Allan Draper on how he'd start a pest control company today

Allan Draper opened Proof Pest Control in the Detroit area in March 2015, when it’s still cold out. If he remembers right, it snowed on Mother’s Day that year. Even so, with a door-to-door team of 8 or 9 reps, Proof did $600,000 to $700,000 in revenue by the end of the year, and when we recorded, it had 14 locations in 7 states and a valuation of roughly $100M.

Proof was built on door-to-door. But when I asked where he’d put $10,000 of marketing money if he were starting a pest control company today, he said Google Ads.

Who is Allan Draper?

Allan Draper is the co-founder of Proof Pest Control. He owns more than 25 businesses, many in pest control and home services, and has built several past $1M. He founded the agency Lizard SEM (now Lizard Marketing), where Mat Rogers is CEO. He also hosts the Bug Bux Podcast, which made the Pest Control Millionaires list of the top pest control business podcasts.

Proof was his second run at pest control. According to the company’s history, his brother Brent was working for a pest control company in Ohio in 2006 and talked Allan into joining him. Their first try at a company of their own ran into trouble early, and Allan went to law school. In 2014 they tried again with Proof.

Your first $10,000 goes to Google

A lot of new owners almost feel guilty about focusing on sales, Allan told me, but without revenue you fail. He finds business plans full of fluff and guesswork, so he’d write a marketing plan instead.

He’d most likely put the $10,000 into Google Ads. That isn’t enough for a referral campaign, and SEO doesn’t fit a stage where every dollar has to turn into revenue. At Proof, Google Ads and Local Service Ads have become one and the same. LSAs cost more, but the leads are better. He does think LSAs are nearing a tipping point, since in some markets they’re getting close to what it costs to win revenue on the doors.

He’d skip Yelp early, since it takes a lot of reviews and a good response system. Pick 1, 2 or 3 channels, tops, and get really good at them.

Early on, he said, marketing is “like the black hole of a company.” Your cost per lead runs high while you go through a learning process with Google, and the returns come over the long run. For the license, insurance and equipment side of a launch, my partner Jonas Olson broke down what it costs to start a pest control business.

Door-to-door built Proof’s first year

Door-to-door brought in 80% to 90% of Proof’s first-year revenue, which Allan admitted makes his numbers an unfair comparison for most owners. Proof still knocks today, with smaller teams than at its peak.

He likes how low the risk is. A rep doesn’t get paid for a signature alone. The customer has to receive a certain number of services and still be active on a certain date, or the rep gets zero commission on that account. You also pick the neighborhoods. Google Ads has geofencing, but Proof still gets calls from people who search “pest control near me” while driving through Detroit on their commute back to Chicago.

It’s also expensive. An outside door-to-door company takes 90% or more of the first year’s contract value, and the revenue coming in can’t cover that on top of your fixed costs, vehicles, gas and product.

The truck is your storefront

I asked whether a company doing $10,000 a month should even think about brand. Not until at least $1M in revenue, Allan said, except for two things. One is the service itself.

“Our storefront is what does a technician look like? What’s the service like? And what does the truck look like when they show up?”

So skip the full wraps early and go with simple decals that look nice and clean. Allan once talked to a guy who’d paid a designer $50,000 for a logo and brand development plan, which Allan considers wasted.

Online reviews are the other. One Proof market has thousands of five-star reviews, and Allan doesn’t think even 100 one-star reviews would do much to it. For a new company, one bad review does a lot of damage.

Ask for the review before you start the service

Allan’s method for the first reviews works for an owner still running his own route. Introduce yourself, walk through a few things and answer questions. Then ask before you start.

“When I’m done, if you feel like I did a good job on your service, how would you feel about leaving me a five-star review on Google? It would mean a lot to my small company.”

Very few people say no. When you finish, tell them what you found, text the review link and stand there while they tap the button.

He’d keep that up until he had at least 50 reviews, then move to automated requests and technician programs. Years ago, Proof paid techs something like $10 a review until a branch reached 50, then $5. Chris Anderson of Applause has made the case on the show for paying techs for reviews instantly. Just be careful with Yelp, which doesn’t allow incentives. Today every Proof office has several hundred reviews or more, and review requests go out in pretty much every email, text and service report.

Allan also sees reviews as a retention tool, because of cognitive dissonance. People try to act consistently with who they are, so a customer who gave you five stars is less likely to cancel the next time something goes wrong, and more likely to refer you.

