Emergency Steps to Take if You Can’t Pay the Bills at Your Pest Control Company

All businesses go through tough times. Sometimes those are due to unforeseen circumstances like a global pandemic, and sometimes they are due poor planning or lack of systems and best practices. A common emergency a pest control company may face is a cash crunch. Some cash emergencies are more severe than others, but when I say “emergency,” I mean you can’t make payroll or you can’t pay your bills on a regular basis.

If your company is in dire straits due to a cash crunch — to the point where you think you may go out of business — here are a few steps you can take to get things under control.

What to do if you have a cash emergency at your pest company

Please note, these are “break glass in case of emergency” measures. I do not suggest you routinely run your business this way; rather, take these steps only if you need to literally keep the lights on.

  1. Identify which expenses you can slash, and cut them immediately.
  2. Speak with your vendors and try to get them to extend payment terms to you in exchange for an immediate partial payment.
  3. Evaluate all your unused equipment or vehicles to see if there is anything you can sell to raise cash. This step can include factoring receivables, which is an expensive way to finance your business.
  4. Tap personal resources, such as a home equity line of credit or borrowing money from a retirement account.

Again, these are all extreme measures, but if you could go out of business tomorrow, they are steps you can take immediately to buy yourself time to get back on track.

How to prevent a pest control cash emergency

Once you get through your pest control company’s cash flow emergency, it’s imperative that you begin properly budgeting and forecasting cash flow to prevent another cash crunch in the future.

Savvy pest management companies prevent cash flow problems by doing the following:

For more strategies to prevent a cash emergency, see my forthcoming column in the March 2022 issue of Pest Management Professional magazine or listen to PMP Industry Insiders podcast Episode 68 where Donnie Shelton and I hash out this topic.

At PCO Bookkeepers we work with hundreds of pest control and lawn care firms on implementing the above proactive strategies to prevent cash emergencies from happening in the first place. Contact us today to learn more.

Author: Dan Gordon