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Episode 95


Topic: How to Create a Common Sense Budget

Guests: Dan Gordon & Donnie Shelton

In this episode we discuss:

  • Why budgeting is so important, especially when the economy is shaky

  • How the William Blair/PCO M&A Specialists Pest Index for July is at 11 percent year over year, but that is likely due to widely implemented price increases across the industry, not real growth

  • How Dan is also hearing about an increase in cancellations for the first time in several years

  • How there are pest control industry-specific considerations when it comes to budgeting

  • A trick Dan shares for quickly making a budget using QuickBooks

  • Why you should assess your goals and risk tolerance before making a budget

  • How it all starts with a revenue forecast

  • The difference between revenue and sales

  • The three buckets of revenue:

    • Route work (monthlies, quarterlies, etc.)

    • Renewals (termite, carpenter ant, etc.)

    • New sales

  • Why you can't forget about attrition

  • How you factor in the cost of new sales and what it takes you to generate a new customer

  • How to account for gross margin

  • How to set up your revenue line based on your goals

  • Why it's important to be realistic with your revenue budget

  • How to find average percentages for expense categories

  • The difference between saving a dollar out of G&A and selling one dollar more

  • Why to enter your budget into QuickBooks Online

  • How a great company like Massey Services does budgeting

Resources mentioned:

Notable: "If you're a smaller company, this is such a difficult thing to do. If you're a larger company, this is such an essential thing to do." —Donnie Shelton

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