KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** what are monitoring accounts worth April 8, 2025 ******************* what are monitoring accounts worth ******************** Ken You often write about the value of an account with a Kirschenbaum contract can be worth between 30 and 36 times RMR or higher. We have our own central station and we also monitor 4-5 thousand accounts of other dealers, what would those accounts be worth? Thanks Appreciate keeping us anonymous. Please mention we are Concierge Members. CONCIERGE ******************* Response ******************* Keep in mind that when there is a 6 point spread from 30 to 36 you are talking about a 16% spread. If the purchase price is $3 million that's half million dollars. And when it's on $100,000 deal that's $16,000, and that $16,000 may mean more to the seller than the half million does to the seller of the larger company. There are so many factors that go into figuring out the value of your business and your accounts that it is well beyond a quick article. In point of fact, while the methodology of calculating value can be explained it will still come down to so many subjective factors very often the best way to find out the actual, as opposed to the estimated value, is to put the assets on the market and see what bids come in. Here an important factor is what audience sees the listing; who knows you're for sale? Often the interested party is down the block, or the well-known buyers who are out there gobbling up accounts, but just as often the offer will come from a party you would not have thought of or known, and who wouldn't know you. While companies sell for fairly common reasons, companies buy for many different reasons. For example, a potential buyer may have credit lines that must be used or lost; may want a foothold in a particular city or town to support an operation it already has in the area; or a myriad of other reasons. Sellers on the other hand generally sell when there is an unfortunate death in owner or key employee, economic downturn in the area or just for some reason affecting the company, or owner has aged out with no next generation ready or willing to take over. When it comes to selling it's best not to wait until you have no choice; buyers will sense your vulnerability and likely take advantage, but worse, chances are the company will be experiencing a downturn, and this will certainly affect the purchase price negatively from the seller's perspective. It's true that most deals sell within the 30 to 36 times net RMR range. There are definitely deals outside those parameters; some well outside, both less and more. It's important to plan the sale of the company carefully. Most of you will want to be able to present the opportunity to the largest audience you can; the pool of buyers will be much larger. K&K can certainly help by brokering your deal - posting on The Alarm Exchange for wide audience - and represent your legal needs expertly, efficiently and quickly. Seller will want to price the company properly because pricing too high will deter potential buyer from considering the opportunity and pricing too low will encourage potential buyers to take advantage of you and the opportunity. K&K can help with that too. With probably more deals under its belt than any other broker or law firm we have the experience to evaluate your company, whether selling or buying, assessing the most important assets- the contracts you'll be selling or buying. No one offers a faster and less expensive evaluation than you will find on https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth; no one will have more legal expertise to focus on what's important when selling or buying than K&K. We look forward to hearing from you. ********************** STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** WEBINARS: https://www.kirschenbaumesq.com/page/alarm-webinars *********************** ALARM ARTICLES: You can always read our Articles on our website at www.kirschenbaumesq.com/page/alarm-articles updated daily ******************** Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth *********************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* PODCASTS: https://podcasts.apple.com/us/podcast/ken-kirschenbaum-presents/id1794851477 ************************* Getting on our email list / Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
