feel bootstrapping is a less risky option.
I believe I could solve some doubts regarding How to get funding for Pest Control Business?
However, the bottom line is that you must have a strong purpose and resolve when starting a business. The pest control business is still a unique niche to invest in. I hope you’ll grow big if you start now.
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- https://www.census.gov/library/stories/2021/04/how-many-american-homes-have-pests.html ↩︎
- https://www.ibisworld.com/industry-statistics/number-of-businesses/pest-control-united-states/ ↩︎
- https://www.bookcleango.com/blog/pest-control-statistics ↩︎
- https://www.energypr.co.uk/app/uploads/2023/09/Family-Business-Brand-Report.pdf ↩︎
This article provides a lot of valuable information—excellent work!