Paul Giannamore: I’m here with David Clark in San Juan, Puerto Rico. Welcome, David.
David Clark: Thank you for having me. I had a blast so far.
Paul Giannamore: That's great. This afternoon, I had enough to draw out at a beach. I’m excited to go out there. David, you sold the family business, Clark's Termite & Pest Control, in South Carolina. How many years were you at the helm?
David Clark: There was never a day that dad said, “You're at the helm.” I was trying to be a full-time student then he finally told me I couldn't do that anymore, so I had to try to finish and I did get finished. I graduated around ‘91.
Paul Giannamore: When you came in, that was a business doing roughly $250,000 a year.
David Clark: Dad looked at me and said that was his money and if I wanted to make more, I had to grow the business so we could make more.
Paul Giannamore: You sold the business at the end of 2021. You took it from $250,000 to over $20 million in revenue. That's what we want to talk about. You come on board, what the heck did you do?
David Clark: At that point, it was just working. I was trying to get all the work done, get the revenue in, and hire good people. It’s always a challenge getting the right people in the right seat of the bus. Everybody says that, but it is true. I had a nephew who was going to college and he was my first college hire. He'd been working for us over the summers. One of my goals was, “I want to hire a college graduate.” I never hired a college graduate.
He knew the business and he fit in well because he worked on it during summers and stuff when he went to school. I hired him, which ended up being a good hire. My other goal was to hire my best friend. He was an IT guy. He did actuaries for insurance companies. Exterminating company is an insurance company, in my opinion. All we're doing is to insure it against termites. They call it a bond, but it's insurance. We don't want to be regulated by the insurance industry.
Paul Giannamore: Was this Tommy?
David Clark: Yeah, it was Tom.
Paul Giannamore: David, you guys focused heavily on the builder space in South Carolina. Why?
David Clark: It’s dad's idea. Everybody totally moves crazy for doing that and spending that kind of money dealing with the builders. As I looked at it, you want to build a renewable business. That's what I wanted to do. I wasn't worried about pest control as much as I was building the renewal business termite side, which was the opposite of what most people do in the exterminating business because of the liability.
With Tommy and the actuary part of it, we started watching those numbers and then started focusing on how we can pick up as many of those termite renewals when we do the pretreats. What we focused on for about ten years is doing all that and getting the processes right because it goes back to a process. You think of McDonald's. Why do people eat at McDonald's when they know they're going to get the same food no matter where they're at? It’s the process. We developed a process for ten years, which is constantly evolving. You get better ideas and new products come along.
There was one point in time when we almost got out of the pretreat market. When everything went from liquids to the borate, dad said, “Let's not stay in that. We're not going to do that.” Brandon was working for me at that point. I said, “Brandon, take this, go out there, let's do one, and see what the process will be like.” They wanted you to go out there with a five-gallon bucket and a drill and mix it up.
As many pretreat as we were doing, that one got to work. You couldn't get enough of them done. I came up and built a premix tank to premix it all in so the guys could load the chemical before they leave, and then they could go out and spray it. Then unload it when they come back in and clean out their tanks because that stuff is sticky and syrupy. Dad said, “Don't do it.” I stuck with it. I thought the plan was good and the model was good. That's what I thought and it ended up working out.
Paul Giannamore: You always talked about, as you grew that business, trying to allocate your advertising dollars. You used to say, “I can advertise here or there,” or, “I can dump those advertising dollars in building relationships with the builders and doing these pretreats.” Why did you focus on the builder relationships in the Carolinas?
David Clark: Dad started that way and I saw that it was working. Whether you spend 2% or 3% of your annual revenues or advertising, I started looking at those dollars, “Should I do that?” I want any kind of method. It was just like, “I'll just spend those dollars on these builders and pick as many up as I can.” We got some good local builders who ended up being regional builders, which helped us a lot.
It was difficult going into those other markets when you don't have the money. You run them from Colombia until you get enough work. Most people start their exterminating business out of their house. My son went down and started our Buford-Bluffton-Hilton Head-Savannah branch. That's exactly how he started it, right out of his apartment. Just him. Right before we sold, he'd done it in eight years where he had three technicians and hired a girl in the office. It takes time. You’ve got to be able to invest in that.
