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How much are you leaving on the table for service and inspection revenue  
September 3, 2018
How much are you leaving on the table for service and inspection revenue
            You have 4 months left in 2018.  How will 2018 stack up to prior years for RMR growth?  Too many of you are ignoring my advice regarding RMR for repair service and inspections.  I know, you want the per call revenue and you don’t have to take a chance on a repair service plan that you don’t feel comfortable pricing out and committing to.  Same with the inspection services; you want the revenue when you do the inspection.  Maybe you treat it as a repair service when it comes to charging.  
            You could finish out 2018 and continue with this business model until the day you sell.  That will be your day of reckoning.  Here’s how the conversation goes:
You:  The buyer is paying 38 times the RMR for the monitoring charges.  My annual revenue for repair service and inspection services equals the RMR for monitoring.  What am I getting for my repair and inspection business?
Me:  You get nothing for it.  The buyer is buying the RMR under contract.  All you have is monitoring RMR under contract.
You:  What happens to my repair and inspection business?
Me:  It’s going to the buyer.  Buyer may have factored in that potential revenue when it offered to pay 38 times for the monitoring RMR, but in any event, you will be restricted from competing with the buyer after the sale and the buyer expects to get your repair and inspection revenue after the closing.
You:  Can I get anything for it?
Me:  You won’t get anything for it from this buyer.  This buyer works on the RMR model.
You:  Should I refuse this buyer and look for another buyer, or is there something else I can do?
Me:  There is potential for you to find a non-traditional buyer [non-traditional for the alarm industry] who will be interested in your “enterprise” value, perhaps be willing to pay based on EBITDA [earnings before interest, taxes, depreciation and amortization], but my recommendation, if you have the time and resources, is to convert your per call accounts to Repair Service and Inspection RMR plans.  It won’t take long to figure out what to charge for these plans, and in fact you already have a history with the per call revenue; just figure it out for RMR.  
You:  Will I get the same multiple for the repair and inspection RMR as I am getting for the monitoring RMR?
Me:  Depends on the mix of RMR, but even if you don’t get the same multiple, you will get some multiple that will certainly make your effort worthwhile.  Priced right, the RMR model should produce the same or more revenue for repair and inspection services, and you will be building equity in your business that you will one day be able to sell.
You:  blank stare, or finally receptive to making the smart move.  
            The best way to build and document your RMR is by using the updated Standard Form All in One Agreements.  These forms are designed to sell your services by promoting those services and separately pricing each service.  Have a doubting subscriber?  Give them the Disclaimer Notice and have them acknowledge all the security they aren’t getting; it lets them know the risks they are taking.  Don’t delay.  The KirschenbaumTM forms are all up to date.  All they need is your name on them.  Get them at  Make sure you make the most of the next 4 months of 2018.

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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
516 747 6700