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Ken
     I read most of your daily e-mails.  Your e-mail on August 17, 2012 on Selling accounts or your Business is most interesting. I have been in the Alarm-Security Business for well over 35 years.  I have owned built and sold 31 Alarm-Security Businesses in 17 cities.  I am a Broker & Coach that helps people Buy & Sell Alarm Businesses.  I have acted as the Broker on over 100 transactions that were sold to about 50 of the most active Buyers.  I have used your contracts in my companies for years, and never had a lawsuit, where your agreements were used.
    A key suggestion to many of your clients, make sure “THEY SELL THEIR BUSINESS TWICE” Most brokers and Buyer are focused on selling the account base and the “Reoccurring Monthly Revenue (R.M.R.). They do not spend the time needed to sell the Operation side of the Business. Many owners of Alarm-Security Businesses today are focused on The “Integration” side of their Business, and not the R.M.R.  As a Broker I find many reasons why my Buyers will pay the top Dollar for the R.M.R., but most of my time my energy goes into Selling the operation side of the business.  I get the Buyers to focus on each and Every Profit Center of the Business.  The Operation side of the Business is worth 4 to 5 times net earnings after you remove all income and expenses related to the R.M.R.  Most Buyers will tell you that when they pay you top dollars for their R.M.R., they are including the operation side for free or an amount about 10% of what it is worth.
    A key element that I make very clear to my Buyers is a key Item that is not on the P & L or balance sheet. Most monitored accounts that produce an average of $30.00 per month are worth $1,000 to $1,200.  If you add 15 new accounts per month, that is an Equity gain of about $15,000 per month or about $180,000 per year. This type of volume and activity should add about another $300,000 to the purchase price. You can see more details on this at www.AlarmClub.org  and  www.Alarm-BusinessesForSale.com
Dennis Riley
www.beltwaybrokerage.com
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Response
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    Good points.  Although certainly the most common criteria for alarm company valuation, RMR is not the only one and often companies have characteristics that call for other creative ways to value and package the business for sale.  A knowledgable broker in the alarm industry should be able to assist.  Remember the time to seek advice and assistance in the sale of your company is right now.  Why now, even if you're just getting started in the business?  Because one day you'll want to sell and if you've conducted your business with that in mind from the start you will be in a much better position to maximize your company value.  
    Once ready to sell, engage competent counsel and other professionals to guide you, before you make a deal with someone.  The Acquistion Department in my office will assist you before you commit to things you shouldn't, and guide you to ask for things you haven't thought of.  We're always available.  Call me, Jennfier Kirschenbaum at 516 747 6700 x 302 or Dennis Stern at 516 747 6700 x  323.  And while you're at it, upgrade your contracts.  It's going to be the first question I ask you.

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    On February 27, 2012 I circulated an article of what buyers would be interested in when looking for a company, the reverse view of what a seller should be presenting to potential buyers.  The article can be read at
https://www.kirschenbaumesq.com/article/what-buyers-of-alarm-accounts-should-consider-february-27-2012

      Keep in mind that the Acquisition Group at Kirschenbaum & Kirschenbaum PC is skilled in the alarm industry and here to represent you in either buy or sell alarm transactions.  Give me, Jennifer Kirschenbaum, Esq or Dennis Stern, Esq a call. 
 
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