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Question - financing RMR - where on The Alarm Exchange should you look

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Ken

    I have a question related to the alarm exchange [financial category] and the services listed. I am a soon to be independent company. In fact in a couple days my contract is up. I'm in the process of securing some type of financing for my new company and have discovered several companies that do loans against the

monitoring contracts. The programs are called all different names like "equity builder" for example. My concern lies on which company to do business with. What's your opinion on RMR Capitol in Wisconsin, or AFS ?

    Would appreciate a real answer not a political correct answer. Lol  I know you probably won't have first-hand knowledge of these companies but you are in the circles that would know and you could say something like "stay away from here" That's all I'm looking for, I promise not ask why or keep it

conversation going.

 Thanks

anon

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Answer

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    I suggest that you check out all of the companies in the financial section of the alarm exchange; try to find one that lets you keep your subscriber contracts when the loan is repaid.  if you're going to sell your accounts you may as well get a sales job now and save yourself the aggravation.

    A listing on The Alarm Exchange is not an endorsement by me.  It means that I do recognize the vendor as someone in or who services the industry, and it also means that I have not received complaints from alarm dealers about the vendor that has not been addressed by the vendor.  Thus the listing does assure at least some accountability, albeit on a grass roots level.  

    While I am not a fan of financing, that is a personal business preference I have [I am a United States Bankruptcy Trustee, so that might affect my thinking about allowing yourself to get into debt].  I do recognize that even a solid business model can include financing the RMR so that the company can grow at rapid pace.  There is probably some validity to the notion that either you're well capitalized, have financing plan in place, or grow slowly.  Long time ago alarm companies were started by individuals with business spirit and know how for selling and installing alarms; the companies grew by hard work, taking risks employing more in sales and installation personnel, and some of the faster growing by acquisitions, often financed by the seller.  The owner had a background or experience in alarms.

    Today the fastest growing alarm companies are owned by business people, sometimes with no alarm background.  What they know how to do is raise money and they have focused on the RMR model in this industry.  Their background is in sales and business, and these companies have come on the alarm scene over the past decade to take dominant positions, gnawing at the heals of the giant ADT.  Some of these companies pose as finance companies, but I think they are really financially backed business that are in the business of acquisition of RMR contracts.  Nothing wrong with that, but when a dealer is really looking to grow and end up with a pot of gold at the end of a career, selling away your RMR as you create it may not be the best long term plan.  Whether you're selling your RMR or retaining it, keep your eye on maximizing the value of each RMR contract.  You do that by using the Standard Form Contracts.
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follow up to whats a qualified RMR account from March10, 2014

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Ken:   

    Your presentation on Qualified R.M.R. is right on Target as always.  I would like to add comments to what you have said so well.  

Many Transactions which I have helped Buyers & Sellers with have Many Different kinds of R.M.R.  --      Many of the Sales and Purchase agreements have many schedules.  Many Buyers want to pay different amounts for the different kinds of R.M.R.  Service Contracts & warrantee contracts have a lower value than most monitoring R.M.R.   The Labor costs must be determined, and that will effect what a Buyer will pay for those accounts.  A Seller may have a lot of Fire Sprinkler Monitoring, That should improve the value of the entire Business.  The R.M.R. from Inspections, Testing & certification of Fire Sprinkler systems is worth less than the monitoring, but when you have both the Inspection & the Monitoring, I always get my Buyers the top price paid, for the simple reason that the Inspector takes care of both agreements in one trip in the same amount of time.  Many Alarm-Security Businesses do not do Sprinkler Inspections; all Alarm-Security Businesses should add this profit center to what they now do.

Dennis Riley 

“COACH” to the Alarm-Security & Fire Industries   

Cell 240-462-8220 

dennis@beltwaybrokerage.com

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TO SUBMIT QUESTIONS OR COMMENTS REPLY TO THIS EMAIL OR EMAIL Ken@Kirschenbaumesq.com.  Most comments and questions get circulated.

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Speaking Engagements

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Sonitrol Verified Electronic Security.  Annual convention March 22, 2014 at The Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas.

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SentryNet's 19th Annual Dealer Conference.  April 22 - 24, 2014 at Harrah's in Tunica, MS.  register at http://www.sentrycon.us or call Peggy at 800-932-3304 for more information.   www.sentrynet.com

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Northeast Security & Systems Contractors Expo  Thursday, May 22, 2014 10 am to 5 PM at  Royal Plaza Trade Center,  Marlborough, MA.  registration  https://www.expotracshows.com/neacc/2014/  Presentation on Alarm Law issues and Q&A will be at 2 PM.  For more info contact Gary Spaulding, NEACC President

207-384-2420 gary@spauldingsecurity.com
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Alabama Alarm Association.  AAA's Fall Meeting and Trade Show - October 21, 2014 from 3 to 5 PM at DoubleTree Hotel 808 South 20th Street Birmingham, AL 35205  contact Shelly  (205) 933-9000 for more info

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Electronic Security Summit for 2014.  October 22-24, 2014  at the landmark Broadmoor Hotel. Colorado Springs, CO.  For more information contact Alexander J. Quirin, CEO & Managing Partner, Advisory Summit Providers, LLC.,  (786) 999-9738    alex.quirin@aspsummits.com    www.aspsummits.com

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