283 - Best of 2025! The 7-Figure Summer: Uncovering the Hidden Millions in Door-to-Door Pest Control with Casey McDaniel

0:00What does the world of door-to-door sales look like? Seven figures in four or five months. Seven figures? Yeah. No way. A million plus getting a 60, 70 % commission at minimum. What? We spent the whole summer just kind of stealing the playbook and then we launched our own. So your gross margins are like 120 bucks on the 135. Yes, sir. Oh my gosh. We ordered chemicals, put them in my garage and we started knocking doors. So we've turned four grand a piece into 1.3 million in recurring revenue as of today.

0:31So the only experience that I have with pest control, which is your business, are the door-to-door sales guys. I have no idea how the business actually works. Tell me a little bit about you and what a pest control company is. Yeah, I mean, pest control is a pretty simple model. If you've ever had bugs or mice or any pests around your house, we're the guys you call. If you Google exterminator, Google pest control near me, that's what we're trying to do is get to the top of that list. So my first experience with pest control was when I was super young. And the only time my parents said they've ever used it, my mom had just had my little sister.

1:10So I was probably five years old or so. And she put her in her crib and there's some big old spider in the corner. And she said, I'm not messing with this. And she called like Orkin or Terminix or something, one of the big brands. And that's the only experience I had with pest control until I was about 20. And then I kind of got into it through the door to door side. But yeah, I mean, it's just spraying for bugs, baiting and trapping for mice and the occasional skunk or raccoon that we do. Okay. So say those again. And what do you call them? Are they like vermints or? There's a bunch of different categories and different licenses for different stuff.

1:41You really have kind of your general category, which is just common pests, spiders, ants, cockroaches, stuff like that. And then we've got rodents, which fall under that license, just mice and rats. And then there's a wildlife license in most states for squirrels, raccoons, skunks, prairie dogs, and burrowing pests, some of those. You can also get a termite license for those. There's soil sterilization, a mosquito license, and there's a ton of different ones. But at the end of the day, we're just killing bugs. How did you get into it, like working in the business? Yeah, so in 2019, I got home from my LDS mission, enrolled in college, and I was looking to just make as much money as I could as a poor college kid.

2:23And I was running track as well. So I was either going to have to get a full ride scholarship after my first year, or I was going to have to make a bunch of money because college ain't cheap and I'm not that smart. So I didn't get academic scholarships. So I was looking at everything. I was maybe going to get my CDL and drive a truck in Idaho with my brother-in-law, do landscaping in Utah, go back home and work for my parents' business. And then my cousin hit me up and said, Hey, I do door-to-door pest control sales. I don't know if you've heard of it, but he said, I'm going out to Raleigh, North Carolina this year with a new company.

2:51Let's have an interview. You might be a great fit. And we chatted about it and it's just commission-based sales. And I gave it a shot, went out there. And honestly, I didn't love it. Worked hard my first year, sold about 150 accounts during COVID in 2020. And I made, you know, 25 grand or so. And I was like, that was awesome money in between semesters. But I was like that was so hard. And I got told no, like 8 ,000 times. So I wasn't going to go back, but they moved in. Five grand in three months. Yeah. Yeah. And that was as a rookie. It there's, there's, there's guys out there doing door to door sales, making seven figures in four or five months, seven figures.

3:31Yeah. No way. But like a million dollars, they're making a million dollars. Yeah. A million plus. Now part of that will be their personal commissions. And then part of that is the pyramid scheme recruiting guys under them. But no, the guys that clear seven figures, a large percentage of that is personal commissions that the top guys are selling 1.5 million in revenue and getting a 60, 70 % commission at minimum. What? Dude, this world fascinates me. So I'm LDS too, you're LDS. And it's like, when you come home from your mission, you're trying to make money. Like, Oh, I have a skill set. I can go knock on doors.

4:09Oh, wait, I can sell now too. I was doing that for God. Now I can go and do this for Terminex. Great. So you see, you see just like a ton of LDS guys after the mission, go knock on the door and they can make good money. So like I've had friends who've done it. I never did it. Cause it, I mean, for whatever reason, I'm just like, I can't, the only person I can go and sell for is God. However, seven freaking figures in a summer sounds insane to me. What does the world of door-to-door sales look like? Yeah. I mean, the daily schedule is generally you wake up, you kind of have some free time in the morning, hit the gym, eat breakfast.