Paul Giannamore: We get to 2021. You've got a business that's extremely recurring. You've got all this recurring revenue, but you're doing a lot of this with your builder relationships. Across the US, I see a lot of companies that do pretreats. When I talked to Mike Rogers, a buddy of yours, way back in the day when he started Killingsworth in North Carolina, he said, “I woke up one day and I was doing $5 million a year in pretreats, but I had no recurring revenue because I wasn't selling any renewals on that.” I hear you talk a lot about a similar thing that Mike talks about, which is you do the pretreat through the relationship with the builder and now you own that house. I'm a customer now and I'm in the house, what happens?
David Clark: The paperwork. I had a builder tell me one time who’s a good friend, “Dave, you don't sell me service, you sell me paperwork. I just need the paperwork. I don't care what goes from there.” Some do, some don't care about what happens once they get the house built. A lot of them care about how much the renewal is, how much you charge pest control, what does it cover. Some of them do and some of them don't. It just depends on the builder.
We put our focus on our paperwork. You want to make it simple to do business with you. What I tried to do and with all the guys’ help, we came up with the paperwork. We made it easy for the customer to choose. When you’ve got your paperwork, you'd look at it and it's straightforward. “I’ll take this box. I’ll take that one.” Send it in and it's done.
We were successful with that, but we weren't successful enough. We were at a point where we'd started messing with that a little bit more. We did it for ten years, then we started focusing on growing and let the paperwork keep doing what it was doing. We were getting probably 45%, 50%, 55%. We made the paperwork a little bit better. We got up to about 65%.
Paul Giannamore: What were these services?
David Clark: Termite and pest control. We started focusing on pest control and said, “We got all these termite renewals. We should have more pest control than what we have.” We started changing gears and trying to pick up on the pest control side of it. We started gaining about 35% in paperwork, not anybody selling. That helped me a lot.
We were fixing to revamp the sales program because now you have mosquito control so you had to change your paperwork to say that you can pick up mosquito control, you can pick up fire control. We tried to put everything in there. We started looking at it and were like, “That's too complicated. Let's keep it simple. Let's give them three things, termite, pest control, and mosquito control, and combine them together in a bundle.” You get a cheaper price for bundling, you get a cheaper price for paying upfront, you get a cheaper price paying a year in advance. It was all in the paperwork.
Paul Giannamore: When you talk about this paperwork, this isn't the closing documents. I go and buy my house, I get a bundle of paperwork, and your house has been pretreated by Clark's Termite & Pest Control. To continue the service, you can have pest control and termite services.
David Clark: That's what it is. You just get the paperwork. It's all in your closing package. We found that we were picking up about 65% just off the paperwork. Our next focus was going to be that 35%. We started working on it a few years ago, coming up with that touch process. Your paperwork would be the first touch. The second touch would be maybe a postcard, “We haven't got your paperwork from you.” You need to fill it out and send it back to us so we don't have it still in the builder’s name. We need your name.
We don't have to pay you anything because you have to guarantee it for a year anyway from the time the builder moves in. Coming over was another challenge because now that's not the problem. Houses sell so quick. Back a long time ago, a builder might have a spec house sitting for a year. Now we got to do a renewal on it because it's been a year. Course Builder doesn’t want to pay for a renewal. More of those advertising dollars go into, “You haven’t got paid a renewal on it, but we're going to do an inspection and charge them $35.” Something that'll cover our costs for being there so we have the opportunity to pick up that customer, the homeowner, once they buy it.
Not everybody's going to buy it. Our discussions were, “When do we give up? When do we say, ‘We're not going to sell to them.’ How long are we going to keep sending them stuff and sending somebody out there? When do we cut our losses?” That's all the stuff that we were coming up with, but I sold it so it's not my problem.
Paul Giannamore: How instrumental were these builder relationships doing these pretreats and then selling these services to the new homeowner? How instrumental was that whole process in growing Clark's?
David Clark: It was 90% of it. I can even say 100%. That was instrumental for us in getting there and getting there quickly because the housing market blew up. Especially in the last several years, it's blown up. You also have the downfall if the housing market falls apart, then all of a sudden, everything slows down. In 2007, 2008, we had a housing crash.
