Comment on More on Is RMR enough to survive in alarm business / ISC EAST / help K&K forum grow September 6, 2024

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Comment on More on Is RMR enough to survive in alarm business / ISC EAST / help K&K forum grow
September 6,  2024

thank you for all that you do

          This is me thanking you ….for what?  Reading the articles on this forum; contributing to the articles; supporting those that support the forum, place their posts on The Alarm Exchange and all of you who do business with and support those vendors offering their services on The Alarm Exchange.
          This forum is, I believe, the largest distribution in the security and fire alarm, low voltage and electronic integration industries, and certainly the most read on a daily basis.
          First, let me assure you that the K&K email list is used exclusively for distribution of the articles, which is distributed by two separate bulk mailing services, as many of you know because you get both emails daily.  Emails are sent every day to the alarm industry; there is no charge for the articles.  The classified section, The Alarm Exchange, which is also free, is updated daily as needed, and I believe it’s the largest and most active classifieds in the industry, visited by the most in the industry. K&K does not sell or share the email list with anyone, for any reason.  We retain only emails, no names or other information. It’s free; you can subscribe all the addresses you want and you can always unsubscribe, though you won’t be able to re-subscribe that address.  So your email is secure.
          Now here’s the ask.
          I’d like to make the forum even more available by increasing the distribution, so here’s the “ask” and sweetener added in:
          Send me emails of those in this industry, one email on each line, and we will add them to the list.  Whether it’s your association list, for vendors to the industry your alarm dealer list, employee list, central station list, send it to me pasted on your email or as WORD or XL attachment. [this is not request for alarm customers list - the forum isn't for alarm customers]
          K&K will give you $100 credit against K&K contracts or Concierge Program for every 100 emails.  You can use the credit yourself or if an association raffle it off or use it for promotional purposes.  We will honor the credit to your “assignee”.  Thanks in advance for your efforts and assistance.
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Comment on More on Is RMR enough to survive in alarm business from article on August 28, 2024

Ken
AFS has been around a long time and is a great option to leverage especially if you want to grow through acquisition or through funding low down systems however the financing product that I was referring to was consumer financing to put the risk on the consumer not the alarm company. Lets say the consumer wants $2500.00 in upgrades but cant afford to pay that upfront, there should be products that can offer zero percent interest for a short period of time like 12 months or on option for 36 or 60 month payments with interest. We saw Vivint move to this kind of a model and also we see ADT adopting this again. Back in my AT& T days 75% of our sales were based on a 60 month finance agreement at first via AT&T Universal Credit card we would open for the consumer and later by companies like American Finance, Mercury and Friendly Bob Adams and Citizens Bank. They all disappeared and I was told by a high level source that unscrupulous operators were adding in 36-60 months of monitoring to the retail finance contract and then they went out of business or did not pay the monitoring companies some the account was terminated and the finance company was holding worthless paper. It is disheartening that companies that are supposed to offer safety and peace of mind pull these deceptive practices. This type of financing did three things, It allowed consumers to get proper systems based on their needs and wants, It allowed alarm companies to be profitable on the sale and resulted in a lower monitoring rate for the consumer. Banks spend a lot of money to promote credit cards and other finance products and they are missing this. Make the owners personally liable for fraud as when they were pulling the tactics I stated they were not walking away broke. There were companies doing hundreds of systems a month at around 5K when they loaded the monitoring and equipment all into a finance contract.
Brett

Another comment

Ken,
We 100% agree with Anon. We do not touch anything without recurring. Also, we have been blessed in the alarm industry to be handed many new RMR opportunities, including, video, video monitoring, cellular elevator and area of refuge monitoring.
Respectfully,
Roman

Response

          Except for a handful of large companies alarm companies are valued on the RMR model.  The multiple has a wide range and if you have time before a planned transaction you have opportunity to influence the multiple by using best practices and running a professional company in a profitably way.  It’s not surprising that best practices will end up with higher multiples on a sale.
          With the industry shift to integration a lot of revenue is attributable to sales; large jobs that do not necessarily depend on or lend themselves to after-install RMR.  If that end of the business is most of the business then obviously a different buyer is needed; not the typical alarm company.  As more integration companies engage in the business the opportunity to sell the integration business will evolve.  The likely evaluation for that will be EBITDA, the profit of the company.  RMR will still play a role, especially if traditional alarm business is also conducted.  The Standard Form Agreements are all designed to encourage after-install RMR, including the integration business where the RMR will be for repair service plans and administration, remote access and monitoring.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com