4:42A lot of the sales bros are very, very self-help and, you know, Andy Elliott. Yeah. Yeah. And then stoic and read your book and do your cold bath and go to the gym and eat your carnivore diet and all that stuff. So a lot of those guys are doing that morning routine. And then you usually have a morning meeting between 10 and noon where you get together, go over how the last day went, go over goals, blah, blah, blah, a little bit of sales training. And then boom on the doors, usually by noon at the latest. And you're not until dark or just after dark, if people have their lights on and it's just knocking doors the whole time, giving your pitch and just getting as much momentum as you can and selling, selling, selling.

5:20And then you wake up and do it again. The ones that I've seen are pest control, obviously windows, some roofing, alarm systems, solar. Those are the ones that I, am I missing any? No, the big three are pest control, solar, and alarms. And then roofing is kind of the little brother. And then after that is like DiBella doing their windows and also roofing and some of that. Which one's the most for a sales guy to go knock door to door? Which one's the most financially lucrative? They're all at the end of the day, pretty equal. It just depends on your personality. The solar and the roofing oftentimes are longer sales, very high ticket, build a relationship.

5:58you only get a few sales a week or a few sales a summer. Whereas the pest control is just grinding it out. Those top guys are getting 10 to 20 sales a day. And so it's very different. Depends on your personality, how much you want to put in and just who you are. But at the end of the day, the top reps are all making very similar numbers in all the industry. How do they marry it into a pyramid scheme? Well, then these LDS guys that are dominating, they come home, they put it on Instagram and they say, Oh, look, I made 250K in my last summer. Come and work with me. And they bring out guys and they know all their mission buddies and they say, come and do it, come and do it.

6:31You'll do great. And then they'll get a commission off of each one of their sales. Any guy that you recruit, essentially you get a cut of their commission. Yep. So, and it doesn't affect his. So if I recruited you and you came out and knocked for me, you're not going to get a pay cut. They just add me, you know, a 5 % commission. Or if I have a huge team, if I've got 20 guys that I bring out, some of those guys will be making, you know, 18 to 25 % override on each one of their reps. And then if you're a trainer as well, right? Like if you come out and you start actually training guys, don't you get a percentage of whatever they say?

7:04Usually, yeah. Yeah. If you are a big guy and you've got your team under you, some of these companies that do just have kind of stray recruits that come in, they'll just put them on your team. And as long as you train them and help them along the summer, then yeah, they'll give you a percentage on those. What is it about these industries that attracts people to go door to door? Is it like, yeah, I just don't know. I mean, the solar, the roofing, those sorts of things, they're high ticket. So they can just bake that into the price, give a guy a commission and do it. For pest control, it's the recurring revenue.

7:32And so - What I mean, what it means is why knock, like, why aren't they going through Facebook? Why aren't they going on Google ads? Why aren't they going through mailers or whatever? You can't beat door to door. It's a high pressure sale. A lot of the sales that we get aren't people that are like, oh, I was just going to call someone. They're like, oh, well, we just moved in. We haven't seen anything, but that sounds like a good idea as a preventative measure or, you know, Oh, I liked my last guy, but if you can beat the price, let's do it. Or I like him, but you sound like you're going to do a lot more.

8:01I'll spend a few extra bucks. Let's get the premium service. And so you're getting a lot of people that aren't on the fence to sign up of people that aren't going to call in, whether you mailed it to them or did a Google ad, you're going out there and a high quality sales rep is going to switch over people from other companies as well. Yeah. Cause if I get a targeted Google ladder, if I'm on Facebook and I see like, oh call terminex it's like well okay i'll call them later or oh i have every intention to call terminex and then i forget about it but if you're at the door and you're like do you care about your kids a lot of it is just educating about what we do because like you said oh what is pest control we come in and it's not like we're gonna tent the house like in breaking bad and fumigate you have to get a hotel for three days eco-friendly super safe we're just gonna knock down the wasp nests step high, knock down the cobwebs so it's staying pretty, spray around the foundation, you're good to go.