Paul Giannamore: What happened then?
David Clark: We kept growing.
Paul Giannamore: How?
David Clark: The residual from all the houses that we were doing because you're a year behind. All the houses that were built before we were coming up, it did slow down. We did keep growing. We didn't see it in our growth that it affected us that much. It gave us time to take a breath. It’s like, “We've been hammering the same for ten years and we needed to break.” We refocused and that's when we said, “If this happens again, we've got to have other services to take the place of this revenue.”
We added wildlife services and we started going after moisture control, which we have always done. That’s part of being a full-service termite company or pest control company. That's all part of it. You're a homeowner and you trust us already, so why not do those things? With our construction side, we used to tell people, “Here are three names. Call them. Don't call us. We don't do that.” Inevitably, they would mess up and they’d call us. “This guy messed us up.” It's not us.
Dad said, “If I'm going to take the phone calls, we're going to do it.” That's how we got into all those other things, which helped with your relationship with the builder because if the builder builds a house and a customer finds out they got water under it, we can do that for the builder. Us doing a free pretreat might be okay but over here on the other side, we're doing all their drain work, we're doing all this stuff. We're collecting more revenue.
They've got all their offices and all that stuff. They've got to have pest control at those. They've got to have other services at those. You end up selling the builder on those other things. It might be doing a free pretreat, but I'm not doing the pest control for free. I’m probably giving a good deal on it. You're seen in the neighborhoods, your trucks are seen, you're doing the work for the builder. They bought the house from the builder. It's a great relationship and it's something that you have to protect.
Paul Giannamore: All of these pretreats, as these builders are building out subdivisions, are free to the builder. You guys would come out and pretreat it. How much would it cost you on average to pretreat a home?
David Clark: If you go from liquids to baits to borates, it depends on which product you're using. We started out with liquids. If you'd told me years ago that I'd be a bait guy, I’d look at you and say you're crazy. No way I'll ever do baits. We are a bait company now. It's a lesson based on people liking it better and it's green. It’s not all about what you want a lot of the time or what you feel is the best thing. It's what the consumer sees as best.
I had a guy that had a huge car lot and he said, “I’m buying all these cars and I can't sell them.” One day I said, “I'm going to buy these two pieces of junk.” It’s what he called them. I put them out there and they sold quickly. I learned a valuable lesson there that if it’s not what I want, it’s what they need and what the consumer wants.
Everybody likes this green stuff like citrus pesticides. They don't want you putting chemicals in their house. You got to look at those things. Consumers are busy now with their kids, baseball, traveling, and all that. They won't have to meet the pest control guy. How do you formulate things to fit into that realm and separate you from everybody else?
Paul Giannamore: When you would put bait stations in from a pretreat perspective, what happens is if I come in, I buy the house from the builder, I'm in there, and I don't renew the services? Would you guys physically come out to remove the bait stations?
David Clark: We did at first. We take the whole station out where we're leaving holes in the yard. Then we have to take dirt around and say, “This is ridiculous.” I had one guy tell me that he ended up getting sued by a homeowner because he took a bait station out and the homeowner put a ladder on it and it fell over and he got hurt. I was like, “I don't want that to happen.”
What we started doing was taking the bait out and leaving the actual unit in the ground. If they get termites one day, hopefully they'll call you back because you did a good job of trying to tell them they needed the service and all of that. If they did get termites, they’d call you back. The bait stations there, all you’ve got to do is put the baits back in. You might have a hard time finding them, but usually you graph it out.
That's the hard part, people say, “You just do free pretreat. It's easy,” but what about the process of going out and getting it done, covering up the holes. Are you going to take them out? Are you going to leave them in? It's a learning process because you start doing it and then you're like, “That is not working too well. Let's change a little bit.”
Paul Giannamore: What about relationships with realtors?
David Clark: We did play a lot in that space because you have to do termite letters. That's what realtors referred to at that, but the technical name is CL-100. In South Carolina, everybody has their own. Georgia has their own. South Carolina has their own. North Carolina has their own. Those are the only states I knew about because it’s the only states operated in. Some of the states use a national form, and then you'll find out the mortgage company will be in New Hampshire.
