Your post “two ideas to ruin your alarm business” on October 26, 2015 was great.  I have a few more.  These are all items that come up time and again in acquisitions.  They can delay or even kill a transaction, and yes, you are most probably going to sell your company or accounts some day.  At the least the following items can cost sellers hundreds of thousands of dollars.

  • Use a friend or competitor’s contract and “modify” it to fit your business.  We often perform acquisition due diligence on selling companies who “borrowed” someone else’s form of monitoring agreements and finds that there is a problem with them.  Your monitoring agreements are your most valuable asset, invest in them. 
  • Allow your employees to make changes to your good contract.  Don’t bother to review or sign them, just hope that they are valid and enforceable or that a salesperson hasn’t changed or added to your duties under the agreement.
  • Keep operating as a C Corporation or, even worse as a sole proprietorship.   Being a C Corporation makes it very difficult to sell your company and operating as a sole proprietorship opens another can of worms.
  • Operate without the required licensing for every jurisdiction that you do business in.  Many buyers will consider contracts executed by unlicensed companies to be void.
  • Let your insurance lapse because, well, all of your clients are your friends, and, besides, you don’t have enough net worth to get sued anyway.
  • Perform additional services (video monitoring, service agreements, inspections, etc…) without the proper agreements.

     I hate paperwork as much as the next guy, but taking short cuts in these areas can hurt you.  Ignore changing technology and sound business practices at your own risk.  The Stone Age didn’t end because people ran out of stones.
Mitch Reitman
Reitman Consulting Group
Tax Compliance - due diligence - valuation - business advisory services 
    Great list and thanks for contributing.  I am re circulating my oridinal post from Oct 26 below so everyone can make the connect.
 I know you wouldn't intentionally set out to wreck your alarm business, or take deliberate action to ensure that it never gets off the ground and fails from the get go, so here's two sure fire ways that come to mind to accomplish just that.  
      One:  Continuing to buy and install 2g technology and using outdated radios and other equipment that is or soon will be obsolete.  We can see the "sunset" so continuing to install communication devices that won't work much longer makes no sense.  I don't know if wire is going the way of foil, but keep an eye on technology that makes older technology less attractive, less cost effective, less reliable and obsolete.  No auto dealers offer vehicles without air conditioning and radios.  Don't be an alarm dealer that limits what you offer when there are so many new products and new techology available.
       Two:  If you're still using yesterday's form agreements then it's time to wake up and smell the money.  
The most important asset you have is your form agreements.  Using agreements drafted 10 years, 5 years, even 2 years ago are going to need updating.  Will the old one work?  Maybe.  Just like a local bell and front door contact might be enough to catch the burglar, or the single stand alone smoke detector to save a family.  But you'd be nuts to offer just those services and products.  

  •  When your subscriber doesn't pay you, you'll be looking for the contract
  •  When your subscriber or its insurance carrier sues you, you'll be looking for the contract
  •  When you want to expand and borrow money, you'll be looking for the contracts.
  •  When you want to sell, you'll be looking for the contracts.
  •  If you're not unconscious and want a good nights sleep, you'll be thinking about those contracts.

 Sure there are a few other things you need to be thinking about, but the above, not necessarily in order of priority, are a very good start.  Which contract forms do you need?  Well that depends on your business.  

 Other forms that you may need, such as Employment, Subcontracting, the central station forms, riders to your forms, completion certificates, deciding whether to lease or sell [most of you will be selling except for small commercial jobs where you may want to lease], PERS, mPers and nationwide DIY.  Get the form agreements you need at www.alarmcontracts.com or call our Contract Administrator Eileen Wagda at 516 747 6700 x 312 for information and assistance.