8:51And so people are happy to do it. So why are the commissions so good in this business model? Because of the recurring revenue, companies are willing to take a loss the first year, knowing that they're going to have a lifetime value of three to seven years on those accounts. Really? Yeah. Yeah. Like seriously, the lifetime value, we can just talk pest control, right? But pest control, lifetime value, they're with you for three to seven years. Yeah. And so I'm not a, I don't know what the proper way to determine what the true lifetime value is. We started three years ago, over 50 % of our customers are still with us from that first year of knocking doors.

9:30And we hear a lot of them, people will live in a house for seven years before they move. So that sounds like what they do. The company we just acquired, they've had customers that have been with them from the beginning, 17 years now. Yeah, the way that I typically do it is if you have a lot of data, you can say, oh, this is our average lifetime length. I don't even know what the right term is. How long an average customer stays with us, right? I have 20 years worth of data because the business has been around for 20 years. This is how long an average customer stays with us. But as I'm getting started, usually what I do is I'll look at first the monthly churn.

10:02And I'll say, oh, we churn 5 % of our customers every single month. that means it's going to take 20 months before I've turned over all of my customers. Does that make sense what I'm saying? Yeah. Right. So it's like, okay, that's the average duration that a customer stays with me 20 months. And then obviously the longer you're in business, a couple of years, it's like, okay, what every year, what's our churn? Then you can go that way. So then I back into what I think the lifetime value would be. So if you're at 50 % and you're, you said you're three years in yeah yeah so you are probably you're on pace for like six and a half seven years average yeah that's what we figured kind of baked in i mean last year company-wide we had an eight percent cancel rate so yeah and they're they're pretty sticky customers interesting so it's almost like software as a service sass right where you build the product once it's software and then it's really high margin, but it's recurring.

11:02People are charging, you know, every single month in this space with pest control, it's recurring revenue in the sense that they're going to come out once a year. Or is it like, is it a monthly maintenance? Like what does the actual offering look like? Yeah. Different markets, different parts of the country will have different down South. It is a lot of monthly services in Colorado. We just do quarterly. And so we come out once every three months, we break it down to a monthly bill. So it is truly just a monthly subscription that they're on. We come out unlimited times in between for free, if anything flares up.

11:28So as long as we're doing a good job, we just come out four times a year. How much does that cost for like a once a year treatment or I guess the monthly fee? What does that cost? Yeah. Our average right now. And after taking over a company with kind of lower, lower price point and blending it in, it's about 45 bucks a month, one 35, a quarter, one 35, a quarter. And what do they get for that? One 35. We treat the full foundation, usually about three feet up, three feet out all the way around, knock down cobwebs and washness up to 30 feet high, treat the interior if needed and as needed. and then place down a couple of bait stations and that'll take care of the mice.

12:01When you say treat, is that like spraying a chemical or something? Yeah, we spray, spray all that. Okay. So you got a guy out there, sprays, wipes cobwebs, maybe does something inside. What is that? 20 minutes? Yeah. Is it really? Yeah. And that's another reason why door to door is so big and so valuable for us because route density is huge. The company we bought, old school marketing, their customers are spread out all over. We have a lot of drive time and a lot of unbilled hours. In Grand Junction, where we do door to door, yeah, our guys can just be on the same street. Sometimes they put less than nine miles on the van in a whole day of working.

12:43We can knock out 20, 25 jobs in a day at 135 bucks a piece and minimal chemical costs. It's really high margin. Oh my goodness. How much do you pay your guys? What's an average rate for, what do you call them? Are they a tech? Yeah. Technician. Our guys are, depending on how long they've been with us, 20, 25 bucks an hour. All right. So let's say 20 bucks an hour. It takes them 20 minutes to spray. That's going to be a third. So you're looking at like 633 or somewhere in that ballpark of labor spend for$135. Yeah. And then the chemicals are about three, four bucks. So your gross margins are like 120 bucks on the 135.

13:2235. Yes, sir. Oh my gosh. Is that why you pay so well to acquire customers? Because they are so profitable once they're on? Yeah. The big marketing companies, there's so how you talked about, you know, having a door to door team, there's whole companies that do that. And they just run ads, recruit guys, and then they just pimp their team out to whoever company is going to pay the most. They're a sales company, essentially. Yep. They're just a sales company. They just say, hey, I've got 20 guys that'll come out and put on 3 million in revenue for you. And we're going to charge 130 % of revenue and they'll get that.

