You can read all of our articles on our website. Having trouble getting our emails?   Change your spam controls and white list 


What's your alarm business worth
October 1, 2021
What's your alarm business worth   
            What your alarm business is worth is probably something you think about often.  If you don't, you should.  Most businesses, the alarm industry included, either grow or shrink.  Stagnation is not good for business.
            How is this measured in the alarm industry?  There could be several answers, different ways to measure growth. 
  *  how much did the owners put in their pocket this year compared to prior years
  *  how many customers does the business have paying recurring charges; more or less than prior years.
  *  what's the net RMR for monitoring
  *  what's the RMR for inspection, and what's the cost of providing inspections
  *  what's the RMR for service, and what's the cost of providing service under RMR
  *  how many new installations this year compared to prior years and what is the profit margin
            A lot to think about, especially when you're trying to get to sleep.  Let me make it simple for you.  Let's boil it down to just one calculation that's not too hard to find out and not too hard to remember, so that anytime, any day, you're asked, you've got the numbers.  It's your RMR.  You should know your gross RMR and your net RMR, and once you know it you should break it down for a few different categories:
  *  residential
  *  commercial security
  *  commercial fire
  *  leased systems
  *  monitoring RMR
  *  service RMR
  *  inspection RMR
            Most, not all, alarm businesses work with the RMR model.  Those that don't focus on sale and installation and per call service, a model favored by those selling cameras and access control, though even those systems can be folded into the RMR model.  Subcontractors working for other alarm companies don't typically have RMR build-up and their success is measured by the monetary bottom line at the end of the year. 
            Alarm companies that don't use the RMR model can sell only one way, EBIDTA, earnings before interest, taxes, depreciation, and amortization.  EBITDA is a measure of a company's financial performance and profitability.  High EBITDA is better than lower EBITDA. Industries vary widely in their financial performance and the best way to determine whether a company's EBITDA is "good" is to compare its number with that of other companies of similar size in the same industry and area.
            But most alarm companies use the RMR model and their valuation is based on the "going multiple" for RMR alarm accounts.  That multiple can have a wide berth from low to high based on many factors that potential buyers of alarm accounts consider.  I've addressed many of these considerations in prior articles and they haven't changed.  The articles are available on K&K's website under Alarm Articles.  Use the search feather to find valuation articles. 
            What I really want to address in this article is what today's multiples are.   Once you know your RMR, what can you anticipate in the way of offers if you want to sell your business?  And, what business are you selling?  You will find that potential buyers are interested in your alarm accounts that pay RMR.  They may be willing to buy your vehicles and new inventory, but that's about it.  Don't expect a separate number for your phone number or domain name or website. 
            In my opinion the multiple hasn't changed over the past many years, it's still 35 times your net RMR.  That doesn't mean you're going to get that multiple because you may have done more, or less, than adhere to recommended best practices.  If you're done more then perhaps you will get a multiple of 44 or more; if you've done less, perhaps you will hear offers of 18, or less.  Big swing in price and that's because not all alarm owners run their business the same way. 
            K&K is presently working on about 10 alarm deals as I write this article.  We represent sellers and buyers and sometimes both.  I "brokered" a few of the deals, but not most of them.  The deals are priced between 32 and 44 times.  The price starts at 35 and moves up or down based on the accounts. 
            You should be careful to make sure you are headed to the higher multiple, always.  It's not if, but when, you're going to sell and there's no reason you shouldn't be prepared.  Trying to change your operation, and your account base, once you're ready to sell is hard to do; probably improbable because you won't have the time. 
            If you want an assessment of what your alarm business is worth you can find out easily by going to What is My Alarm Company Worth?

To order up to date Standard Form Alarm /  Security / Fire and related Agreementsclick here:
You can check out the program and sign up here: or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304.
NOTICE:  You can always read our Articles on our website at
THE ALARM EXCHANGEalarm classifieds alarm security contracts

    This area is reserved for alarm classifieds, alarm company announcements, solicitations, offers, etc. 
    There is no charge to post a listing here.Include your contact information, phone, email and web site.  If you would like to submit a post, please send an email to  To create a reciprocal link to our website, click here.

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
Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301