They will be doing the closing on it and they want that national form. We can't use that national form. We have to use the form that the state of South Carolina says we have to use. Getting those people to understand all that, you have to get on the phone with them and say, “We can't use that form because they got a paralegal that's going through a checklist.” “I got to have this form. That's what I got to have.” “This form takes place in that form.” You have to explain that, little things like that. The real estate market is important. The housing market in general, everything to do with it, selling, buying, and all that stuff.
Paul Giannamore: With regard to real estate agents on aftermarket deals doing termite letters, if I understand correctly in the southeast, I go out, I'm selling a house, and before the deal can close, there's got to be a termite letter that is an inspection. You fill out a document that says, “No termite issues.”
David Clark: That's what people think, but it's a lot more than that. Are there any beetles in the house, termites? Is there a moisture problem? Not every state is that way. South Carolina is, so you got to look for water, you got to look for all that stuff. Hence, being in all the other services, you find the termites, you find the damage, you find the water under it.
It ends up being a one-stop shop for that real estate agent because if you're a real estate agent, you want to go to the next sale. You don't want to have to meet 5 or 10 people over there to get that one house sold. “Now I got to meet the drain guy.” “Now I’ve got to go meet the construction guy.” You got 3 or 4 different estimates coming from 3 or 4 different people, and you're going to chase all that stuff down. It makes it easy to do business with us.
Paul Giannamore: You built the business around solving the issues that a real estate agent would have in selling the house. “We can take care of all of these different issues.” Do you do termite letters for free?
David Clark: We charge for them. We don't charge enough. A home inspector gets $250, we get $75. That number should be higher for us, but the market dictates what you charge.
Paul Giannamore: A typical home inspector in South Carolina, for example, can go out and do the same CL-100 termite letter. Is that correct?
David Clark: No. A home inspector can't do it unless he has his license. 7A license is what you have to have in South Carolina. If he has that license, he can. Most of them don't. Most of them just say, “You need to see a termite guy.”
Paul Giannamore: When you guys are building that business over the years, are you building relationships with both realtors and home inspectors, or do you focus more on the real estate agents?
David Clark: Mostly on the real estate agents. That's the way the Colombia market was. As we started going to other markets like Charleston market, the real estate agent usually handles telling the customer who they need to get. As we went to the Buford market, Jamie called me one day and said, “Real estate agents don't pick who does the termite letters. The closing attorney is telling them.” We found in that market, it was two different people. Sometimes it’s real estate agents, sometimes it was the closing attorney. In that market, you've got to go to the closing attorney and the real estate agent.
Paul Giannamore: How do you build relationships with these service providers, the attorneys, the real estate agents? What's the trick there?
David Clark: The associations. You got your Home Builders Association. They're called different things. We changed the name of the one in Colombia. A year after I was president of that association, I changed it to Building Industry Association because we thought homebuilding was narrowing our focus to just homebuilders. We want to bring the commercial guys, the renovation guys. We want all of them to be part of the association. That's why they changed the name of that.
The attorneys have an association or a thing that they’ve got to do. You've got to be involved so you can make contacts. That's what we did with our managers. Brandon, my nephew, came to work for us. We picked on him and called him our entertainment director because he did all that stuff, which is important.
People think, “That's a cushy thing to do.” It's not a cushy thing to do. You're out at night entertaining people, taking people to dinner, going to association meetings, and getting involved on their boards. All of a sudden, you're caught up on all these boards and doing all these things. It's in the community, so it helps build the brand of your company.
Paul Giannamore: You put your entertainment director and it goes out to all of these different functions and associations. I know in real estate, you've got RESPA and all sorts of acts that restrict kickbacks or referral fees. Does it come down to being the guy that's in front of these folks, get service done quickly, get done right?
David Clark: Exactly. You hit the nail on the head. That's what it is. When they’ve got a problem, they’ve got one person to call and it gets straightened out for them. They don't want to call a number, “I got to switch you to this guy or that guy.” I want to be able to call the man and make it happen. We all have our phone numbers out there to those people so they can call you. If they’ve got a problem, you get it straightened out for them.
