There are a few ways you can go about growing your alarm business. One of the most common ways to grow substantially in a relatively short period of time is to seek out an acquisition or merger with another security organization.
But since you’ve worked hard to build your alarm business into the successful enterprise it has become, merging with or acquiring a reputable security company in good standing is an absolute must. You don’t want to take a chance on an organization that doesn’t fully meet your standards, or one that you’re not entirely confident will align with the values and business practices you’ve established within your security business.
So what qualities should you look for in an alarm business that you intend to buy? What are some of the key characteristics that indicate a security company for sale is one you should pursue?
We break down some of the basic indicators that an alarm business is worthy of a closer look from an interested buyer.
What Buyers Should Look for in Alarm Businesses for Sale
Technology Upgrades
The security industry is evolving quickly these days, and alarm businesses need to be moving fast to keep pace. Many alarm company owners are choosing to sell as they no longer want to continue investing in their businesses when it comes to keeping up from a technological standpoint.
While this means there are likely more companies on the market for you to choose from as a buyer, it also means you’ll need to be wary of those that have fallen too far behind. You’ll want to be sure that a company you acquire or merge with is up to date enough technology-wise that it will align with – or can feasibly be updated to align with – your existing organization.
Up-to-Date Finances and Contracts
Keeping contracts up to date and consistently keeping a finger on the pulse of company finances is a sign of responsible business practices, which can indicate that you’ve found a reliable, trustworthy seller and a healthy business to consider merging with or acquiring.
Additionally, up to date finances and contracts will help to make a sale and the transition to new ownership much smoother, which is advantageous for all parties involved.
Established Recurring Monthly Revenue and/or Service Revenue
RMR and service revenue are among the most valuable assets that a security company can offer. If you’re looking to increase profitability and company value, you’ll want to be sure you find an organization that has well established sources of recurring monthly revenue and/or service revenue. The profits from this type of revenue are reliable and consistent, and can be substantial!
You can learn more about the importance and role of RMR in the security industry here.
If you’re a fire alarm business looking to expand and acquire additional service revenue, you can learn more about what makes service revenue so valuable here (and why the best qualified buyers are willing to pay for the revenue they stand to gain through an acquisition).
Minimal Attrition
Attrition is a very real thing in the security alarm industry, and it’s also a key factor to consider when assessing the health and overall value of a security business that you may be interested in acquiring.
Having a solid understanding of the rate of attrition within the organization you’re looking to acquire or merge with, along with an understanding of the types of attrition that are impacting the business, can help you to determine whether or not the company is a good fit.
Learn more about attrition in the security alarm industry here.
A Solid Reputation
This is somewhat obvious, but you’ll want to be sure that the organization you’re overtaking has a solid and generally positive reputation in the industry. You don’t want to invest in a partnership or merger that’s going to tarnish the reputation and standing you’ve worked hard for your established company to achieve.
Working with reputable industry professionals and businesses that are well-established and well-regarded is key when it comes to shopping your options for an alarm business to purchase.
Qualified, Hardworking Employees
If you’re planning to keep some or all of the established team within the organization you’re looking to acquire, you’ll want to be sure it’s a team made up of trained and competent employees. They should have all appropriate certifications, and should be capable of providing the level of customer service that your current clients have come to expect from your business.
A Succession Plan
A detailed and well thought out succession plan is another indication that you’ve found an alarm business that may be worth a closer look when it comes to a possible acquisition. Sellers who are invested in their businesses and want to ensure that the future of their company is secure are the sellers who work hard to set up a succession plan.
A well developed succession plan can be a solid indication that you’d be acquiring a company that’s positioned well for a transition and capable of succeeding for the long-haul.
How to Find a Quality Alarm Company For Sale
Now that you’ve reviewed what to look for in an alarm business that’s worth acquiring, how do you find security businesses on the market to consider?
There are a number of ways to go about finding high quality alarm businesses for sale. But likely the best way to find reputable alarm businesses for sale is to work with an alarm company broker.
Ready to Take the Next Step Towards Acquiring an Alarm Business?
If you’re a buyer preparing to grow your security business and you’re in the market for an alarm company or alarm accounts, working with a broker like Rory Russell of AFS is the way to go.
With decades of experience handling successful and profitable mergers and acquisitions in the security, alarm, fire and CCTV industries, Rory is a trusted resource and ally for both buyers and sellers. He is always on the lookout for well qualified buyers like you to pair with the sellers he partners with.
Need help finding an alarm business that’s available for acquisition and suits your needs? Interested in learning more about partnering with AFS to purchase a business in the security industry? Get in touch with Rory today by contacting him online or calling him at 800-354-3863.