13:53They'll get 130 % of the first year contract market rate for a team like that is anywhere between 85 and 130%. And big companies, I can't afford that. Sure. Companies, they'll pay that. Why? Just because they know it's proven? Yeah. I mean, it's pretty much buying a$3 million company at 1.3 times revenue. And if it's going to be high margin years two through seven, you'll make your money. Wow. Why don't more people do it then? Is there just a lot of executional risk? Yeah. If you don't have a good service, you're going to have a really high churn rate. If the sales reps are unethical, then you run into those issues getting a bad brand.

14:31If you grow too fast, then you've got$2 million that you have to pay out to these sales reps. And then all the vehicles you bought, new techs, and you just ramped up too fast. Then you got too much debt and you implode. So there's a lot of risk in growing that fast and pulling it off. But yeah, the bigger, more stable companies, Aptiv, Moxie, Hawks, Fox, a lot of these that are in the tens or hundreds of million dollar range. Yeah, they'll do that at a bunch of locations and just take over. Wow. When did you know that you wanted to actually do this as a business as opposed to just sell? During our second year, we were promised a bunch of stuff the second year.

15:06The technicians would be better, service would be better, everything would be dialed in. We came out and right away we started knocking doors and we realized that that was all a lie. everything was exactly like it was the year before. So my business partner, who's my cousin, who recruited me. So were you working with one of these sales companies or were you working for an actual pest control company? We were working for the pest control company just as the sales side. Sure. Yeah. So, so yeah, it was, it was just not a good company. And so we sat down at the beginning of that summer and we said, let's start our own.

15:34Let's do this. Let's, we know the sales, let's spray as many jobs as they'll let us. Let's try to get into that. Let's learn the operations, learn the technology and copy everything they're doing and then do it the right way. And so we spent the whole summer just kind of stealing the playbook. And then year three in pest control is when we launched our own. Is it hard to understand how to do the operations? No, it's a really simple industry.

16:00Hey, dude, here's the address. Go spray their foundation. Introduce yourself first. So you said in the beginning that it's like some companies have to be licensed to do like rodents or skunks or squirrel or whatever, do you have to be a certified technician in order to do treatments? So that's the biggest barrier to entry. And another reason that I love it, not everyone with a, with a vacuum can start, you know, anyone to start a cleaning company pest control, you've got two licenses in most States, a lower license and a higher license, the lower license you can test for tomorrow. And that allows you to go and spray for another company, the higher license, you need three years of experience.

16:36And once you have that, that higher master license, that's when you can start your own company. So to circumvent that, what we did, I had a family friend who had his hire license and we just rent it from him. So we're three years in now and I just barely qualified for my master license like last week. So we can get him off of our books now, but this whole time we've just been under his. Is that a state by state requirement or is that nationally? You need three years for a master license to start a business. Every state's a little different, but it's usually two to three years somewhere in there.

17:04Well, next month, it'll be a year since I started this podcast. I've had over a hundred interviews. It's been a ton of fun, but I promised my wife at some point I would decide whether or not this was going to be a business or we would just continue to pay for it out of our pocket. And I'm exploring monetization, to be honest with you. There's not a ton of costs, but I do want to figure out a way to cover the editing and the packaging and the promotion costs of putting this podcast together. So I am looking for sponsors. I don't know what that looks like. If you've enjoyed this podcast and you've ever found some value and you want to sponsor, reach out to me, Nick at cofounders.com, and let's get back into it.

17:37What did you pay him? So family friend, the first year he said, I don't know, 50 bucks a month. And I was like, dude, this is so far under market value. This is crazy. And I took a minute to respond and he texted me back and said, I talked to my wife, I'll just do it for free. And we're like, no, dude, I'll give you 600 bucks. I'll write a check tomorrow. A lot of places are charging 1000 to 1500 a month. I've seen some guys trying to rent their license for as high as four grand to months out in California. Wow. So in order to qualify for that higher license, you just need three years of experience or is it very like what kind of experience are we talking about?

18:16Yeah, no, if you test for that lower license and then you work for a company for three years, then you just have to take a second test and get the higher license. And that's that's it. You got a 70 percent pass fail. Dude, that's insane. It's almost like you could start a business for this guy renting out his license. And well, and that's where it gets tricky. You can there there are stipulations on how many people you can rent to and how many operators you can have under that license. And so that's where they kind of cap it. So you can't just have a huge organization of just renting your license out, but you can rent it out generally to about three companies.