Paul Giannamore: David, when you sold that business, you were one of the largest pest control companies in the United States. You built that through the team you had and the relationships you had with the builders and the real estate agents. What are some other things as you look back over your long career, maybe some mistakes that you made, maybe some things that you did well that maybe you didn't expect?
David Clark: My whole goal was to get out of the exterminating business but it didn't work out that way, which I thought was funny.
Paul Giannamore: It turned out to be great for you.
David Clark: That's a hard one because I made so many of them. “We're going to make mistakes, but let's make a decision and go with it. We can’t always punt.” You’re going, “That isn’t working. Let's move and go in this direction instead.” That's being agile, being able to change and change quickly. It says a lot because a lot of the bigger companies don't do that. They grind along slow. To be able to make a change and make it happen in a couple of months makes a difference.
A lot of people say, “You need to plan more.” That was funny. I kept telling them I want to get the lawn treatment business, not the landscape business. I wanted to get the lawn treatment because I thought it fit well. We send the guy on the truck and he puts out chemicals. What does a lawn treatment guy do? He gets in a truck and he goes out and he puts out chemicals. We're good at that. We should be able to do good at that.
It was when TopChoice came out. I can't remember who had the product but it was fipronil. They were introducing TopChoice so I was down in Orlando, Tampa. That thing kicked off. I'm sitting there in a meeting and my phone rings. It's dad and I'm like, “He knows I’m down here. I'll call him when I get out of the meeting.”
About 5 to 10 minutes later, it’s ringing and it’s dad, “Let me walk out and see what's going on. Walk outside.” He says, “We're in the landscape business now. We’re going to be partners with this guy.” “Dad, we're not ready. We don’t have any plans.” “You plan too much. Sometimes you just have to go at it and do it.” That was dad’s attitude, “Make a decision. Go at it. Figure it out as you go.”
I'm willing to plan a bit more than what he did. It’s not like, “We're going to do it and we'll figure it out as we go.” I want him to have a plan in place. That’s not how anything ever worked for us. We never had a plan in place because, honestly, we didn't have any money. We were scraping by. It was tough.
Paul Giannamore: I remember you telling a story about how your father's got the trucks repossessed.
David Clark: I was probably 3 or 4 years old when it happened. He told me about it later. My uncle and my cousin were working with us then and they said they pulled up the red light. They told him to get out of the truck and they took the trucks. He probably had three trucks at that point. There weren't many. He said they took the truck. When he found out where the trucks were, he cut the chains in the gate, took all the trucks back from their house, and kept working.
He never told me what happened or what they did, but he said, “I took them back.” I said, “You couldn't take them back.” He said, “Yeah, I took them back. How can he expect me to pay him? If I don’t have the truck, I can't make the money to pay him back. I'm trying to pay him. I'm doing the best I can. We got to live, too.” It was struggles like that, cutting power off, cutting phones off, not being able to cash checks for six weeks because you didn't have the money. You’ve got to make sure people get paid before you get paid, the struggles that people won't see. “You're lucky you got this $20 million business.” It didn't start out as a $20 million business.
Paul Giannamore: As you grew that thing, that business has 200-some odd employees now.
David Clark: We have 240 employees and 160 trucks. In 2007, 2008, it was the crisis before that in the ‘80s, we had three STM trucks and one truck that was a construction truck. I remember seeing them sent by an office. We will make the payment notes on these things because it's just me, dad, and my cousin working at that point. We made it through it, made the payments, kept the trucks. When everything started rolling again, we had the truck sitting there and we go to work.
Paul Giannamore: How has it been for you as you've grown this business to go from a few employees to now a couple of hundred? The level of complexity in a business like that is dramatic.
David Clark: Hiring good people, making good hires. It wasn't like, “I hired this guy and he was the best one ever.” It takes you 3 or 4 to get to the person that you need, or at least that's what I found. If you're out of work and you're trying to get everything done, you don't have the time. You got to say, “These are the three candidates. Let's take this guy and see how he does.” A lot of times, people get a warm button to see because we had so much work and we haven't got it done. That's what we promised people.
I was in the mold business and we had a crew where we'd clean mold from crawl spaces and all that. My deal always with my builders and customers was, “I'm going to do what I'm saying them to do. I'm going to be there and I'm going to get it done and I’m going to do it right. If I don't get it done right, I'm going to go back and fix it.” I couldn't keep a crew together.
