[Company Profile] All in the Family

Entrepreneur Jay Moran always dreamed of owning his own business. It didn’t really matter what type of business. He only had one requirement. The new venture had to offer rapid growth potential. After all, following a successful career as a trucking company executive, he wasn’t getting any younger.

Today, two decades after purchasing A-Abel Exterminating, Moran leads a "family of home services" under the A-Abel banner that employs 65 people and generates more than $9 million in annual revenue.

And at only 53 years old, he’s only just begun.

THE EARLY YEARS. At first glance, long-time business partners Jay Moran and Chuck Norman don’t look the part of hard-driving corporate executives. Humble and unassuming with an understated air of confidence, they began targeting businesses for possible acquisition in the spring of 1989. "Chuck worked as a CPA for a major accounting firm in the area for many years," Moran said, "so he had a lot of knowledge about the local business community," knowledge that would serve the fledgling entrepreneurs well in the formative years of their joint venture.

They eventually settled upon a modest, family-owned pest control operation with a small but loyal customer base in Dayton, Ohio — A-Abel Exterminating. "We looked at several different types of businesses, but ultimately decided on the pest control industry," Moran said. A-Abel had been in business since 1937, and its owner, who was in his 70s at the time, was more interested in spending time with his grandchildren than in controlling pests.

As is often the case in first-generation, family-owned businesses, the owner didn’t have a transition plan for the company and his children weren’t interested in managing the $400,000 operation. That’s when Moran and Norman stepped in. Where others saw a company with an aging owner and an uncertain future, they saw a diamond in the rough.

Despite being in business for more than 50 years, A-Abel Exterminating was not particularly well-known in southwestern Ohio, although among its small cadre of customers it had a rock-solid reputation for providing quality service. Its "hands-on" owner — still working 10-hour days — was accustomed to doing everything himself, leaving little time for business expansion.

Moran didn’t know much about pest control, but after performing the necessary due diligence he recognized a business opportunity when he saw one. "I came to the pest control industry with no experience," he said. "I knew service and how to deal with employees, but in terms of pests I didn’t know an ant from a spider," he laughed.

Yet he wasn’t deterred, in part, because the company offered such untapped potential for growth. "There was more money in the business than the owner had the capacity to service," he recalled. "We knew we would need to hire people. We would need to invest in trucks and equipment and phone systems, but the market was there. We just had to go after it."

Even more significant, Moran knew he and his partner had the necessary skills to take the company to the next level, growing its market footprint with an infusion of capital and a little tender-loving care. "From our previous business experience, we knew how to compete; how to identify the strengths and weaknesses of our competitors; and how to position ourselves for growth," Moran observed. "We were confident we could make it a thriving business in fairly short order."

ADDING ON. That’s exactly what they did. Upon acquiring A-Abel in 1989, Moran and Norman have painstakingly grown the operation by acquiring service companies that complement its core business, expanding into heating and air conditioning, electrical services, rug and carpet cleaning, and home remodeling. In every case they have either purchased the businesses as a means of acquiring the necessary technical expertise to move into a new service area or simply folded those accounts into A-Abel’s existing service mix.

"In some cases, the key tradesman joins our company as a result of these acquisitions, acquiring a modest ownership stake in the new business," Moran observed. "In others, we may just buy their book of business."

For instance, Jim Cain, who manages the company’s heating and air conditioning business, is the former owner of Cain Heating & Air, which was purchased by A-Abel in 1994. Dan Hill, who closed L&L Plumbing to join A-Abel in 2008, is no longer burdened with the administrative headaches associated with running his own business, focusing instead on growing A-Abel’s plumbing operations.

"The theory is it is better to own a small piece of a big pie than the whole piece of a one- or two-man operation," Moran observed. "They enjoyed running their own businesses, but it can wear you down over time. Owning a small piece of a larger operation is often less stressful than running your own business. It’s the best of both worlds," he said. "We acquire the skills of a key tradesman and they give up the headaches associated with running a business, while still retaining some equity stake in the operation."

It’s also a win for A-Abel, particularly in a market like Dayton, which has been hard hit by the recession and doesn’t benefit from year-round pest control like its counterparts in the Southeast and Gulf Coast. "Pest control is seasonal in this part of the country," Moran observed, "so having a heating and cooling business and a carpet cleaning operation helps even out our cash flow."

"It’s better to make a little bit of money from a number of different services rather than rely on just one area of your business to pay the bills," Norman added. That’s why each business unit has its own P&L and service technicians are fully dedicated to their particular area of expertise. There are no "universal technicians" providing both pest control and duct cleaning services, for instance. "Each division is operated as a separate business unit," Norman said, although all divisions fall under the A-Abel "umbrella of consumer services" for tax purposes.

Customer calls — regardless of service requested — are routed to a single dispatch center where CSRs are trained to cross-sell the company’s range of service offerings. "If a customer has a positive experience with one of our home services, they’ll be more open to purchasing another service from us," observed Moran. "That’s why we’ve built a collection of independent companies — under common ownership — to solve these problems."

The strategy appears to be paying off, with A-Abel growing at a double-digit rate despite the recession as its fleet of 50 vehicles crisscross southwestern Ohio. "Having so many different service vehicles on the road (A-Abel Electric Services, A-Abel Heating and Cooling, A-Abel Exterminating) gives the appearance that we’re much bigger than we actually are," Moran said. "Because of that visibility we’ve grown exponentially."

