Nikonomics - The Economics of Small Business
118 - How to Start a High-Profit "Convenience" Business (That's Not a Scam) with Chris Koerner
Feb 7, 2025
In this engaging conversation, Chris Koerner, an entrepreneur with a background in pest control, reveals the surprising potential of convenience businesses. He shares insights on high-profit models, door-to-door sales, and the ethics of sales practices. Chris discusses how pest control can be viewed as a valuable service rather than just a necessity and examines the industry’s financial dynamics. He also highlights an entrepreneur’s success with a Christmas lighting business, sparking ideas on innovative ventures that can thrive in today's market.
29:19
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Quick takeaways
- The pest control industry offers lucrative opportunities with high profit margins and substantial compensation for sales, driving interest in convenience services.
- Ethical sales practices in pest control can foster long-term customer relationships and profitability, contrasting with high turnover rates linked to aggressive sales tactics.
Deep dives
The Economics of Pest Control Sales
The financial dynamics of the pest control industry present lucrative opportunities, with many individuals earning substantial incomes through summer sales. It is noted that those involved in pest control can make impressive profits, sometimes generating over a million dollars in new business and receiving significant compensation for their sales efforts, often in the range of 1.3 times the sales volume. The average pest control customer pays about $134 quarterly for maintenance services, yielding a remarkable gross margin, significantly above 80%. This high margin, combined with the long-term customer retention typical in the industry, contributes to the popularity and profitability of pest control ventures.
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