How To Increase The Value of Your Alarm Business

Graph showing increase in an alarm business' value

As an alarm business owner, it’s important to know what your company is worth. If you are planning to sell your fire or security alarm organization in the near future, it’s especially important to have a solid understanding of the value of your business.

But knowing the value of your business is just the first step. Once you understand what your alarm business is worth, what if you want to increase its value?

Want to make your business healthier and more profitable today and more salable and attractive to buyers in the future? Here are few tips and suggestions to help you increase the value of your alarm business.

7 Tips for Increasing The Value of Your Alarm Company

Make your business more valuable and salable with these seven strategies for augmenting your alarm company’s value.

1. Document Processes, Systems, and Strategies

You have a certain way of doing business. If your business is doing well, that way of business is obviously successful. Documenting the effective strategies, systems and processes you have in place can help to keep your business organized in the present and make it more salable in the future.

2. Seek Out Sources of Recurring Monthly Revenue

Recurring monthly revenue is key for profitable companies in the alarm security industry. In fact, the amount an alarm company is valued at is often calculated based on a multiple of the RMR that the business generates. The more recurring monthly revenue your business brings in, the more your company will be worth – both now and when it comes time to sell.

3. Diversify Your Account Base

This may seem like a no-brainer, but it’s important to remember not to put all of your eggs in one basket. Having a diverse customer base will give your company a solid foundation that buyers will appreciate – and likely pay more for – when you’re ready to sell. Exploring new service areas may require legwork and investment up front, but can be very advantageous in the long run. For example, fire integration can be a challenge for organizations that have been strictly focused on security, but can pay off in a big way if achieved. (Learn more about the advantages of fire integration here.)

4. Understand Your Company’s Unique Selling Point

What does your alarm business have to offer that sets it apart from the competitors in your industry? Understanding and articulating that unique selling point – both to your customers, and to potential buyers during the sale process – can help you generate additional business and increase profits from the sale of your alarm company. Showcasing what’s uniquely valuable about your organization can help inspire customers and well qualified buyers to choose you.

5. Invest in Market Documentation

Understanding the security alarm market, and how your company is performing in relation to how the market is doing, is incredibly valuable. It will give you a truer sense of what’s going on with your business, and will give potential buyers a deeper understanding of your company when it ultimately comes time to sell.

6. Combat Attrition

When it comes to gaining and retaining your customers, staying at the top of your game is a must. Attrition (or lack thereof) is a key indicator of success, profitability and overall health of alarm businesses. By combating attrition, you can maintain and continue to build upon your alarm business’ value. Check out these proactive tips for preventing attrition in your alarm business.

7. Make Regular Reporting a Priority

Reporting is a task that often gets moved to the back burner, but the truth is it can be immensely valuable for your business both in the short- and long term. Putting together reports on a regular basis helps you to keep a finger on the pulse of your organization in the present, while simultaneously making your company more accessible, appealing, and valuable to buyers down the road when it comes time to sell. Learn more about how reporting can contribute to increasing the value of your company here. 

Add Value to Your Alarm Business!

There are many strategies you can implement with the intent of increasing the value of your alarm business. These seven tips are a great place to start.

Wondering how much your alarm business is currently worth? Want to get a sense of your starting point in terms of your company’s value? Contact Rory Russell at AFS today for a FREE alarm business valuation.

As one of the leading alarm company brokers in the industry, Rory has decades of experience facilitating mergers and acquisitions of fire and security alarm companies. He knows what to look at to calculate what your business is truly worth, from RMR to test and inspect revenue and everything in between.

Additionally, Rory can help you position your company for a profitable sale and connect you with qualified buyers willing to pay top dollar for your business when you’re ready to sell.

Interested in adding value to your security business or achieving a deeper understanding of what your organization is currently worth?

Reach out to Rory today by calling him directly on his personal cell at (800) 354-3863 (24/7 availability) or by completing this quick and easy online contact form.

Related Resources:

How to Position Your Alarm Business for Success This Year – Looking for opportunities to grow the value of your business in the next year? Find out what steps you can take to better your alarm company moving forward.

How To Know When It’s Time To Sell Your Alarm Business – Wondering when the right time is to shift from building value to finding a buyer? This article will help you to understand the signs that indicate the time has come to sell your alarm company.

Is It Time To Stop Reinvesting In My Alarm Business? – Building value often involves reinvesting in your business. When is it time to say enough is enough? Learn about the signals to look for when it comes to knowing when to stop reinvesting.