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Comment on should you care how your central station handles power loss signals

from Oct 7, 2013 article 

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Ken

    Re: Power loss

    When I sold an alarm installation business some years ago, I was monitored by the new firm’s central station. I learned first-hand, how poorly some centrals handle these signals. Unknown to me, they had a policy of delaying power failures by 30 minutes while waiting for a restoral. I always programmed a 30 minute delay on reporting, to prevent short interruptions from sending a signal making this policy contrary to my desires. That is only a minor inconvenience compared to what I believe causes lots of customer discontent. On one occasion, when we had an extended power failure, I didn’t get a call regarding the power failure even after several hours. I did however; get a call 24 hours later from the central to let me know I had a power failure the day before. Tell me what good it does to delay notification by a day or more. Surely the batteries would be dead by now, and a standard customer would have had to deal with an erratic system that probably dumped every signal and possibly could not be shut off just before going dead. The operator’s reply to my question of why the call was delayed was that they were busy with higher priority calls. For over a day??? That is inexcusable. Aside from being ridiculous.

Needless to say, I dumped the “free” service and switched to a reliable central station. But this raised questions about all of my former clients and the level of service they now get. It was resolved, but not easily. Here is my suggestion based on my own experience as an alarm company owner and customer.

 

  •         Make sure the client knows how power failures and others are going to be handled.
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  •         Program an immediate local annunciation (so the errant service person puts the transformer    back in)
  •          Delay reporting to your central station by 15 or 30 minutes to filter out blown breakers or short power interruptions
  •         Program restores so the client isn’t bothered by corrected power issues
  •         Make sure that the subscriber is notified in a timely manner.
  •         Provide operators with instructions for store owners upset over being wakened, that the alarm system may die in several hours without action
  •         Make sure that your client knows how this will be handled as well as all other signals
  •         Put it in writing. A document that outlines how central station signals are handled and related policies should be provided to all subs.

Just my 2 cents worth.

Mitch Cohen

Bric Security

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Follow up on Which legal entity is best from Nov 2, 2013

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Ken

     You are correct regarding forming a corporation or LLC to shield the owners from liability.  

     A couple of additional items to mention on the subject are that most security businesses will eventually sell RMR.  For an S corporation the proceeds from the sale are generally treated as capital gains and taxed to the owners at a preferential rate.  A C corporation pays taxes at its full corporate rate and then, when the cash is distributed to the shareholders, it is considered a dividend and they are taxed again at their personal tax rates.  When Federal and State rates are taken into consideration, the combined tax rate can be has high as 60%.   

     While you are correct that an owner of a single member LLC generally files only one tax return, this also means that if the IRS wants to audit the business return, they will also be auditing the personal return.  This may result in a more complex audit.   There are very few situations in which an S corporation is not the best entity for a security company.      Make certain that your attorney and CPA understand not only the law, but what you do.  If you let Ken and Jennifer's firm perform your incorporation you know that you have competent counsel.

Mitch Reitman

S.I.C. Consulting, Inc.

Fort Worth, TX 76133

817-698-9999

WWW.SICC.US

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Webinars 

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December 4, 2013   12 noon EST  Register here: https://attendee.gotowebinar.com/register/4919260455763006721

     Title:  10 Things Residential Security Alarm Companies should consider BEFORE entering the world of Commercial Engineered System Fire Alarms

      Presented by:  Bob Williams, President of Briscoe Protective Systems and his Management Team. 

Briscoe Protective Systems has been in the industry for 35 Years and has made the transition from a Residential Alarm Company in the late 70’s to a Engineered System Fire and Security Company that is an SDM Top 100 Company. Find us on the web at www.BriscoeProtective.com or on LinkedIn under Companies, Facebook and Twitter@BriscoeProSys 

      Description:  There is a big difference between installing Residential Fire Systems and Commercial Engineered Fire Systems and there are “Key Factors” that Security Company’s should consider before attempting to go into this lucrative but challenging market.

      Who should attend:  Alarm company owners and fire techs.