Pest Control Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 13,100 pest control services in the US exterminate and control the presence of unwanted creatures, such as insects, rodents, or other small animals. Companies may specialize in residential or non-residential services. Over 70% of industry revenue comes from residential services. Providers may also specialize in a particular industry, such as food manufacturing or health care.

Hazardous Substances

Pest control often involves the application of toxic chemicals that have the potential to harm humans, pets, plants, or the environment.

Government Regulation

Because pest control involves toxic substances, the EPA and state governments regulate various elements of operations, including licensing, record keeping, standards of application, training, and product registration.

Industry size & Structure

The average pest control services provider operates out of a single location, employs 10 workers, and generates $1.5 million annually.

    • The pest control services industry consists of about 13,100 companies that employ about 125,000 workers and generate about $20 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom; the top four firms account for about 27% of industry sales. The majority of pest control service providers are small, independent companies or franchises.
    • Large companies include Rollins (Orkin) and divisions of ServiceMaster (Terminix).
                                  Industry Forecast
                                  Pest Control Services Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  May 18, 2023 - Pest Index Rises 11% in March 2023
                                  • The US William Blair/PCO M&A Specialists Pest Index grew 11% year over year in March 2023, according to Pest Control Technology. The increase was in line with the long-term average growth rate of 11%. The residential, commercial, mosquito, termite, and bed bug indexes all posted increases in March year over year. According to William Blair Equity Researcher Tim Mulrooney, “The total pest index has decelerated two months in a row, primarily due to a slowdown in the Residential Pest Index. However, we continue to characterize the overall market as healthy, showing double-digit year-over-year growth on top of two years (2021 and 2022) of unprecedented growth.”
                                  • Labor quality was the top business problem for small business owners, called out by 24% of owners, according to a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index declined 1.1 points in April 2023 to 89.0, marking the 16th consecutive month below the 49-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “Optimism is not improving on Main Street as more owners struggle with finding qualified workers for their open positions. Inflation remains a top concern for small businesses but is showing signs of easing.” Owners are still encountering supply chain disruptions, with about half reporting a significant or moderate impact on their business.
                                  • Supply chain issues remain for 51% of respondents, while 49% said they are no longer facing supply chain issues, according to a recent Pest Control Technology (PCT) poll. Supply chain issues generally occur for chemicals, equipment, materials used for packaging and applying products, personal protective equipment, and vehicles. One firm, Pest-End in New Hampshire, said supply chain issues have improved in some areas but remain for vehicle acquisitions. The company has had to transition from vans, which many manufacturers stopped producing, to trucks, which cost more and are also challenging to find. Pest-End also reported that some gel products used by the company have been difficult to obtain. Other pest control companies said some products are on backorder for extended periods with no time frame available. Some companies reported success with suppliers finding alternative products for products that are unavailable or have limited availability.
                                  • New York City has hired its first-ever director of rodent mitigation, also known as the city’s “rat czar,” according to Fortune. In April 2023, the city hired Kathleen Corradi, a former elementary school teacher who previously oversaw rat mitigation efforts at the city’s schools. In the past year, New York City residents have called in nearly 3.2 million rat sightings to the city’s 311 service request line, which remained slightly under the record number of complaints in 2021. Mayor Eric Adams signed legislation in November 2022 to reduce the city’s rat population, including new rules about the length of time garbage can sit out at curbs. Corradi will create a “rat mitigation zone” in Harlem, where the city plans to invest $3.5 million on an accelerated rat reduction plan. Strategies that work in Harlem will be used in other areas.
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