what's the multiple - for sale signage on the side of the road June 9, 2025

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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what's the multiple - for sale signage on the side of the road
June 9,  2025
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what's the multiple - for sale signage on the side of the road
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Ken,
   I think it's time to highlight the reality. This week I received yet another email from a business broker who makes the claim -
   "Business valuations in the security, fire, and integration industry are as high as they’ve ever been."
   Well, I am here today to say this is not new news because I have reviewed the articles on your sight for the last 13 years and the multiples have not changed for the average company. So they are right, the market is as high as it has been, for 13 years.
   Yes, there certainly have been the outliers over the years that you and I have heard of that the multiples just made our heads shake, but there were always outlier facts to support those prices. No buyer overpays because they are smart enough to know the formulas, or their funding supplier would not allow the buyer to overpay.
   So all in all, my message is simple, selling a viable business that is thriving is almost always better to hold and operate, than to sell it. Small business owners and managers are almost never better money or investment managers than operating their alarm company.
   Don't believe what merger and acquisitions brokers tell you, because they make nothing until you sell your asset. They have nothing to lose.
Bart A. Didden, President
U.S.A. Central Station Alarm Corp.
Port Chester, NY
Milford, CT
St. Paul, MN
Pasco, WA
877-872-1266
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Response
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   Good points but I think a few considerations haven't been considered. First, I agree that multiples have been consistent over the years, except for central station monitoring centers who are now getting more than ever for the wholesale monitoring accounts. [a deal that has to be carefully structured and handled, so when ready give me a call to broker the deal and represent you on the legal side]
   Second, a healthy alarm business with consistent RMR is likely a good way to have your "investment" or "nest egg" invested. If you can continue the business for more than 4 years you will make what you would have sold the accounts for, and you will still have accounts to sell at the end of the 4 years. [my athematic may be off and it might take more than 4 years, maybe up to 6]. Better to invest in yourself and a business that historically made you money than get involved in new ventures in investments controlled by others. Obviously a healthy alarm business must continue to grow its RMR.
   But Bart apparently hasn't heeded the advice of Dirty Harry, "a man needs to know his limitations". Where I think Bart's advice misses the mark is when the owner or the business cannot continue "business as usual" or "better". Alarm company owners are like every other business or professional person; health, age [and they often go together] sometimes intervenes and prevents an option to continue in business. If you're too sick you can't continue to work and that is likely to cause severe consequences to your operation. Likewise some businesses have dug a whole because of poor business practices or maybe just bad luck, and can't continue to grow or even stay flat, diminishing the ability to operate profitably.
   I almost missed another reason to sell, and it has nothing to do with your age, health or condition of the business; you just may be ready for change. You may just want to pursue your dream, whatever it is. Some of you might want to be a lawyer, so go to law school, or a doctor or Indian chief; some may be ready to spend time traveling, or with their spouse and family. It's a legitimate reason to sell the accounts and company, and whether you can make more money sticking with the business or more if you sell another time, doesn't matter.
   Waiting too long to sell will, by definition [waiting too long] generally means ending up with a lower sales price with less favorable terms that what is customary. So don't sell at the "wrong time"; sell at the "right time", the "right time" for you. When you're ready K&K is ready to assist, handling your legal needs and finding you the right buyer, making the process simple as it can be. Give me a call when you're ready.

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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