Volunteer profits

Volunteer profits

company strategy by Mark Gordon | Managing Editor

A requirement to have all sales staff volunteer for civic and business groups has paid off for a Gulf Coast pest-control firm.

When George Pickhardt started out in the pest control business in the 1950s as an assistant to his father, the industry was particularly dangerous.

The 12-year-old Pickhardt's tasks included handling and bottling pesticides, as well as preparing cyanide and sulfuric acid traps to catch all kinds of creepy critters.

Other work included joining his dad, Vernon Pickhardt, on jobs to fumigate freight ships docked on Lake Erie outside Cleveland, where the Pickhardts lived.

The business was actually founded by George Pickhardt's grandfather in 1886 near Buffalo, N.Y. Then called International Fumigators, it was one of the first known businesses in the country to be devoted strictly to pest control.

More than 120 years later, George Pickhardt is still in the same family business, now as president of Sarasota-based Arrow Environmental Services, an 85-employee operation with seven branches in five Gulf Coast counties, from Pinellas Park to Fort Myers. Under the third Pickhardt generation, the company has expanded its business to include lawn care, landscaping and irrigation system repair and maintenance.

While the company's $6.5 million in 2007 revenues were not much more than it had in 2006, the figure was more than double its $3 million in 2002 revenues. The company, which was ranked 76th in Pest Control Technology magazine's recent listing of the top 100 revenue-generating pest control firms in the country, has also won annual growth awards for small businesses from the Sarasota and Venice area chambers of commerce.

And as the company has grown, the dangers have evolved from handling chemicals to more common business struggles: The slumping Gulf Coast housing market has stunted the company's revenue growth; the ongoing statewide drought has made lawn work tricky; and the area's still low unemployment numbers have made hiring the right people tough. Constantly evolving and cumbersome government regulations overseeing the lawn care and pest control industry are another lurking challenge.

It's almost enough to make Pickhardt pine for the good old days of 12-year-old boys handling cyanide canisters. Almost.

And then there's the pressure Pickhardt puts on himself and his staff to be as environmentally safe as possible, regardless of the latest trend. "This whole green thing is kind of the buzz word now, but we've always been ahead of things environmentally," says Pickhardt, 62. "If we aren't good environmental stewards, we won't have a business in the future."

The volunteer edge

The future wasn't nearly as bright in 1964, when Vernon Pickhardt fulfilled a lifelong dream and moved to Florida, taking the pest control business with him from Cleveland. The company, then called Arrow Exterminating, was comprised of the elder Pickhardt, his wife Johanna and one other employee. It had $16,166 in revenues that first year.

George Pickhardt, meanwhile, was focusing on the educational side of lawn care and pest control at the University of Florida. He earned a bachelor's degree in entomology, the study of insects, and a Master's degree in ornamental horticulture. In 1972, Pickhardt entered the ornamental horticulture Ph.D. program at Cornell University.

He stopped one class short of his Ph.D., though, as he felt both the pull to come back home to the family business and a lingering feeling that such an advanced degree in such a specialized field would leave him overeducated and underemployed.

In the early 1970s, the company was hovering at about $100,000 a year in revenues and was still comprised mostly of family, including George Pickhardt's brothers, Gerard and Vernie Pickhardt. With George Pickhardt running the science and technical side and Gerard Pickhardt running the marketing side, Arrow Environmental began to grow more significantly.

One of the keys to the company's initial growth, though, was decidedly old school. It was a sales tactic George Pickhardt originally learned from his dad and one he still uses today in a more advanced and comprehensive way: Each of Arrow's six sales employees must be actively involved in three volunteer-based groups and boards, including one civic and one chamber of commerce group. The third group could be religious- or community-based.

When Vernon Pickhardt initially moved the business to Sarasota, he made a point to get out and about in the community, as both a way to do good and to meet potential clients. George Pickhardt, after attending a sales seminar on the strategy, refined it to be more specific and eliminate any overlapping.

George Pickhardt says the forced volunteerism is easily the biggest reason Arrow Environmental has been able to grow consistently - or at least not shrink - through 35-plus years of good and bad economic times. The sales staff spreads the name of the company while developing friendships and relationships it can tap into for business purposes.

"It makes good sense all around," Pickhardt says. "I'm surprised more people don't do this."

The community involvement works both ways, too. Arrow Environmental puts money behind many of the programs its employees are involved in, not just the sales staff. That can range from paying for fireworks at a chamber of commerce event to sponsoring little league baseball teams.

Plan B

By the early 1990s, Arrow Environmental had become one of the leading pest control firms in the Sarasota market with about $1.5 million in revenues and more than 10,000 customers.

That's when Pickhardt decided to take a chance it could grow even more. With money he made from selling a few unrelated real estate properties, he bought out the ownership stakes his brothers held in the business.

And he expanded into lawn care and landscaping, still focusing mostly on existing homes and homeowners' associations, which currently make up about 85% of the business.

The other clients are a mix of businesses and up until 2006 at least, new construction projects, where the company worked on termite control.

"If there's no new construction going on," says Pickhardt, "then there's no pre-construction termite control going on."

In 2005, sensing the housing market was on its way down, Pickhardt sought growth in acquiring other pest control businesses and the entity's customers. He ultimately bought one company in Port Charlotte and another one in Pinellas Park.

If Pickhardt could only solve his other Arrow Environmental worries as simply or in such a feel-good way as having the sales staff volunteer in the community. Pickhardt's three main concerns for 2008 are hiring, the drought and government regulations.

At least when it comes to government regulations, Pickhardt can be proactive and even occasionally utilize his lofty college degrees, like he did last year.

The pest and lawn control industries are technically governed by the state, but each county has its own say in chemical and water usage. Sarasota County, for example, passed an ordinance in July that severely restricted the use of nitrogen and phosphorus in lawn fertilizer products due to pollution concerns.

Since those chemicals were a big part of Arrow Environmental's fertilizing formula, the company had to come up with a plan B to treat lawns. So Pickhardt and his team created a new formula for the fertilizer, using a combination of more environmentally friendly products.

Hiring and solving the drought are somewhat tougher to control.

On hiring, Pickhardt says finding people with the right combination of technical know-how, customer service skills and street smarts is tougher than it has ever been, especially as the industry evolves and chemical experience becomes more crucial.

Getting the skies to open up with rain has proved difficult, too, although that hasn't stopped Pickhardt from trying to find a solution, if only a temporary one.

"At the end of the day, customers want green and lush landscapes," he says. "And we have to figure out how to do that."

REVIEW SUMMARY

Business. Arrow Environmental Services, Sarasota

Industry. Pest control, lawn care, landscaping

Key. Company has grown by expanding services to current customers.