It’s that time of year again, so here’s some thoughts on New Year’s resolutions and predictions for 2012:
1. Contract scrutiny by potential buyers and judges who are charged with enforcing your contracts will be more stringent. Update your contracts. Your contracts are the most important asset you have in your business. They will protect you from liability and build equity in your business. Your goal for 2012 should be significant recurring monthly revenue (RMR) growth. I predict that the multiple that will be paid for state of art contracts will increase this year.
2. RMR growth will depend not only on aggressive sales efforts but also on diversification of your services. Systems integrators do more than install intrusion systems. Subscriber enabled monitoring services, permit subscribers to view data, listen to audio, arm and disarm systems will become more popular and money maker for alarm dealers. This technology should also assist with false alarm problems and issues. Also, remember that it’s important to balance your sales, if possible. That means not limiting yourself to just commercial, or residential; to just leasing or just sales; just intrusion or just fire. Mix it up as long as you have the competence to provide the service. Use the standard alarm contracts to structure your RMR growth. The Fire All in One and the subscriber enabled monitoring service contracts are great contracts to increase your RMR. Be sure you’re using your own monitoring contract and not just one provided by the central station.
3. Check your insurance coverages. Not all insurance companies are the same and not all premiums are equal. You want to be sure your E&O coverage is current and in sufficient amount. Take some time to evaluate your life, health and disability insurance needs and be sure to look for competitive pricing.
4. If you are still conducting business in your own or an assumed name, you need to incorporate, do it now. You don’t want to continue to invite personal liability for your business activities. I recommend a business corporation, sub chapter Selection.
5. Make sure your license to conduct your business is active and up to date. Be certain you know all of the licensing requirements in all of the jurisdictions you do business. It’s not enough to get the license. There are all kinds of Regulations that go along with that license, many of which affect your employees. Be compliant and avoid heavy fines and possible suspension or loss of your license.
6. Review your accounts receivables. In our economic environment, it is essential to stay on top of your receivables. You may need to become more aggressive with your collection efforts and procedures. Don’t carry subscribers who are in default, which means falling out of their regular payment schedule or more than 30 days in arrears.
7. If retirement or sale is remotely in your future, start thinking of an exit strategy. If transition to family members is your plan, then perhaps you need a Trust and should start transferring stock to that Trust, or to your kids now. If you think you might sell out then you need to start running your business like a business. In either event, you should be increasing your recurring revenue under contract. For transactional legal services, which you should seek before you start making deals, make sure you engage a competent alarm attorney - give me a call.
8. Try to pay down debt. Manage your business to operate within its means. That’s sound advice for your personal finances as well. Working harder and making better sales decisions is a better way to raise money. Selling your subscriber accounts and contracts is like selling your soul to the devil. If you belong to a dealer program or group that encourage you to sell your subscriber accounts then get out and pick another dealer program. If you sell your accounts to your dealer program you may as well get a job with benefits, you’ll probably end up with more money, vacation time, health benefits retirement plan and less headache.
9. Make sure you are getting the best deal from your suppliers, and that includes your central station and equipment distributors. Times are tough for them too and they are looking to hold on to good accounts, like yours. Be sure you have your own line into the central station and that your control panels are remote programmable. If you now own your radio network then your contracts probably have to be updated. Give me a call. If you pay your bills you have a right to be demanding. Affordable services are available from reputable suppliers; you don’t have to continue dealing with suppliers that are not responsive to you or your subscribers’ needs and requirements.
10. Get the standard alarm contracts at www.alarmcontracts.com. All of them. They will make you lots of money and protect your business. The longer you wait the longer you put your business at risk and delay in growing your RMR.