It was during the COVID stuff, people get paid to stay home, while I want to go crawl under a house and clean mold off. Why don't I want to do that when I could sit at home and get paid, probably more than I would be paying somebody to go under a house and wipe molds off a wall? I quit doing it. I called the builders and said, “I can't do it anymore. I can't keep a crew together. I can't do for you what I promised you I’d do.” They all understood that. In fact, I got a $14,000 check to give back to a builder where he paid me to do stuff I never did.
Paul Giannamore: A lot of the guys that follow this show were like you years ago, young guys trying to grow a business. A lot of them don't have the money to do the things that they need to do and it's tough. You got a lot of great advice from your old man, so what advice would you give to some of these younger guys trying to grow these businesses?
David Clark: Dad made this word up, sticktoitiveness. Whether he made it up or not, I don't know. I always thought it was funny. There was more than one time I told him I was quitting. “I've had enough of this. We don't have good equipment. We don't have this. We don't have that. It's not worth it.” He looked at me and he said, “The easiest thing in the world to do is quit. Everybody can quit. ‘I don’t like my boss anymore. I'm quitting. I'm finding another job.’ When you start a business, you can't quit. If you quit, then the business goes away. You got to stick to it. You’ve got to have sticktoitiveness. It takes a special person to do that.” It does take a special person and a special wife to stay behind you while all of that is going on.
Paul Giannamore: You were immensely close to your father. Still to this day, you talk about him. I know you lost him a few years ago. I lost my father at the same time. What was it like to be able to work with him on a day-to-day basis? What did that mean to you?
David Clark: Like anything else, it was a struggle because not only he’s your dad, but he's also your boss. It's hard to separate the two, but we did a good job of separating. Going on family vacations, which we didn't do much in the beginning because we didn't have the money, when we got to where we were making a little bit of money, we tried to say, “We're not talking about work,” but we always did. It always came up. We'd be sitting around having a drink or whatever and work would come up and ideas would come up. I used to think it was a punishment but looking back, it was a blessing.
Paul Giannamore: It's one of the greatest rewards to be able to do that.
David Clark: They have my son work with me. It was a blessing. I'm sure he probably thought the same thing, “Dad, you're an asshole. Why do you have to be like that?” Our biggest argument was over computers. He was old school, paperwork.
Paul Giannamore: I remember these stories.
David Clark: He wants to say, “I want the IRS to see what we're doing. They can't come in here and rage your computer.” Dad keeps up with everything in his head. He was smart. He graduated from high school when he was 16, went to the University of Chicago for two years, and ended up joining the military. That's how I ended up in South Carolina. If it weren't for Fort Jackson, I wouldn't be here because dad would have never ended up in Colombia.
Paul Giannamore: Where’s your father from?
David Clark: He's from Florida, went to Chicago, then to South Carolina. That's how we ended up in South Carolina in the exterminating business.
Paul Giannamore: He probably didn't sound as funny as you do when he talked.
David Clark: He didn't. He was a little bit more articulate than I was.
Paul Giannamore: I’m talking about the accent.
David Clark: His accent was not as bad as mine. Everybody says I'm from Texas. Nope, I’m not from Texas. He was selling insurance and that's how he got into the exterminating business. He met a man named Mr. Kaiser because we owned a company called Arrow Exterminating, too. Dad had worked for Mr. Kaiser. Mr. Kaiser also sold tractors and all this. He had a place called the Tractor Mart. He owned a bunch of property around an area that grew quick. Mr. Kaiser did well.
His son didn't want to do the termite pest control. He wants to do the tractor business. Mr. Kaiser told dad that he could run his and try to start his own at the same time. He did that for a while, but then he finally bought Mr. Kaiser out. Arrow was bigger than Clark’s was for a long time. He had to keep the name for a time. You know how that stuff works.
Dad bought companies too, which I didn't find out till later because we’d always built everything through organic growth, which is what everybody calls it. Mr. Kaiser and dad were buddies, so Mr. Kaiser financed it for him. He paid Mr. Kaiser for it because he didn't have the money to go out and pay for it. We ended up with that company and grew from there. Eventually, Clark’s outgrew Arrow. It was only 3 or 4 years that we got rid of that name.
