Happy, healthy and prosperous New Year to all of my readers! It’s hard to believe another year has gone by. With that said, here is a list of the top 10 things that electronic security company owners should consider for 2014:
1. If your contracts are more than one-year old, it’s time to update. Technology continues to change at a very fast pace, requiring contracts to undergo revision. Your contracts are the most important asset you have in your business, as they will protect you from liability and build equity in your business.
2. Your goal for 2014 should be significant recurring monthly revenue (RMR) growth. RMR growth will depend not only on aggressive sales efforts but diversification of your services. There are many different security-related services you can provide, such as intrusion, fire, alarm CCTV and video streaming to name a few. 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.
3. Check your insurance coverage. The best products are available from the Security America Risk Retention Group (SARRG) and Zurich NA, which you can get through the Zurich Alarm Program.
Not all insurance companies are the same and not all premiums are equal. You need to have confidence in how your carrier handles your claims. The last thing you need is aggravation from your carrier’s claims department when you need assistance. 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 it now. You don’t want to continue to invite personal liability for your business activities. I recommend a business corporation, sub chapter S election.
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. If you don’t own the company you hold the license for, make sure you have a contract.
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, perhaps you need a Trust. If that’s the case, you should start transferring stock to that Trust now. If you think you might sell your company, you need to start running your business like a business. In either event, you should be increasing your recurring revenue under contract.
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 encourages you to sell your subscriber accounts, 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, your own IP addresses and that your control panels are remote programmable. If you now own your radio network then your contracts probably have to be updated.
When 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.