NEW YEAR RESOLUTIONS FOR 2021 December 31, 2020
KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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NEW YEAR RESOLUTIONS FOR 2021
December 31, 2020
Happy, healthy and prosperous New Year to all. As for 2020, good riddance. We are all looking forward to this virus being behind us. It's that time of year again, so here are some thoughts on New Year Resolutions for 2021:
1. Update your contracts if you are using contracts earlier than 2020. There have been many changes in the contracts for 2021. You should be using the All in One forms. Call our Contract Administrator Eileen Wagda at 516 747 6700 ext 312 for assistance. The Kirschenbaum TM contract forms are continuously being updated based on changes in technology, services, laws and court cases. Technology continues changing at a pace faster than ever, requiring contracts to undergo revision. Your contracts are the most important asset you have in your business. It's your contract that will protect you from liability and build equity in your business. Your goal for 2021, and every year, should be significant RMR growth. Check out what your alarm company is worth at WhatsMyAlarmCompanyWorth.com. Make sure you have a covid-19 plan in place and continue to be on guard; the virus isn't over yet and seems to be getting worse. Hopefully 2021 will be the end of the virus and not the end of us.
2. Diversity if you can. We added a Digital Display and Remote Hosting contract and a Computer Consulting and Service contract. Home automation and Integration is another service you have most likely considered; many of you are already offering it. You should consider adding the many DIY products to your sales promotions and marketing. You should be offering smart home solutions – engage an electrician or employ one - It's really not whether you should be offering these products, its which products should you be offering. Subscribers don't have the sophistication to select or install most of the DIY products. You can combine the DIY systems with your professionally installed systems or sell them as standalone. RMR growth will depend not only on aggressive sales efforts but diversification of your services. There are many different security related services you can provide, intrusion, fire, CCTV, home automation and video streaming to name a few. Manage your cash flow better and try and retain your RMR accounts. Charge for installation and keep ahead of the monitoring charges by charging quarterly, semi-annually or annually, in advance. If you've been selling off your RMR contracts cut back as best you can. It's time to consider the DIY market, particularly if that market won't infringe on your traditional sales and if you train your sales people properly the DIY products will enhance your sales, not detract from them.
3. Check your insurance coverage. You must have alarm industry specific Errors and Omissions coverage. Check out knowledgeable insurance brokers and insurance companies on The Alarm Exchange in the Insurance category. Not all insurance companies are the same and not all premiums are equal. You need to have confidence in how your carrier handles your claims. The last thing you need is aggravation from your carrier's claims department when you have a claim. You want to be sure your E&O coverage is current and sufficient. Take some time to evaluate your life, health and disability insurance needs and be sure to look for competitive pricing. If you have young kids be sure to load up on term life insurance. It's cheap and your family will be protected. How much? At least one million per beneficiary, so a wife and 2 kids is 3 million. If you're under 40 years old you'll be surprised how cheap the insurance is. And get it while you're healthy. It may not be available if you have health issues.
4. Check with tax experts to see if and how tax laws affect you. Make that call now; don't wait until it's too late to plan. If you're not sure you have access to proper advice, call Mitch Reitman. He's listed on The Alarm Exchange in the Financial Services category. There may be a better way that saves you lots of money. If you are still conducting business in your own or an assumed name, you need to incorporate; do it now. You don't want to continue to invite personal liability for your business activities. I recommend a business corporation, sub chapter S election, and despite some accounting advice to the contrary, elect to be on a cash basis. Call K&K’s corporate department: Jennifer Kirschenbaum, Esq at 516 747 6700 x 302 or Jennifer@Kirschenbaumesq.com
5. Make sure your license to conduct your business is active and up to date. If you are a qualifier for someone else's business then make sure you have a Qualifier Agreement. Don't be foolish to take on that responsibility without an agreement. And if you're the business owner and not the license holder you need the Qualifier Agreement too so that you can be more comfortable with the arrangement with the license holder. Be certain you know all of the licensing requirements in all of the jurisdictions you do business. It's not enough to get the license. There are all kinds of regulations that go along with that license, many of which affect your employees. Be license compliant and avoid heavy fines and possible suspension or loss of your license. If you need a Qualifier Agreement - call Contract Administrator Eileen Wagda at 516 747 6700 x 312 to get it done right. Eileen is also our License Coordinator to connect license holders with companies needing licenses.
6. Review your account receivables. It is essential to stay on top of your receivables. You may need to become more aggressive with your collection efforts and procedures. Don't carry subscribers who are in default, which means falling out of their regular payment schedule or more than 90 days in arrears. K&K can handle your collections if you have our Standard Form Agreements with the arbitration provision. Contact our head paralegal Kathleen Lampert at KLampert@KirschenbaumEsq.com or (516) 747-6700 ext. 319. We support the contracts we sell.
7. If retirement or the sale of your business is remotely in your future start thinking of an exit strategy now. If you have fellow shareholders, partners or LLC members you must have an agreement between you. This is especially important if you are family members or best friends. People often think that agreements are not necessary when dealing with family and friends, but those relationships account for more of the litigation than strangers who decide to partner. Why? That's easy; people think they don't need an agreement when dealing with family. However, without an agreement too many disputes can arise where no agreement controls the outcome. Be mindful of tax consequences. If transition to family members is your plan then perhaps you need a Trust and should start transferring stock to that Trust or to your kids now. If you think you might sell then you need to start running your business like a business. In either event, you should be increasing your RMR under contract. For transactional legal services, which you should seek before you start making deals, make sure you engage a competent alarm attorney - give me a call [516 747 6700 x 301] or call K&K’s Acquisition Team headed by Jennifer Kirschenbaum, Esq. 516 747 6700 x 302
8. Try to pay down debt. Manage your business to operate within its means. That's sound advice for your personal finances as well. Working harder and making better sales decisions is the best way to raise money. Selling your subscriber accounts and contracts is like selling your soul to the devil. If you belong to a dealer program or group that encourages you to sell your subscriber accounts then consider whether you’d be better off retaining those accounts and building equity for your company. If you sell your accounts to your dealer program you may as well get a job with benefits, you'll probably end up with more money, vacation time, health benefits, retirement plan and less headache.
9. Make sure you are getting the best deal from your suppliers, and that includes your central station and equipment distributors. Make sure your central station is using the Standard Form Dealer Agreement so you know it is dealing fairly with you. Times are tough for them too and they are looking to hold on to good accounts, like yours. Be sure you have your own lines, your own IP address and that your control panels are remote programmable. If you pay your bills you have a right to be demanding. Affordable services are available from reputable suppliers; you don't have to continue dealing with suppliers that are not responsive to you or your subscribers' needs and requirements. For a listing of those who want to do business with you, check out The Alarm Exchange. It's updated daily and it's sent out with our daily emails.
10. Get the Standard Form Contracts at www.alarmcontracts.com. They will make you lots of money and protect your business. The longer you wait the longer you put your business at risk and delay in growing your RMR.
To order up to date Standard Form Alarm / Security / Fire and related Agreements, click here: www.alarmcontracts.com
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Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301