Paul Giannamore: Why did you end up getting to the point in 2021 where you sold the business? What was behind that decision?
David Clark: I’m 60 years old this year, 2022. How much longer am I going to do it? What does it mean to the family? Am I giving them a burden or am I giving them a blessing for the business? I always had the idea that maybe one day we would sell, depending on what your kids decided to have. I have three, two boys and a girl. The oldest one is involved. The middle one is a social worker, so he's not going to be involved. The other one doesn't know what she wants to do yet. She's trying to figure that out. How do you fairly distribute it?
You talked about Mike Rogers earlier. I talked to Mike a lot about builder markets. Mike went in a different direction. He took his advertising dollars and advertised and stuck to Charlotte, which in hindsight, was a good business model. It’s two different philosophies and they both worked. You’ve got to decide, “Which direction am I going in?” Go ahead and go at it hard. That's what I tell anybody.
It's not an 8:00 to 5:00 job when you own your own business. It's from sunup to sundown, and sometimes a lot after sundown. You're gone a lot. You're in a lot of meetings. You have to be involved in all of that stuff. It takes your time to do that. The people want to see you. They don't want to see somebody else.
Paul Giannamore: I realized that every time I send the Mexican to a meeting in my stead…
David Clark: That might be the Mexican in that. He's good. Everybody enjoys Mex.
Paul Giannamore: He's a great guy. He's wicked smart and pure entertainment.
David Clark: He's fun to be around.
Paul Giannamore: If you could do it over again, would you go down the builder path the same way you did?
David Clark: I might modify it a little bit. We had a builder that built a lot of starter homes. Once Tommy came home, we kept the information, garbage in, garbage out. The information going out is only as good as what you're putting in. We were tightening up, putting the information into the system so we could get the reports that we needed.
We had this builder that was building starter homes. We weren't picking up 15% of the work getting termite renewals. You start looking at those numbers, “I'm losing money here.” In essence, we're going to fire them. We're going to tell him we didn't want to do their work anymore. Luckily, they pulled out of the market because they weren't doing too well. We didn't have to do that. I hate doing that.
I like to tell people it’s not going to work anymore, or at least I. I feel like I failed at something, which I failed at a lot of stuff. We did stucco, which I had to keep that stuff down . It does not fit with us well. Me and him had an argument and he told me, “We won't do it anymore.” I looked at him and I said, “That's what I've been waiting to hear.” I'll walk right out the back door office and tell the guys, “We’re doing this no more.” They're not doing it anymore.
Paul Giannamore: David, you mentioned Tommy. I want to talk a little bit about Tommy and Andy. I’ll start with Tommy. You guys had pictures of yourselves in pajamas together when you were 3 or 4 years old. You guys are lifelong friends.
David Clark: They put us in a playpen together right when we were born. We lived across the street from each other. One of my goals is to hire him because he got his IT degree and I knew that I had to get a handle on how much we were picking up, how can we get better about picking up the customers and making that customer base.
When Tom first started, I said, “Let's get the customer base up to 1,000.” We hit that then it was like, “Now let's get it to 3,000.” When I sold, we had 30,000 people in our database. People won't look at that, but that database is worth a lot of money. You might not have the client anymore or that house might have been sold and somebody else owns it now, but you've got a great database of information if you put your information in good to teach you what you need to do.
Paul Giannamore: Tommy was instrumental in building that data.
David Clark: Yeah, and helping with the paperwork. There were a bunch of people down the line that aren't with us anymore that helped get us to where we're at, my uncle, my cousin, and a guy named Bobby Bane that has his own company that worked for us for years. Back when Dad told me to take over because his wife passed, I went to Bobby and said, “You got to get into this meeting.” He looked at me and said, “I'm not going to do that.” That was my first challenge. I called dad and said that. Bobby has been with us for a long time and he's older than me. I didn't feel like I could tell him.
Dad had looked at me and said, “Either you can call him and tell him either he's going or he's fired, or I can call him and tell him that.” I said, “Dad, let me handle it. Let me do it.” I didn't tell him that, but that's exactly what dad would have told me. I said, “Bobby, you need to do this and these are the reasons why.” He ended up doing it.
