Security Analysis & Business Valuation: Everything You Need to Know

When you read the term “security analysis,” you may think of stock valuation. As owner of an alarm company, you may wonder what that term’s doing in a post about business valuation since many alarm companies are privately held and there’s no stock to value!

Actually, this post has nothing to do with stocks. Instead, your company itself is the security in this case. A broker will analyze your company (security) thoroughly in order to come up with your business valuation. Read further to find out what brokers look for in the security analysis and business valuation process.

How Alarm Companies Are Valued

A security analysis of your company will include a look at your equipment, technology and gross sales. The analysis may also take into account such intangibles as the value of your customer and vendor relationships and the quality of your employees.

There are two potential methods of business valuation that your broker may choose to highlight when determining the value of your alarm company: RMR (recurring monthly revenue) or EBITDA (earnings before interest, taxes, depreciation, and amortization). While RMR is more common in the fire and security alarm industries, some brokers may determine that an EBITDA approach is more beneficial and appropriate for your company.

How To Grow Your Company’s Value

In business you have to keep your eyes on the future to stay successful. A business owner who wants to keep their company profitable can’t just sit back and rest on their laurels.

Here’s our advice for growing business success and value:

  • Find New Ways to Generate Revenue

Discovering new ways to generate revenue for your business will play a huge role in your business valuation. Find ways to diversify your business’s income with new revenue streams and it will pay off in the long run.

  • Keep Up With Customers

The health of your relationships with customers is vital to your business. Make sure your company is known for its excellent service, responsiveness, and helpful knowledge.

  • Stay Current With Industry Trends

Part of the process of security analysis and business valuation is looking at technology and whether your company is keeping up with key trends. Be sure you invest in relevant new technologies.

  • Be In Touch With Your Staff

Your employees are essential for delivering services to customers and for presenting a positive image of your company. As owner, earning your staff’s trust means you have a pipeline for customer information. Also you’ll be aware of any issues or challenges that arise so you can handle them before they threaten your company’s growth and worth.

AFS Can Help With Security Analysis and Business Valuation

When you’re looking to sell or borrow, Rory Russell and AFS can help. We have extensive alarm company business expertise to share with you. Our in-depth understanding of the industry can help you through the process of security analysis and business valuation.

If you have questions about your alarm monitoring operation or the financial health of your company, contact Rory Russell at 888-551-0476 or online to get the conversation started today. We wrote the book on selling your security alarm business.