Sanrith Descartes
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Yeah that looks more like what you would want.
I am being given a business
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Brad2770
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Just found out I’m already registered. I have the number now. Just need to apply for the business license.
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Sanrith Descartes
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If you havent already go online and search "requirements to start a business in Texas" or something similar. I am finishing up my MBA at UTPB and we had to do something similar for a class. There will be lots of free websites that will tell you step by step every document and license you should need for that particular state.
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Hateyou
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Did you ever get into a house/apt or you still in the truck? Maybe you already answered this but I forget.
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Sanrith Descartes
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Brad2770
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Bug Armor: One gallon was about $125. Used 6 ounces. Cost was about $6.
Boric Acid. 5 lbs cost $20. Used 0.5 lb. Cost about $2
Alpine: 500g cost $190. Used 10g. Cost about $4
Giant Glue Boards: Case if 24 cost $77. Used 4 boards. Cost $12.
Steel wool: Maybe $0.20 for what I used.
60 miles on my truck. The gas in it was when Trump was still President, so maybe $1.88 when purchased, like $2.85 to replace.maybe $6 to $8 for the trip.
Total cost to business: $20 to $22.
This question has made me realize I need to keep better track of this. I still have all of my receipts. I need to organize them better and make them easily accessible.
Edit- I’m going back for a second app. He hasn’t had service in over a year, so wanted to give a two week follow up. Charged full price for his property size (1500sq ft or smaller is $99.99. Every 500 sq ft is +$25. Property was 3300sq ft. So $199.99), but gave him follow up for free. Then he goes quarterly. Some of those prices above will be doubled to compensate for return trip. Remove boric acid, glue boards and steel wool costs for second visit.
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Sounds to me like you have a pretty good idea what you're doing. Good job!
Keep track of your costs, and don't give away too many follow up visits.
Keep track of your costs, and don't give away too many follow up visits.
BrutulTM
Good, bad, I'm the guy with the gun.
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You also have to figure in depreciation/maintenance costs/insurance/taxes on your truck, not just the gas, along with any other overhead/infrastructure you will have in the future and also what your time is worth. You might not be paying yourself yet, but at some point you need to be making a wage that justifies the time you're putting in. Remember that the business is to support your life, not the other way around. Being your own boss is great, but be careful not to abuse your employee. If you're working 80 hours a week and taking home less than minimum wage then your business is not succeeding even if it's technically in the black. It needs to be providing you with a decent quality of life or there's no point in it.
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Sanrith Descartes
Veteran of a thousand threadban wars
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So the 30-second version:
Sales (revenue)
<less> COGS (the cost to produce the product or service)
<equals> Gross profit
<less> all your expenses (everything not COGS (licenses, rent, utilities, payroll, interest on loans, etc)
<equals> Net profit
Net profit/Total Revenue = Profit margin
So, with this in mind, you want to right down (preferably in something like excel) your COGS for all the various types of jobs you perform. This tells you how to properly price out your jobs. This is CRITICAL.
Then you need to figure out over a year's time how much revenue you need to book to be profitable. The idea is to back into this number. You calculate/estimate your annual expenses (every single penny) and then this tells you how much gross profit you need to cover your overhead. Don't count total sales since you have to pay for the COGS to generate the sales so you need gross profit to exceed total overhead expenses.
Also critical. You currently aren't paying yourself. You have to factor this in as
BrutulTM
mentions.The margins sound amazing so assuming your numbers are correct, this is how it would look.
Sales $299
<less> $22 COGS
<equals> $277 gross profit.
Lets make up some numbers.
Assume your total annual overhead are $50,000
You make $277 gross profit per job.
You need to perform 180 jobs a year or 3.5 jobs a week to break even. But this doesn't "pay you".
Lets assume you value your time at $30/hour. 30*2080 (work hours in a year) = $62,400.
So now lets factor that in to the equation.
$50,000 + $62,400 = $112,400 annual objective
112,400/277 = 405 jobs a year or 8 jobs a week to break even and pay you a $30/hour salary.
This ignores things like payroll taxes, benefits income tax and a world of other stuff. But for now its a simple model to give you a visualization of exactly how much revenue you need to make for your business to be profitable and for you to make some scratch doing it.
I can't stress enough, excel makes this much easier for you. Something like quickbooks online or something similar is valuable. It isn't critical right now sicne your volume is low and you can handle it all in excel. Either way you need to track everything. Every penny.
More than 30 seconds but you hopefully get the idea.
tldr: Know what your service costs you to provide it. Know every single penny of expenses (overhead). This allows you to know how many jobs you need to perform to be profitable. Calculate in some sort of salary for yourself. Win.
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Control
Ahn'Qiraj Raider
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Grats on the first customer, and one with recurring revenue at that! I know you're just starting and will be scrambling to gain clients for a while, but here's another thing thing to keep in mind with your pricing. Right now you're probably charging enough to make it worth your time, but try to work towards charging enough to replace yourself. You'll eventually fill up your schedule, and then keep making progress, you'll need another truck plus an employee. So then you'll need to be charging enough to cover the extra equipment, enough to make it worthwhile for both you and the employee, and enough to cover the productivity difference (it'll take a while to get someone up to speed, you'll probably have to hire/fire a few times to get someone decent, and even then, they'll never be as good/fast/motivated as you).
It might make sense to stay on the lean side until you get your footing, but as your schedule fills up, you'll be able to experiment more without feeling like you're cutting your own throat by pricing yourself out of the market. If a big company finds a breakroom full of roaches, they're going to want it fixed NOW. Whether you're charging 300 or 3000 is less important than "can you fix it NOW?"
LiquidDeath
Magnus Deadlift the Fucktiger
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You need to get yourself hooked up with a good real estate agent that sells residential homes at a good clip. My agent has a pest control/termite guy that she brings in for all her clients so they don't have to do the legwork and he is solid. Good way to get your foot in the door and snag some potential long-term customers without a lot of legwork on your side, especially if you offer a small discount after the initial work for the new residents to keep you on for the future.
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Kithani
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I would agree with the caveat that doing termite inspections if you’re not qualified (no idea how that works) might be a good way to get lawsuited into oblivion.