Super nice guy. He watched me grow up. He probably started working for us when I was probably about 8 years old. He was part of it. My uncle was part of getting us to where we are. My cousin taught me how to do termite work. I rode with him. I remember our termite renewals were $35 and we hit $1,000 in a week. It's a record. Now, that's easy to achieve.
Paul Giannamore: David, your business philosophy is a little bit different than a lot of folks because you've worked with your father, your uncles, cousins, you got your best friend working in the business. Even in Georgia and the Carolinas, you tend to be a friendly competitor. You are friends with all these guys and you like all these guys. All these guys are out there toiling. They're your friends, they're your competitors, but you're not one of these guys who's trying to assassinate them. You want to see them all succeed and that's been your philosophy.
David Clark: As an industry, I can't do all the work. You've got good competitors. You got a good market to play in. I've learned that from home builders, being involved with the home builders and seeing how they're all competitors. They all come together and talk about things that the industry needs so far as regulation and all of the things that go on in the industry.
The pest control industry is the same way. I look at the pest control industry as the last family farm business because, in South Carolina, most of them are family-owned and operated. Even the big terminates in South Carolina are family-owned and operated. It has been for four generations now and we were going to be on their third generation. That's how I see it. I am buddies with all those guys. They're good people. Do I like all of them? No. Do we all get along all the time? No, but in the end, we are friends. I talk to them, “What are you doing?”
Mike Rogers talked to them a lot, Craig Heath, Steve Leidenger with Home Pest Control, Buster Dallas down at the beach with Strand, the Brunsons. All kinds of people that you talk to all the time and run stuff off of. “What do you think of this mold stuff?” Or give them a call and say, “What about with COVID? We got all the fog and machines. We can go in and fog and clean up. Are you going to do any of that? What do you even think about that?” Those kinds of things that you all talk about with each other, even though you are competitors.
Paul Giannamore: One of the biggest joys for me in working with your team is number one, seeing how you dealt with your team, seeing how you took care of these people. You probably followed in the same footsteps of how your father dealt with the people because it's usually the founder that ultimately sets the culture. The decisions the founder makes and the way the founder behaves, people try to emulate that. You probably emulated your father. You have been spectacularly successful in growing this business.
I know that you had 240-some odd employees over there. It wasn't just you. Throughout this process, I got to spend a lot of time with Andy Strickland and Tommy Miles. We talked about Tommy, you guys were in the same playpen together. Andy was your CFO. Without these two guys helping you build that business, specifically helping you through this M&A process, which is a royal pain, if it wasn't the most competitive process of 2021, it was neck and neck. You had a ton of different acquirers vying to buy this business. It was a scarce and unique asset. You have built up some unique capabilities. I know it's not just you, it was your entire team. What was it like working with Andy and Tommy?
David Clark: Most of that work was on them. Tommy's the one that gets all the information out of PestPac, information in. The processes, which we developed, are Tommy, Andy, and Brandon. Brandon is the social director, but he's keeping a close eye on those real estate agents or builders and those relationships, keeping those good and strong.
I mentioned one of the competitors here in Colombia. He started doing free pretreats. That's how we got there. He told me I was doing them for free because I was given a rebate but they were paying me. Brandon helped do that. We had a lady that dad had hired and worked with us for a long time. She was more of a bookkeeper than a CFO. When it came time to hire somebody that could take us to the next level, Andy was the one we ended up hiring which was one of those hires that were like, “I made a good decision there.”
We hired somebody before Andy and he meant to leave. We made him look through all the candidates and get it down to three, and then from there, we said, “We'll take Andy.” That's where Andy came along. In order to put everything together on the financial side, you definitely have to have a strong CFO. Andy was definitely that. He was good and instrumental. You have to ask Franco because Franco worked with him a lot, and Tommy a lot.
Paul Giannamore: I might not understand Franco's answer. David, welcome to Puerto Rico. We'll have an exciting weekend with you and your lovely bride. Thanks for stopping in the Boardroom.
David Clark: Thanks for having me. It's been a blast. I look forward to doing some more.
Clark's Termite & Pest Control