THE TECHNICIAN’S ROLE. Complementing the company’s army of "rolling billboards" is a "standing army" of technicians who are encouraged to cross-sell the company’s services. If a pest control technician, for instance, notices a damaged gutter or exposed roof while placing a chimney cap on a home, he will inform the residents that A-Abel has a division that can readily address the problem. Likewise, if one of the company’s plumbers notices evidence of carpenter ant damage in a home, they may alert the homeowner about A-Abel Exterminating.

"Most people know a competent plumber, roofer or pest technician, but nobody knows them all," Moran said. That’s where A-Abel comes in. "With one call, customers can be confident that there problem — whatever it is — will be addressed by a competent service technician. When a customer welcomes an A-Abel technician into their home, we want it to be a comforting experience ‘Because It’s Always Something’" as the company’s ubiquitous tagline states.

Even if there isn’t an obvious cross-selling opportunity, every A-Abel technician — regardless of the service segment they represent — is provided with refrigerator magnets they present to customers following each service. The magnets feature a few simple, yet vital A-Abel facts: the company’s phone number, website address and service offerings.

In addition, A-Abel’s marketing program includes a "Pocket Money Coupon Book" that provides discounts for various home services throughout the Dayton area, including all of A-Abel’s offerings. One coupon book is presented to each homeowner following service, driving additional sales.

Finally, a series of online "web coupons" are featured prominently on A-Abel’s website, offering seasonal discounts designed to generate add-on business. For instance, customers can save 20 percent on carpet cleaning if the service is performed at the time of their annual termite inspection. "Cross selling services is not as easy as it looks, but we do a variety of things make our customers aware of the various home services that are available through our company," Moran said.

Moran points out that ServiceMaster, parent company of Terminix, has been doing it for years. However, he says local companies have a competitive advantage over national firms offering home services. "Cross selling doesn’t work as well when it gets too big," he says. Employees need to be engaged in the community and to work side-by-side with their colleagues in other business units, interacting at company functions or crossing paths in the morning before heading out on their service routes. When that cross-pollination occurs, "oftentimes, in a small, locally owned company, you can see immediate results from your cross-selling efforts," he said. "It’s not for everybody, but it has worked well for us."

Looking back on the past 20 years, Moran has no regrets. "I think we would have been successful regardless of what type of business we purchased, but I’m glad we got our start in the pest control industry."
 

*****

Master of All Trades

A-Abel offers a comprehensive line
of home services to meet virtually any customer need. Business units of the
Ohio-based company include:

• A-Abel Heating & Cooling

• A-Abel Exterminating & Pest Control

• MasterCare Carpet & Rug Cleaning

• A-Abel Plumbing & Septic Services

• A-Abel Electric Services

• A-Abel Drain & Sewer Cleaning

• A-Abel Air Duct Cleaning

• A-Abel Roofing & Home Improvement

• South Dayton Fleet Services
 

*****

Termite Work More Efficient With Always Active

Despite the recent recession and the accompanying downturn in the housing market, termite control remains an important part of A-Abel’s pest control service offerings. As such, A-Abel President Jay Moran is constantly looking for ways to increase efficiency and reduce labor costs to meet the company’s bottom line goals, which is why he said he is so pleased with recent enhancements to the Sentricon Termite Colony Elimination System from Dow AgroSciences.

The latest innovation to the Sentricon System is Always Active technology featuring a new bait matrix, annual monitoring and state-of-the-art LID (Locate and Identify) technology. "We’ve been a Sentricon System partner for a long time," Moran said, "and one of the reasons we’ve been so loyal to Dow AgroSciences is they listen to their Authorized Operators (AOs). If we have an issue we would like them to address, they always respond. And they’re constantly asking themselves, ‘What can we do to make the product better?’"

In April 2010, the U.S. EPA granted Dow AgroSciences annual monitoring for Recruit HD termite bait. As a result, the Sentricon System with Always Active technology can help Authorized Operators increase route efficiency and reduce labor costs since they are only required to service Sentricon stations on a yearly basis, according to Dave Maurer, portfolio marketing leader for the Sentricon System.

LID technology is a labor-saving enhancement that helps technicians service sites with no worries about missing Sentricon stations covered by grass or landscaping. It uses a radio frequency identification (RFID) sensor in the top cap to give each Sentricon station a unique identity. The RFID electronics have been used with ESP technology since 2001, making service visits faster and easier, Maurer says.

Scanning a top cap is done with an Interrogator device. It helps technicians locate the Sentricon stations without giving false readings due to metal objects in the soil.

Recruit HD termite bait contains a bait matrix that extends durability throughout all soil conditions. It also contains 2.3 times more active ingredient than Recruit IV termite bait, more than enough to eliminate a typical termite colony. In termite palatability tests, Recruit HD termite bait was preferred over wood and became even more preferable and palatable over time, Dow AgroSciences reports.

Termites can begin feeding on Recruit HD termite bait as soon as they find the Sentricon station. They then share the bait with other termites, beginning the colony elimination process and offering constant property protection from termites.

Adam Hill and Jordan Freshour, two A-Abel technicians who have used the Sentricon System with Always Active in the field, said termites readily consume the bait. "We definitely see a difference in feeding," says Freshour. "We’re getting hits all the time."

The technicians also like that they don’t have to visit accounts as often, which allows them to visit more sites every day and provide enhanced customer service at those sites that require additional attention. "It gives me more time to interact with the customer and solve their termite problems," Freshour said, "which is what I enjoy most about my job."

Dana Dickson, termite systems administrator for A-Abel, says giving technicians more time to interact with customers ties into the company’s corporate culture. "Customers want to feel like our company is looking out for them," she says. "They want a feeling of security when it comes to termite control." For additional information about the Sentricon Termite Colony Elimination System with Always Active technology, visit www.sentricon.com or call 800/352-6776. – Dow AgroSciences