18:48And if you're charging, you know, a few grand per month per license, like that's not a bad retirement. My experience is in healthcare skilled nursing facilities, you have to be a licensed administrator in order to operate them. And many times what will happen is they'll put a new administrator in there who's not licensed yet. And then they'll take the license of an experienced administrator and put it on the wall that he's operating under. But there is, I mean, there's a risk to that, right? Like the licensed administrator does have a risk associated with it. Is it the same in pest control? Like is, did he take on doing that?

19:17Yep. If we get sued for, you know, killing a kid or killing a dog or something, then, then, then his license would be at risk. And he is supposed to be supervising and putting in, implementing procedures and stuff. So there, there is some risk in that for them. That's why most people do charge several grand a month. So if you have one license now that you can put your, I guess, business under, and you said there's like a limit of two or three businesses that you can do that. Let's say that you wanted to service the state of Colorado, which is where you live, right? And you want to work in Fort Collins and you want to work in Denver and you want to work in Aspen and you want to work in Colorado Springs.

19:52And those are four places right there. How do you service all of those places if you only have one master license? Yeah, as long as we've got the one master license, then if all of my technicians pass their easy little test and they're personally certified to spray, then they can go and do that. So we do have a location in Colorado Springs with two technicians over there. They're both licensed, so they can do the day-to-day and spray. They just couldn't start their own business. So yeah, you just need the one master license to qualify, and then everyone else needs their little licenses under, and they can be anywhere in the state and still just operate under you.

20:26What if you want to go to, I don't know, Montana, Wyoming? Yeah. Then I've got two, two options. Some States you can reciprocate your license. So I'm looking into that now that I just got mine. And if they don't reciprocate it, then you got to start over and either rent from someone or, you know, get a job and get your three years of experience. Oh, okay. Interesting. Okay. That part's fascinating. I knew nothing about this world. So businesses like these, sticky customers, recurring revenue, high margin. What would you say is the average net margin for a company that operates? So, I mean, your gross margin is insane, but like net income on a percentage basis.

21:03Factors like any company. Our first year when we did all the work, when we sprayed and did the door-to-door and everything, we netted 74 % that year. What? Ridiculous. We worked a lot and we were truly owner operators, but it was good. Now that we're built out more, we've got office people in two locations and more overhead. Last year, we were at 28 % margin and we grew 100%. We doubled our revenue. So we're looking, if we ever just kind of stabilize, we're targeting hopefully around 40, 45. But a lot of companies kind of in the growth phase, I see a lot of guys target 30 % growth and 30 % margins.

21:38Okay. So you started this year in year three of this. What was your revenue as year one, two, and three? Yeah. Year one, we did 180K revenue in our first nine months. We started in March. Year two, we did 475. And then this year we were just over a million. Man, that's amazing. What's your current monthly revenue? Current monthly revenue is about 105, 110K through the winter right now. Because we just closed on the acquisition kind of fall. So it's worse time to buy a pest control company. But we're hoping with a little door-to-door team, and we're hoping to double again this year, due to 2 million this year.

22:152 million? Okay, and so your net income, you said this last year is at 28%, so net income right around$300 ,000. Yeah. Wow. You said earlier, customer acquisition costs for these big companies to come out is essentially 130 % of first year's revenue. Is that normal for the rest of the customer acquisition costs that you're currently doing or no? No. So when we target Google Ads and social media that sort of stuff, we're looking to keep it to about 35%. So we're still cashflow positive that first year. We're willing to spend more, but it's upfront is the other issue. If you're spending it on Google ads, you spend$150 and then you get your customer and they pay you throughout the year.

22:59With the door-to-door team, you pay as you go. And so they get the sale and you don't pay the full 130 % commission. You give them a little bit upfront, then either pay throughout the whole year or you give them a backend in like October and then February. So it's a lot more spread out. So that's another reason why door to door is alluring because you can spread out that customer acquisition cost over a whole year. So door to door or for typical customer acquisition, we do try to keep it lower just because it is upfront and because you can blow a budget real quick. On what? Ramping up Google ads that aren't working, putting it into Facebook and spending several grand on a Facebook ad and your phone rings twice from it.