Get your chart of accounts right early

The first common problem Allan named was owners who don’t know their numbers or keep books. He called it next-level business stuff, not an indictment of anyone.

To start, he’d use QuickBooks Online, which is cheap and does the job. Set up your chart of accounts correctly early, and categorize transactions yourself at first, because you’ll see where the money goes and catch mistakes. Then learn to read your P&L and balance sheet.

On margins, he called 20% to 25% really healthy, depending on growth. He pointed to the rule of 40, where growth and profit add up to about 40, like 20 and 20 or 30 and 10. If you’re growing at a nice clip, don’t beat yourself up over 10% or 17%. He likes to see Proof’s branches over 30%. One branch once profited over 50% in a year, which Allan said isn’t always good news. It can mean you aren’t investing enough in equipment, vehicles and people, and you’ll feel that in the years after.

Character beats 10 years of experience

Allan called hiring and keeping top technicians one of the hardest parts of the business right now, and he admitted Proof struggles with it. He puts character ahead of experience, looking for good people who don’t bounce from job to job and who do what they say they’ll do. Some of Proof’s best technicians came from outside pest control, and one of its best leaders is a former police officer.

It bothers him when an owner puts up with a tech who shows up late and is rude to customers because the guy has 10 years in. “Bro,” he said, “you got this all wrong.” Some commercial jobs, like the ones in New York City, need rough guys with 30 years of experience. Proof is mostly recurring residential service, though, and there you can teach the pest control. You won’t change much about the type of person you hired.

He also looks for overlap between what the company wants and what the person wants. In interviews, and again after the hire, Allan asks people how Proof can help them get where they want to be personally over the next 5 years. People stay when they have a purpose, and nobody wants to work for a company that collects one-star reviews, whatever it pays. Proof also leads interviews with its core values, and safety is first. Allan can sleep at night after losing money, but he struggles when a technician gets hurt.

Replace yourself one job at a time

“First you do what you have to do, then you do what you’re good at, then you do what you want to do.”

When you start, you do everything, and your job is to replace yourself. Allan pointed to Michael Gerber’s The E-Myth, where the best cupcake baker in town starts a business and never has time to bake.

His first hire is a technician, “no doubt,” to get you out of the truck or at least cut your windshield time. Second is an administrative person who can juggle a lot, like running payroll, answering phones and ordering supplies and chemicals.

Software is another early call. Proof switched platforms 6 or 8 years ago, at a fraction of its current size, and Allan figures the downtime and problems had to cost $100,000. Pick the platform you’ll want for the rest of your company’s life, he said.

Grow where you’re at

Some commercial companies absolutely crush it, but Allan isn’t interested. Proof’s commercial accounts mostly fell into its lap, and food handling businesses, schools and daycares come with their own regulations. He owns a law firm, and it doesn’t practice every area of law either.

He’d start where the 3 circles from Jim Collins’s Good to Great overlap, which are what drives your economic engine, what you’re passionate about and what you can be the best in the world at. He wouldn’t add a line of business until you’re doing several million. Most people who start a business, he said, catch shiny object syndrome and add commercial, mosquito or a branch somewhere new, which just creates more problems.

My take

Reviews kept coming up in this conversation, even when we got to hiring. Besides helping you rank, they help you convert and keep customers. I told Allan I’d call them at least half of branding, because you can have the worst logo in the world and your reviews will still show what you stand for.

I usually recommend that companies get to 100 reviews. There’s a proven boost at 10 and another at 100, and a lot of companies get stuck between 25 and 50. You don’t need thousands, just enough to pull away from the small guys in your market. For a new Google Business Profile, Allan’s ask at the front door costs nothing.

His first hire is where he and my partner Jonas Olson split. Jonas argues that your first hire should not be a tech, because an admin or virtual assistant buys back your time for less money. If you’re about to make that hire, read both.

Allan finished with his mom’s advice to “enjoy the journey,” which used to drive him crazy. After reaching goal after goal, he realized the early days were the good part.

“The hard stuff is the good stuff. And it doesn’t get any easier. Your problems just change.”

Where to find Allan

Allan says he’s pretty easy to find and is on all the socials. His book, Pack Your Lunch, covers the sacrifices it takes to build a business and the benefit that comes with each one.

• Website: allandraper.com
• Company: Proof Pest Control
• Podcast: Bug Bux Podcast
• Instagram: @realallandraper
• Facebook: Allan Draper
• LinkedIn: Allan Draper