In the fourth and final webinar of the “COVID-Proofing Your Pest Control Business” series, hosted by PCO Bookkeepers and Coalmarch, Dan Gordon shared several financial moves pest control companies should be making now.
Watch the entire webinar replay here and the clip of these tips above.
So everybody who received Paycheck Protection Program (PPP) funding is high fiving each other, right? And what a windfall, except for if this thing goes on for months and months, you may need that money. I believe that this thing was put together so hastily and there’s going to be a lot of fallout from it, especially in the way that you prove that you’ve met the criteria for (loan) forgiveness. They’re not telling you to do this, but I recommend highly that if you’ve been funded:
1). Open up a separate account.
2). Put the PPP money in the separate account.
3). When you draw payroll, make sure you draw the payroll from that account. Make sure that if you’re paying your utilities or your rent interest payments, make it come from that account, so that you can actually show where that money went.
Now, if that’s true and everything’s going great, that means that you’re going to have a whole bunch of money over here that you didn’t have to spend on payroll rent. I recommend that you put that money aside and don’t do anything with it for a while, just because this thing, I heard somebody on a TV, I think it was CNBC, talk about how this virus has beat us at every corner. Every time we think that we know something, it shows that we were wrong and something else happens. And while we’re saying, “Okay, we’re good, we’ve reached the apex and we’re on the way down,” and I hope that happens, but what if it doesn’t? If you have that money, put it aside and make sure cash is king. So, put some of your money into savings.
Try to work with your banks to increase your credit lines. You may not have to draw them, but they’re nice to have. And I’m going to tell you right now that interest rates are going lower, but this happened in 2007 to 2008. Interest rates went really low except nobody was qualifying for loans because you had to have stellar credit. Go see right now if you qualify for anything. See if you can get increases in your lines of credit.
Tighten up your accounting. Make sure you’re doing a good job with your collection policies. You’re probably going to see a lot more credit card failures. So as soon as you run your credit cards, make sure that you get those failures so that you’re on top of it. And reconciliations. So your bank reconciliations, if you’re a PCO Bookkeepers client, we do your reconciliations. But in QuickBooks you can get that download every day. Make sure you can reconcile from the bank to the book and vice versa.
Next, renegotiate terms with vendors. If you can’t get a discount, get longer terms. If you can’t get longer terms, get whatever you can. I had one friend of mine said, “I’m getting a T-shirt if I can.” So that’s what you get.
Make sure that you have KPIs on everything – key performance indicators. We talked about cost per lead, cost per sale. We want to know about our labor percentage, what we’re spending on the various items. If there’s an area that you’re not an expert in, you can outsource it. A quick commercial, PCO Bookkeepers, we’re happy to do your accounting and bookkeeping. That was kind of selfish, but had it throw it in there. If there’s not a strong process in place, outsource. And every position has KPIs, just make sure that you measure them, communicate with them, incentivize people on making these numbers. Usually we talk about, “Well, only my sales people are incentivized or my managers.” No, make everybody part of the program, so everybody can win.