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 ****************************** More on Is RMR enough to survive in alarm business August 28, 2024 ************************* More on Is RMR enough to survive in alarm business from article on August 16, 2024 ************************* Ken Great comment by Brett and response by Ken re RMR enough to survive. . Excellent points. Please consider an additional view. While challenging, the alarm industry today offers great opportunities Reliable wireless detection devices for hard to install hardwire situations . CCTV at reasonable prices and with expanded uses. Accesses control with expanded uses. Mandated fire monitoring. The public awareness of systems as the result of advertising { a point that Ken often states } Lots more glass half full availabilities. Brett mentions financing availability. Well it is. That is why Alarm Financial Services has been in business since 1987. We take a dealers existing RMR and use for collateral to provide a loan to finance new installations. This after carefully doing the math to be sure the numbers work .After doing hundreds of the transactions we know how to run the numbers. We essentially become partners with the dealer in a positive way. They profit and we have our loan repaid!! Talk to Ken re his services. Talk to Jim Jr re our finance services. Why would you not ?? Ken , thanks again for this forum. Jim Wooster Sr Alarm Financial Services ************************** Another comment ************************* Ken, While recently visiting another alarm company's offices I saw their operating mantra displayed on a plaque on the wall: "Any Job Worth Doing, Is Worth Doing For A Monthly". The owner elaborated on this: "If the job is not going to generate a monthly (RMR) for us, we don't even quote on it". Anon ************************ Response ************************ There is no question that for 99% of alarm deals, buy or sell, the price is based on RMR. While gross sales and net profit can be considered it’s the RMR that is used in the formula for pricing. EBITDA sales are not common in the alarm industry. Alarm companies that do subcontracting work for fire alarm installation are often engaged by a GC, not the owner of the building. The only work contracted for is the installation and the alarm company hopes to get a contract for the after-install services, monitoring, inspection and service. The question the alarm company needs to ask itself is whether the installation job is worth it if there won‘t be the after-install services. Many alarm companies do installations for cost or below cost just to get the RMR. That’s an OK strategy as long as you have the RMR locked up. When engaged by the GC and stranglehold prices be sure to let the GC know that you won’t take the job unless the owner signs the Fire [or security] All in One now, before the installation. If you’re making a profit on the installation then it may pay to gamble on the after-install services agreement. I guess I’d be remiss not mentioning the industries favorite topic, “what’s the going rate”? K&K does a lot of brokering for alarm companies and even more legal representation for transactions. We see a lot of deals and watch the negotiations to arrive at prices for those deals. The industry is still between a wide range based on many factors I’ve discussed in many articles. Low prices can be 15 times RMR and high 42 or more times RMR. Wide exposure to potential buyers is often a contributing factor to pushing a price higher, and you get that with K&K marketing your deal. Knowing how to structure the deal, whether selling or buying is not something you should be expected to know [I don’t care how many deals you’ve done] and proper advice is necessary to maximize your deal and avoid issues after the deal closes. It’s getting close to end of year – if you’re planning on selling now is the time, not last minute. Give me a call or send an email. ************************* K&K Holiday Party - Save the date: December 12, 2024 ******************** STANDARD FORMS 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. *********************** ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ******************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email 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. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** 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
