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Legal Ease: Risk Management Part I


By Greg Crosslin
May 1, 2006

Recently, a long-time friend and independent operator called me to tell me that he had decided to sell his decades-old business. He already was in the process of selling the business and had received a request from a potential buyer to produce a copy of all of his risk management guides or plans.

 

My friend asked me what the prospective buyer specifically meant by this request. It was at this point that I realized those of us who provide risk management services to the industry still have a long way to go.

 

Risk management, as defined by academics, is the process of measuring, or assessing risks and then developing strategies to manage risks. On a more basic level, I also heard risk management referred to as how to make money and then how to keep it once it has been made. In all reality, risk management does not merely overlap but permeates every single step of our operations and businesses.

 

First, what we provide our customers is risk management services. We help them manage, control, treat, deal with or otherwise address the risks associated with targeted pests. This applies across the spectrum of services from termite treatment to general pest care, from mold remediation to lawn care.

 

Everything we do to meet these service requirements constitutes risk management of our own business operations, including, among many other functions:

  • How we answer the phone ("XYZ Pest Control, can you hold?" vs. "It's a great day in Destin, Florida. Thank you for calling XYZ Pest Control; how may we help you?"); 

  • How we inventory and store our pesticides;

  • How we input and store our customer data;

  • How we train our employees;

  • How we contract with our customers;

  • How we store records in customer files; and

  • How we maintain our documents.

 

Most successful companies have mission statements defining the why's of their existence. They also have operational procedures and policies detailing the how-to's, when's and where's of accomplishing their outlined goals.

 

Every practice, procedure, treatment protocol and every aspect of how you do things is part of your risk management plan, and accordingly, should be so documented. I realize this sounds like a daunting task, but most already have a risk management plans in place and probably just don't realize it.

 

For instance, when pest management professionals (PMPs) treat with pesticides, they are required to follow labels. They have practices and procedures to follow regarding label adherence in the field, attention to label changes and conducting training on label conformance. This is part of pest management companies' risk management plans.

 

Beyond the labels, even if companies don't have extensive written business policies and procedures, they have general ways of doing things that involves every aspect of their businesses, from vehicle operation and maintenance to cleaning spraying equipment to the storage of customers' files and the billing of accounts. What most need is an organized, centralized location for retention of these items. This is the first step in getting your risk management plan together.

 

For those who don't have written policies or procedures or are concerned that they are too basic or not applicable, I have two resources for your immediate contact: The National Pest Management Association (NPMA) and Lloyd Smigel, Pest Control business columnist, (through his Discovery Retreats). Each provide sound basic polices and procedures manuals to get you started. One size does not fit all, but these are wonderful and inexpensive resources to begin the process. These were designed by PMPs for PMPs.